Buying a home for the first time can be overwhelming. As a first-time home buyer, there are so many decisions to make along the way, from your buyer’s agent, to your loan officer, to your loan program. But-buying a home doesn’t have to be stressful! Making sure you are prepared will put you miles ahead of other buyers, and help ease your mind during the entire process. Following some simple do’s and don’ts is a great place to start if you are thinking about buying a home for the very first time.

First-Time Home Buyers

DO research your lenders

Your lender is likely going to be with you throughout the entire homebuying process, usually before you’ve even started looking at homes! As a first-time home buyer, you want to find one that you feel comfortable with. Don’t be afraid to get different quotes from multiple different lenders, and decide which one is the best for you.

DO ask questions about all of the loan programs offered

When you’ve chosen your lender, make sure you ask about the pros and cons of each loan program for your situation because Understanding the Mortgage Process as a First Time Home Buyer is very important. Your loan officer will likely give you several options of the programs that they think are a good fit for you, and some of them may be specific programs designed for first-time home buyers. If you don’t fully understand something, they will be more than happy to clarify and help you make the right decision.

DON’T only shop for a rate, without looking at the APR

The interest rate on a loan is the cost of borrowing the principle loan amount. This is always expressed as a percentage. The APR is the Annual Percentage Rate, and this is used to measure the cost of the mortgage. It includes the interest rate and other costs, such as broker fees, discount points, and some closing costs, and is also expressed as a percentage. The APR is likely going to be higher than your interest rate. You will want to take both into consideration to make sure you are getting the best deal.

DO make sure your credit is in good standing

There are loan programs offered to fit most credit scores, but the higher your score, the better deal you are going to get a first time home buyer. Make sure your credit is in good standing before you start the mortgage loan process by making all of your payments on time, keeping your utilization low by not adding to the balances on lines of credit, and not closing or opening any accounts until after the loan process is over.

DO ask about down payment assistance programs

What every first-time homebuyer should know about down payment assistance options. These are programs where money is gifted to you, and you are able to use it towards your down payment. Make sure you check with your loan officer about the stipulations and requirements of each of the programs offered, and see if one might be a good fit for you.

DON’T empty your entire savings

Buying a new house can come with a lot of unexpected expenses. You will want to make sure that your savings account isn’t drained after closing on your loan, and that you’ve left a cushion for a rainy day. As a first-time home buyer, you might not be sure what to expect after closing on a home, so it’s best to leave yourself with some money in the bank just in case.

DO find the right buyer’s agent

Finding the right buyer’s agent is a key component to the home buying process, especially for first-time home buyers. They will be able to help you draw up the contract when you are ready to make an offer, and help you with getting the best deal on the home. Then they are able to act as a go-between during your entire inspection and loan process, and can explain anything that doesn’t make sense. Interview a few different agents to see which one you think is a good fit for you.

DON’T shop for a house before you are pre-approved

You want to make sure that you can afford the homes you are shopping for, and for that reason many agents will require a pre-approval letter before they start to show you homes. It’s a good idea as a first-time home buyer to get this out of the way early on, and will make your first time home buyer loan process easier once you are officially under contract.

DO determine how much you can afford

Your lender can help you with this, and let you know the amount you are pre-qualified for. This way, you are only looking at homes in your price range. First-time home buyers might not know exactly what they want or can afford, and your lender and buyer’s agent can help you with both of these things!

DO get adequate homeowner’s insurance

Homeowner’s insurance will be required by your lender, and if you aren’t sure where to start, ask your buyer’s agent or loan officer for some recommendations. They can connect you with insurance agents that they work with often, and make sure you are getting a good deal on your policy. Sometimes you will save money if you decide to bundle your home and auto policies, so look into the options for that as well with whatever company you decide to go with, so as a first-time home buyer you should always ask many questions.

DO ask questions to make sure you fully understand the home inspection and loan process

If there is anything throughout the home buying process that you don’t fully understand, don’t be afraid to ask questions! Your buyer’s agent and loan officer can help explain anything that you need them to. For first-time home buyers, they are more than used to it, and after all, that’s part of their job!

DON’T buy new things for your home right before closing

When being a first-time home buyer it is exciting and fun while it can be tempting to go out and splurge on new furniture for your new house, you will want to wait until after your loan closes to do so. Adding significant balances to existing lines of credit, or opening new accounts, can delay your loan process significantly, or even cause you to become ineligible for the loan.

DO find the perfect home for you

Your buyer’s agent can help you find the perfect home. Don’t settle for something you aren’t sure you want-a home is probably the biggest purchase you will ever make! You deserve to get exactly what you want, and your agent is there to help you find it.

Being a first-time home buyer can feel a little daunting. You are starting the process for something that you’ve never done before, and it’s a big deal! Finding a good buyer’s agent and loan officer to help guide you through the process and answer your questions can be the difference between a stressful and a smooth home buying experience. Following the tips above will help set you up for success, and put you ahead of the game. And remember, at the end of the day, the goal is to get into the home of your dreams!

Michael Vanella

About Michael Vanella

Mortgage Banker at USA Mortgage Home Loans