The First-Time Homebuyer Guide is an informational resource that seeks to educate potential First-Time Homebuyers about the process needed to purchase a home for the first time. We offer tips, highlight concerns, and generally explain the home buying process to make it easier to understand. We’ll be updating the content over time, so make sure to come back and check it out in the future.
What type of home is best for you? Decide if you’re looking for a house, a condo, or a non-traditional home.
What features are you looking for in your home? Make sure to take into account everything you’re looking for in a home, such as size, number of bathrooms, outdoor space, appliances, and the school district and neighborhood.
How can you finance a home? Typically, homes are bought outright or financed over time with a mortgage.
What can you actually afford to spend? Potential homeowners should consider your down payment, all of your monthly payments, property taxes, and general upkeep costs when deciding what they can afford.
Who can help you with the home buying process? Consult your local REALTOR® and work with them to find the home that is right for you.
Check your credit: Your credit score could impact your ability to get a mortgage. Check your credit with one of the major credit bureaus (Experian, Equifax, and TransUnion), your credit card issuer, or online.
Decide what you can afford: Analyze your financial situation and decide how much you can afford to spend on a down payment and on monthly payments and expenses.
Choose a lender: Find a lender that’s right for you and get pre-approved for a home loan.
Find a REALTOR: Work with a licensed REALTOR® who is familiar with the home buying process. REALTORS® can help you negotiate the best deal in a competitive housing market.
Find a home: Work with a REALTOR® to find a home that you can afford and that offers the features you’re looking for, making it right for you.
Determine your best financing option: Research all possibilities such as standard mortgages, federally-backed home loans, your state’s financial incentives and programs for First-Time Homebuyers. Pay close attention to the comparative mortgage interest rates of your various financing options.
Make an offer: Once you’ve found the right home and the right financing option, make an offer to purchase your new home.
Obtain a home inspection: Make sure to get a home inspection before closing on your new home to ensure that the home is safe and won’t incur any large unexpected expenses.
Close or walk away: If the house passes inspection and you come to an agreement with the seller, it’s time to close and sign all of the necessary paperwork. If the home doesn’t pass inspection or you can’t come to an agreement, move on to the next option.
Move in: Once you’ve found and closed on the home that’s right for you, it’s time to move in. Congratulations on becoming a new home owner!
Post-foreclosure stress: Due to the high number of foreclosures that stemmed from the 2008 housing crisis, many lenders became wary of the housing market.
Tight mortgage credit standards: Since the housing crisis, mortgage credit standards have become more stringent, making it harder to get approved for a home loan.
Student debt burden: Many Americans are paying off student loans, which can make it much harder to afford a home.
Declining single-family housing affordability: Single-family homes are becoming more expensive, making them more difficult to afford for many families.
Insufficient single-family housing supply: It’s also becoming harder to find a single-family home that’s for sale in most states.
Mortgage Interest Tax Deduction: The federal mortgage interest tax deduction allows homeowners to reduce their taxable income by the amount of interest paid on their home loan.
First-Time Home Buyer Savings Account: Some states offer tax-preferred savings accounts to make it easier and more affordable for First-Time Homebuyers to buy their first home. While generally similar in structure, each state has a different set of rules.
Check your state’s Department of Housing & Urban Development for First-Time Homebuyer Programs and Incentives.