Did you know that 72 percent of first-time homebuyers aim to purchase a house in 2022? At the same time, less than 20 percent of those aspiring buyers have actually been pre-approved for a mortgage.
While getting daily notifications on Zillow is fun, you may want to actually start thinking about how to buy a house.
A home is the biggest purchase you may make in your life. We’ve pulled together a quick overview of the home buying process and how to ultimately purchase the home of your dreams.
Advantages For First-Time Homebuyers
As a first-time homebuyer, there are a number of programs you can take advantage of. Depending on where you intend to purchase your home, state programs offer minimum down payments.
For example in Mississippi, the first-time homebuyer program offers a 3.5 percent down payment compared to the traditional 20 percent.
Get Your Financial House In Order
In addition to the upfront cost of a home, you'll also need to prepare for closing costs, mortgage insurance, and maintenance costs. Unlike the predictable costs of renting, you have to be ready for surprise expenses that may upend your monthly budget.
Here are some initial steps to take:
- Build up your savings account with at least three to six months of living expenses.
- Check your credit score. You can check your credit for free once a year with credit reporting agencies like Equifax, Experian, or TransUnion. Your credit card company might offer free access to your score as well.
- Do your research and figure out what you can afford.
Experts recommend not spending more than 25 percent of your take-home pay on your full monthly housing payment.
How To Buy a House You Can Afford
2021 has been a record-setting year for home prices. While real estate is a good investment, it’s also important to be careful about buying near the top of the market. One suggestion is to find the best neighborhood you can afford and then look for the cheapest house for sale.
Figure out what type of mortgage you are going to apply for by researching your options. Make sure you get pre-approved for a loan before seriously starting your search.
Making An Offer On Your First House
Before you start house-shopping, it’s a good idea to hire a real estate agent. You usually don’t have to pay for an agent, they will get paid by the seller if you purchase a home.
Try to find someone who is familiar with the neighborhood you are interested in and isn’t way over-booked with other clients. An agent is a great partner as you make an offer, hire inspectors, and sign a purchase agreement.
If you are thinking about how to buy a house, today is a great day to get started. There are also so many amazing resources right at your fingertips.
Check out our blog for the latest tips and ideas to help you buy a place to call home.