Like most major milestones, buying your first home can feel a bit daunting. No matter how well prepared you are, there’s always going to be something you feel unsure about or wish you’d approached differently in retrospect.
While we can’t promise that the process won’t involve at least some level of anxiety, just imagine how great it will feel when you’re settled into—and loving—your new space. And to take a bit of the pressure down, here are some must-do steps every first-time buyer should know about.
Make Sure It’s a Good Fit
Is this your starter home, or after years of renting do you see it more as a “forever” move? Does the layout meet your needs for both personal privacy and communal areas? And, if you’re planning to expand your family sooner versus later, will the home be big enough? Ask questions like these now to avoid missteps down the road.
Research potential neighborhoods thoroughly, including property values, property taxes, recreational options and overall safety. If you work away from home, do a test run of your new commute during rush hour. If, after this you still envision yourself in the new environment, consider it a positive sign.
Make Sure the Timing is Right
Spend time on real estate websites like Zillow to get an idea of the prices of comparable properties in each neighborhood you’re considering. It’s also a good idea to bring a real estate agent into the process, since they’ll know about current market conditions and can offer some guidance on financing. They’ll also handle all the paperwork and negotiations when you’re ready to make an offer.
Walk Through with Your Eyes, Ears and Nose
When walking through a potential home, remember to open all your senses. Listen for noise, pay attention to any odors, and look at the overall condition of the home inside and out. Ask about the type and age of the electrical and plumbing systems and the roof. That said, you should also have some money put aside for any immediate home repairs – or negotiate a better deal with the seller.
Here’s a surprising statistic: According to a survey of 1,900 home buyers commissioned by the real estate company Redfin, almost two-thirds (63%) of home buyers in 2020 made at least one offer on a property they only “visited” online. Our advice? While it’s possible – or under certain circumstances even essential – to buy a home sight unseen, we recommend using 3D home tours to narrow the list of properties you intend to visit.
Research Your Mortgage Options
Meet with loan officers at a few places to compare interest rates and closing cost fees. Look for first-time homebuyer programs in your area that may offer lower down payment and closing. Unless you’re paying cash for your place, you’ll also need to determine which type of mortgage best fits your specific needs and financial profile.
- Conventional mortgages are the most common type of loan – and what most people think of when they hear the word “mortgage.” Remember to check whether you qualify for a lower, first-time buyer rate.
- FHA loans are insured by the Federal Housing Administration and allow down payments as low as 3.5%.
- USDA loans are guaranteed by the U.S. Department of Agriculture. They are for homes located in eligible rural areas and usually require no down payment.
- VA loans are guaranteed by the Department of Veterans Affairs. They are for current military service members and veterans and usually require no down payment.
You also have options when it comes to the mortgage term. Home buyers typically opt for a 30-year fixed-rate mortgage, which is paid off in 30 years and has a fixed interest rate. A 15-year loan typically has a lower interest rate than a 30-year mortgage, but the monthly payments will be bigger.
Please note that this should not be considered financial advice; every person’s situation, and/or different states’ laws and regulations, are different. Be sure to speak to your own financial advisor for guidance.
In almost every case, your lender will require you to buy homeowners insurance before closing the deal. Most experts recommend buying enough insurance to cover the cost of rebuilding the home.
Get Pre-Approved for a Mortgage
Having a preapproval letter lets the seller and real estate agent know you’re a serious buyer which can give you an edge over others who haven’t taken this step. It also helps you focus your search on places that fall within your budget.
Hire a Professional Home Inspector
Although not all states and jurisdictions require a professional inspection, it is a good idea to get one since it can save you from inadvertently buying a “money pit.”
Just be aware that most standard inspections don’t test for things like radon, mold or pests. Therefore, it’s important to know exactly what’s included in the inspection and to ask your agent what other inspections you might need. If possible, plan to be there while it’s happening so you can ask questions.
Factor in Closing Costs
You’ll need to set aside about 2-5% of your budget for closing costs which include things like appraisal fees, origination fees and title searches. In a buyer’s market, you can often ask the seller to pay a part of this.
Make Sure You’ve Budgeted for Moving, Too
Whether you’re moving across town or to another part of the country, you’ll need to factor in the time and costs involved in moving to your new space. Fortunately, that’s something we’re very familiar with at Mayflower. One thing we suggest doing earlier versus later is getting a quote from one or more professional movers. At Mayflower, there’s no obligation to receive a quote from one of our agents and it’s definitely worth checking out.
We hope your journey to Finding Home is smooth and successful. And remember, no matter where you happen to be in the moving process, you can count on Mayflower to be with you Every Step of the Way®.
Moving or about to move? Get a no-obligation quote from Mayflower.
Want more tips and advice? Check out our state and city guides, decorating ideas and a wealth of other helpful, time-saving information.
Oh, and did you know Mayflower has a channel on Spotify? Move and groove to tunes that get you to your new place — and settled in — in style.
