3 Things First-Time Home Buyers Need to Know

Buying your first home is an exciting milestone but can also feel overwhelming. Decisions around budgets, loans, and neighborhoods make it easy to get caught up in the process. To help you feel confident, here are three key things every first-time home buyer needs to know.

1. Understand your budget—beyond the down payment

When buying a home, many first-time buyers focus heavily on the down payment. While that’s a crucial component, your budget must account for much more. Consider these factors:

• Closing Costs: Closing costs typically range from 2-5% of the home’s purchase price and include expenses like inspections, appraisals, and title insurance.
• Property Taxes: Research your area’s annual property tax rates—they can vary widely and impact your monthly costs significantly.
• Maintenance Costs: Owning a home means taking care of unexpected repairs and routine upkeep. A good rule of thumb is to set aside 1-3% of your home’s price annually for maintenance.

Pro Tip: Use a mortgage calculator to get a realistic sense of your monthly payments, and don’t forget to factor in these additional costs.

2. Get pre-approved (not just pre-qualified)

House hunting is far easier when you know how much you can afford—and sellers prefer buyers who have proof they’re financially ready to purchase. That’s where securing pre-approval for a mortgage comes in.

Getting pre-qualified gives you an estimate of how much you can borrow; pre-approval is more concrete. It involves submitting financial documents (bank statements, credit reports, proof of income, etc.) to your lender so they can determine how much you’re eligible to borrow.

A pre-approval letter gives you:

• A Flexible Budget: You’ll know exactly what you can afford, which helps you stay grounded when shopping for homes.
• An Edge in a Competitive Market: Sellers are more likely to choose a pre-approved buyer because it shows you’re serious about making an offer.

3. Location matters more than you think

When purchasing your first home, it’s tempting to focus entirely on the house itself—but don’t underestimate the importance of location. You can renovate a kitchen, but you can’t change your neighborhood.

Keep these factors in mind when evaluating potential locations:

• Commute Time: How close is the home to your workplace or public transit options?
• School District: Even if you don’t have children, homes in strong school districts tend to hold their value better over time.
• Amenities: Are grocery stores, parks, and recreational facilities nearby?
• Future Growth: Check with local government offices to see if any major developments, like shopping centers or infrastructure, are planned—it can impact the value of your home.

Pro Tip: Visit a neighborhood at different times of day (and week) to get a feel for traffic, noise, and overall vibe.

Final Thoughts

Buying your first home is a big decision, but it doesn’t have to be stressful with the proper preparation. By understanding your budget, securing pre-approval, and prioritizing location, you’re setting yourself up for success.

Let me help guide you; knowing this information is vital in house-hunting. Remember, this is an investment in your future—take the time to do it right!