First Steps

Thinking About Buying a Home for the First Time? Here’s Where to Start

Buying your first home is exciting, but following the different steps to buying a home can leave you a little overwhelmed. From finding the right property to getting approved for a first time buyer mortgage, it’s a lot to take on.

Having a timeline in place and a guide to follow may make buying your first home a breeze.

Decide What You Can Afford

One of the first — and most important — steps to buying a home is figuring out what you can spend. You don’t want to end up with a bigger mortgage than your budget can carry.

“It’s very important to have a firm buying budget in place before approaching a lender,” says Lukasz Kukwa, a real estate agent with Coldwell Banker Residential Brokerage in Westfield, New Jersey.

As you start your home search, “focus on what you want your monthly payment to be, which should include property taxes, insurance, and any additional loan fees,” Kukwa says.

Don’t forget to factor in potentially higher utility costs, as well as what you might pay for homeowner’s association fees, repairs, and maintenance.

Check Your Credit & Get Pre-Approved

Getting pre-approved for a mortgage, meaning a lender has given you conditional approval for a loan, can work in your favor when it’s time to actually make an offer on a home. But, before you apply for a first time buyer mortgage, be sure to have a look at your credit score.

This does two things: it can help you figure out what type of loans you might qualify for, and it also gives you an idea of what kind of interest rate you may be able to get.

There’s also another great benefit to getting pre-approved. “It clearly outlines what a buyer can afford, based on their debt-to-income ratio,” Kukwa says. “It also allows them and their agent to focus only homes that they’ve been qualified for.”

Find the Right Agent

Speaking of your agent, if you don’t have one yet, now’s the time to get one. Your agent can guide you through the many steps to buying a home and answer any questions you might have.

They can also help you find properties that fit your budget and steer you through making an offer, as well as other tasks associated with buying your first home, like scheduling your home and pest inspections and negotiating with the seller over repairs that need to be made.

Find Your Mortgage Match

The final piece of the puzzle is choosing a mortgage lender

“Buyers should obtain information from several lenders, as different lenders might quote different prices and fees,” Kukwa says. When applying for a first time buyer mortgage, consider all the options carefully before making a final decision.

Ready to apply for a home loan? Reach out to a Finance of America Mortgage loan advisor to discuss mortgage options, or take a look at this home buying checklist to learn more about the home buying process.

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