Buying your first home is exciting — but it can also be stressful. Between setting a budget, navigating mortgages, and finding the perfect neighborhood, there’s a lot to keep in mind. The good news is that with a little preparation, you can avoid common mistakes. To help you get started, here are six smart tips that every first-time home buyer should know.
1. Know Your Budget
Before you start house hunting, figure out what you can realistically afford. Look beyond the purchase price and factor in the closing costs, property taxes, insurance, maintenance and potential upgrades.
A good way to start is by looking at your monthly income and expenses to see what kind of payment feels comfortable. Many experts suggest keeping your housing costs — mortgage, taxes and insurance combined — at or below a set percentage of income. This helps ensure you’ll have room for everyday expenses, savings and unexpected costs that may arise in the future.
2. Get Pre-Approved for a Mortgage
Once you know your budget, the next step is getting pre-approved. This shows you what you can afford and signals to sellers that you’re serious.
Pre-approval means a lender looks at your income, credit and financial history to estimate how much they’re willing to lend you. This helps you focus on homes that truly fit your price range and shows sellers that you’re ready to move forward.
It can also give you a competitive edge. In a busy housing market, sellers often favor pre-approved buyers because financing is already in motion. Keep in mind, pre-approval is not a loan guarantee — but it does put you a step ahead of others when it’s time to make an offer.
3. Improve Your Credit Score
Your credit score plays a major role in your mortgage options. A higher score can help you qualify for better interest rates and more flexible loan terms, saving you money in the long run.
If your score needs improvement, it’s worth taking steps early on. Start by paying bills on time, since payment history has a huge impact on your score. Work on reducing existing debt and keeping credit card balances below their limits. It’s also a good idea to avoid opening any new accounts. Multiple inquiries can cause a temporary dip.
Improving your score takes time, but consistent effort can make a big difference.
4. Plan for All Costs of Homeownership
Owning a house means more than paying a mortgage. Every month, you’ll face expenses like utilities, property taxes, insurance and HOA fees. On top of that, there’s also regular maintenance — from lawn care, seasonal servicing of heating and cooling systems — that keeps your home in shape but could significantly add to your budget.
Unexpected repairs can also catch you off guard. A leaking roof, broken water heater, or storm damage can cost you thousands to repair. Setting aside money a little each month in an emergency fund can help you handle unexpected repairs without disrupting your budget.
5. Don’t Skip the Home Inspection
Even if you’re eager to move quickly, a professional home inspection is crucial. It can uncover hidden issues — from plumbing leaks to roof damage — that could cost thousands to fix later. Considering that homeowners already spend an average of $10,867 a year on maintenance and upkeep, finding problems before you buy can help you avoid even bigger repairs down the road. An inspection not only offers peace of mind, but also gives you leverage if repairs are needed before closing.
6. Think Long-Term
Finally, remember that your home is more than just a place to live — it’s an investment in your future. Consider whether this place will continue to meet your needs as life changes. A starter home may work today, but will it still work for all your needs in the future? By thinking ahead, you can choose a home that fits your life today and grows with you in the years to come. Ready to feel confident in your new home? Start exploring home insurance options today and get a personalized quote!