First-Time Home Buyer’s Guide: What You Need to Know Before You Start Your Dream Home

First-Time Home Buyer’s Guide: What You Need to Know Before You Start Shopping

Key Takeaways for First-Time Home Buyers:

• Know Your Finances: Check your credit score, set a realistic budget, and get preapproved for a mortgage.
• Down Payment & Closing Costs: Save for a down payment (3% to 20%) and plan for 2% to 5% in closing costs​
• Use First-Time Buyer Programs: Explore FHA, VA, and local programs for better loan terms​
• Hire a Real Estate Agent: Choose a knowledgeable agent to guide you through the process—Cr8tive Realty can help!
• Home Inspection is Essential: Get a professional inspection to avoid costly surprises​(
• Plan for Long-Term Costs: Be prepared for taxes, insurance, maintenance, and potential HOA fees
• Make a Strong Offer: Get pre approved and make a competitive, flexible offer to stand out​

1. Get Real About Your Finances

First things first: know your numbers! Before you even start dreaming of houses, take a hard look at your financial situation. Start by checking your credit score. A good credit score can score you lower interest rates, potentially saving you thousands over the life of your loan. For instance, borrowers with credit scores of 760 or higher often receive better mortgage rates than those with lower scores​.

Use an affordability calculator to figure out how much home you can realistically afford. A general rule? Your mortgage payment (including property taxes and insurance) should be no more than 28% of your monthly income​ and before you even think of making an offer, get preapproved for a mortgage. This not only helps you understand your budget but makes you a more attractive buyer to sellers!

2. Save, Save, Save!

Yes, you’ll need a down payment—typically around 20%. But there are first-time buyer programs that can get you in with as little as 3% down​. While that sounds tempting, remember that a smaller down payment often means higher monthly payments. In addition to the down payment, don’t forget about closing costs, which can range from 2% to 5% of the home’s price. Factor these into your budget before you start shopping.

3. Know Your Options for Help

If 20% down sounds like a mountain, don’t panic! First-time homebuyer programs can help lower the hurdle. FHA loans, VA loans for veterans, and state-specific assistance programs offer down payment assistance, closing cost help, or even lower interest rates​.  Cr8tive Realty can guide you through these programs and help you find the one that’s right for you.

4. Work With the Right Real Estate Agent

An experienced real estate agent makes all the difference. They’ll help you navigate the local market, find homes within your budget, and negotiate the best deal for you. A good agent knows what’s happening in the market and can save you time, stress, and money. At Cr8tive Realty, we have experts who specialize in first-time homebuyers, and we’re ready to make the process smooth and successful.

5. Don’t Skip the Home Inspection

You’ve found “the one”—but before you sign on the dotted line, you need to know what you’re buying. A home inspection is crucial. It can reveal hidden issues, like faulty wiring or foundation problems, that could cost you thousands to fix later. Even if the house looks perfect, an inspection ensures there are no expensive surprises down the road​.

6. Plan for the Long Haul

Owning a home comes with costs beyond the mortgage. Property taxes, homeowners insurance, utilities, and regular maintenance all add up. Experts recommend setting aside 1% to 3% of your home’s purchase price each year for repairs and upkeep​. For example, a $300,000 home might require up to $9,000 annually in maintenance.

Plus, if you’re buying in a neighborhood with a homeowners association (HOA), be sure to factor in those fees, which can vary widely depending on the amenities provided.

7. Make a Winning Offer

When you're ready to make an offer, work with your real estate agent to ensure it’s competitive. In today’s hot markets, bidding wars can break out, and a well-prepared offer can be the key to locking down your dream home. Pre Approval, flexibility with closing dates, and a strong earnest money deposit show sellers you’re serious​(

Ready to Take the Leap?

Buying your first home is an exciting journey, and it’s one you shouldn’t go through alone. At Cr8tive Realty, we specialize in helping first-time buyers like you navigate the process with confidence. Whether you’re just starting to save or ready to make an offer, we’re here to help you every step of the way. Contact Cr8tive Realty today to take the first step toward your dream home!

Source:
SoFi First-Time Home Buyer Guide​(SoFi).
Redfin First-Time Homebuyer Guide​(Redfin).