- 1.) Don’t Stress About Your Down Payment- There is a common misconception that you need to be able to put 20% down when buying a house. In reality, most first time homebuyers put between 3.5% and 5% down. With a higher down payment, monthly mortgage payments are affected only slightly, so a smaller down payment isn’t a problem.
- 2.) Make a Wants/Needs List- Determine the difference between a want and a need and make a list. Limit needs as much as you can and enter with an open mind. For example:
Needs: Attached Garage, Fenced Yard, City Sewer/Water, 140-220k
Wants: Stainless Steel Appliances, Community Pool, Hardwood Floors
- 3.) Talk to a Professional Early- Talking to a lender and real estate professional early can define a great path for the transaction to follow. By reaching out several months before you intend to buy, a lender can help you maximize your credit for preapproval and a Realtor can begin to get a sense of your needs, which will eventually smooth out the search process.
- 4.) Save for Closing Costs- Save up some money so that you don’t have to ask the seller to pay a portion of your closing costs. Closing costs are usually about $3,000 and being able to pay these yourself makes your offer much more appealing in this competitive market.
- 5.) Don’t Judge a Book by its Cover- There’s no getting around it… many starter homes come off as tacky. It is important to be able to look past bright paint, tattered carpets, or poorly decorated homes to see the actual features of the home. Cosmetic things like these are easy to fix and aren’t too pricey. The things that actually matter like home layout, neighborhood, and structural integrity are what matter.