Proven tips that all first time homebuyers should know.

5 Tips for First Time Homebuyers!

Thinking about buying your first home? Congratulations! This is a very exciting time! But it can also be kind of confusing, especially since you’ve never done it before. But don’t worry! My 5 tips for first time homebuyers will help you get started and assist you throughout this process! 

Watch my video below to learn more about my 5 tips for first time homebuyers!

Tip 1: Maintain Your Credit Score

Now is not really the time to be buying a new car or opening a new line of credit because little changes in your credit score can have a big impact when it comes to the type of loan you can get. Your credit score will affect your…

  • Interest Rates: A high credit score often leads to lower interest rates on your mortgage. This means you’ll pay less in interest over the life of the loan, saving you a significant amount of money.
  • Loan Approval: Lenders use credit scores to assess your creditworthiness and determine whether to approve your mortgage application. A high credit score could increase your chances of being approved and make it easier to get financing for your first home.
  • Loan Options: When buying a house with a loan, you will be faced with different options which will all have their pros and cons. It is important that you have as many loan options as possible and having a good credit score will provide you with a broad range of loan options and terms, which will help you find a loan that will align with your financial goals.
  • Lower Monthly Payments: A lower interest rate resulting from a good credit score can lead to a lower monthly mortgage payment. This can free up funds for other expenses or savings. 
  • Lower Loan Down Payments: Some lenders offer more favorable terms and lower down payment requirements to borrowers with higher credit scores. This can make it easier for you, as a first-time homebuyer, to afford a home.
A mortgage being approved after using my 5 tips for first time homebuyers

As you can see, having a high credit score can help save you a lot of money when buying a house. My best advice to you is to maintain your credit score throughout the whole home buying process and wait on big purchases until after you have closed on your new home!

Tip 2: Find Out How much you can afford

Imagine this, you decide you want to buy your first home. You are so excited and the first thing you want to do is start looking! Then, after months of searching you finally find the perfect home. It has the pool you’ve always wanted, enough room for the whole family, and it is everything you have ever dreamed of! Then you find out, the home is out of your price range. Absolutely heartbreaking!!

Unfortunately, this happens to a lot of first time homebuyers, but I’m here to help you avoid this mistake. Before you begin looking at homes, you should try to figure out an estimate of how much you can afford. 

Some first time homebuyers may have a hard time figuring this out. As a rule of thumb, your monthly housing costs should be around 25% of your monthly income. So, if you have a household income of around $70,000 after taxes, then your monthly payments on a home should be around $1,450 a month, if you are following this rule. 

Your loan may be approved for more than this amount, but finding out how much you can afford will help you avoid overspending on a house or looking into homes that you can’t afford. 

Tip 3: Get pre-approved before you begin house hunting

If you are planning on financing your first home with a loan, getting pre-approved is another great way of determining the price range you should be shopping in. 

Some sellers won’t let you view their home until you have been pre-approved because it shows them that you are a serious and qualified buyer. This could give you the upper hand in competitive markets where sellers may receive multiple offers. Sellers are more likely to take you seriously if you’ve already been pre-approved. 

Finally, once you find a home you want to buy, having pre-approval can expedite the mortgage application process. Since you’ve already provided the necessary financial documentation, much of the groundwork for the loan application is already done which means you may be able to close on your home quicker. 

Homes a buyer will look at after reading my 5 tips for first time home buyers

Tip 4: Don't Forget About Your Closing Costs

Closing costs are the fees and expenses associated with finalizing the real estate transaction and they can significantly impact the overall financial picture of purchasing a home.

Good news! When purchasing a home in Florida, the seller typically covers a majority of the closing costs. However, you will still be obligated to pay for certain things at closing, especially if you plan on making a purchase with a loan. Depending on your loan amount, your closing costs will typically be around 2-3% of the sales price of the home. Your closing costs will cover things like your inspection, home appraisal, lenders fees, and other expenses

First-time homebuyers need to be financially prepared for these additional expenses on top of the down payment. Being aware of these costs in advance helps prevent financial strain and ensures you have the necessary funds to complete the purchase. being mindful of closing costs is crucial for first-time homebuyers to make a well-informed and financially responsible decision. It’s an essential part of the home buying process that should not be overlooked, so you can avoid surprises.  

Tip 5: Work with a Realtor!

The final thing on my list of 5 tips for first time homebuyers is to work with a realtor! First-time homebuyers can benefit significantly from working with a realtor for many reasons: 

  • Expertise and Guidance: Realtors are experienced professionals who understand the complexities of the real estate market. We can help guide you through the entire home buying process, from searching for homes to negotiating offers and closing deals.
  • Market Knowledge & Local Expertise: Realtors have access to up-to-date market information, including recent sales data, pricing trends, and neighborhood insights. This knowledge can help you determine the fair market value of a property and make competitive offers that are more likely to be accepted. 
  • Access to Listings: Realtors have access to the Multiple Listing Service (MLS), which gives you access to a wider range of homes that fit your criteria. We also have a network of other real estate professionals that we can use to help find off-market properties. 
  • Problem Solving: Unexpected challenges can arise during the home buying process, such as inspection issues. A skilled realtor can help you navigate these challenges and find solutions to keep the transaction on track.
  • Confidence and Peace of Mind: Working with a realtor gives you confidence that you’re making well-informed decisions and following a structured process. Their guidance provides peace of mind, especially in a complex and competitive real estate market.

Interested in Buying your First home in Orlando?

You’re in the right place! I love working with first time homebuyers and I am equipped with all of the resources to make your transaction run as smoothly as possible. My guidance can help simplify the home buying process, help you navigate challenges, and lead to a successful and satisfying home purchase. When working together, I strive to provide you with peace of mind and confidence in knowing that one of the biggest purchases of your life is in good hands. 

Madeleine Karaffa, a first time home buying expert and author of 5 tips for first time home buyers

Let’s embark on your home buying journey together!

If you’re ready to get started, get in touch with me by calling or texting (407) 729-0178 or by clicking the button below! I’m here to support you every step of the way.

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