Buying a home can be nerve wracking, especially if you’re a first-time home buyer. Not only is it probably the biggest purchase of your life but the process is complicated and fraught with unfamiliar lingo and surprise expenses. You need an experienced real estate agent on your side to walk you through every step of the process. We represent your best interests and, best of all, our services are FREE to buyers.

To make the first-time home buying journey a little less stressful, consider these 15 tips to help you navigate the process more smoothly and save money.

Check your credit

When you’re taking out a mortgage loan, your credit will be one of the key factors in whether you’re approved. Your credit score will help determine your interest rate and possibly the loan terms. So check your credit now. Dispute any errors that could be dragging down your credit score and look for opportunities to improve your credit, such as making a dent in any outstanding debts.

It’s also important that you stop new credits. So now isn’t the time to get a new car, buy furniture on store credit or open a new credit card. Avoid opening new credit accounts to keep your score from dipping.

Start saving for a down payment now

It’s common to put 20% down but many lenders now permit much less. In fact first-time home buyer programs allow as little as 3% down. But putting down less than 20% may mean higher costs and paying for private mortgage insurance, and even a small down payment can still be hefty. For example, a 5% down payment on a $200,000 home is $10,000. So how can you save for your down payment? Set aside tax refunds and work bonuses, skip eating out once a week and put that money into special account and cut unnecessary spending (daily coffee drive-through, pack your lunch instead of get takeout, find free events around town instead of paid event). Find free (or very low cost) things to do around Tampa Bay here

Learn about down payment programs

Struggling to come up with enough money for a down payment? First-time home buyer programs are plentiful, including federal mortgage programs. There are also county programs for first-time home buyers. And the state of Florida has a program for first responders, teachers, medical personnel called the Hometown Heroes program that will assist with a down payment. And to note: you are considered a first-time buyer if you haven’t owned AND occupied your primary residence for the last three years.

Determine your budget

Don’t have caviar dreams with a McDonalds budget. That will just increase your frustration. Before you start looking for your dream home, you need to know what’s actually within your price range. We can put you in touch with one of our approved vendor partners to learn how much you can safely afford to spend.

Budget for closing costs

In addition to saving for a down payment, you’ll need to budget for closing costs, the money required to close your mortgage. Closing costs generally run between 2% and 5% of your loan amount. You can shop around and compare prices for certain closing expenses, such as homeowners insurance, home inspections and title searches. You can also ask the seller to pay for a portion of your closing costs.

Research mortgage options & rates

Is a 30-year, fixed rate mortgage a given, or is another loan type right for you? If you can afford larger monthly payments, you can get a lower interest rate with a 20-year or 15-year fixed loan? Or do you prefer an adjustable-rate mortgage, which is riskier but guarantees a low interest rate for the first few years of your mortgage. You’ll also want to talk with several lenders to compare both rates and fees. Lenders will tell you which programs you may qualify for, if paying for points makes sense (prepaying interest upfront to secure a lower interest rate) and you can even start the pre-approval process.

Get preapproved

Speaking to a mortgage broker will also allow you to prequalified, which simply gives you an estimate of how much a lender may be willing to lend based on your income and debts. As you get closer to buying, it’s smart to get a preapproval, where the lender thoroughly examines your finances and confirms in writing how much it’s willing to lend you and at what terms. Having a preapproval letter in hand makes you look much more serious to a seller and can give you an upper hand over buyers who haven’t taken this step.

Won’t you be my neighbor

Finding the right neighborhood is just as important as locating the right house. Research the schools, even if you don’t have kids, as that affects a home’s resale value. How close is the nearest hospital, pharmacy, grocery store, library? What amenities does the neighborhood offer and will you use Consider what type of property to buy

You may assume you’ll buy a single-family home, and that could be ideal if you want a large lot or a lot of room. But if you’re willing to sacrifice space for less maintenance and extra amenities, and you don’t mind paying a homeowners association fee, a condo or townhome could be a better fit. Check out the neighborhood amenities and decide how much you would use them. Is it worth the monthly cost of the HOA if you never go to the gym or community pool? We recommend you drive through the neighborhood on various days and at different times to check out traffic, noise and activity levels. It’s also a good idea to practice your work commute from the neighborhood to make sure the drive time is within your limits.

Tampa Bay area community guides

What type of house is ideal?

You may assume you’ll buy a single-family home. How much lot size do you want? Are you comfortable with an HOA or CDD. If you’re willing to sacrifice space for less maintenance and extra amenities, a condo or townhome could be a better fit.

Set realistic expectations

Now we’re getting down to the details. How many bedrooms and bathrooms? Are you willing to replace flooring or update bathrooms and the kitchen? Or do you want move-in ready? Make your must-have list and a separate wish list. Also look past your current needs. You want a home you can grow into. Consider your future needs and wants and whether this home will suit them. At the same time, don’t nitpick. You can change the wall color, the light fixtures, the flooring and landscaping. You can’t change the layout or location so those could be dealbreakers in your search. 

Be prepared to compromise

It’s rare to find a house that’s perfect in every way. So look back on your must-have list vs you wish list. What are you willing to compromise on? Perhaps no fireplace is a deal breaker, but an outdated guest bathroom will be tolerable until you can renovate it.

Make a strong offer, be willing to negotiate

As your real estate agent, we will help you with this. But consider how much under or over the asking price you’re willing to pay to obtain your dream home. If there are multiple bids, think about tactics to win over the seller, such as a personalized letter. Also be willing to negotiate. Again this is something we will help you with. Are there any major repairs you can get the seller to cover? Is there a flooring or paint allowance if those are things that you will need to immediately do? Is the seller willing to pay for any of the closing costs? Our agents are expert negotiators so we’ll help you get the best offer to the sellers.

Inspect it

Once your offer is accepted, you’ll pay for a home inspection to examine the property’s condition inside and out. Make sure the inspector can access every part of the home, such as the roof and any crawl spaces. And know what they are and aren’t looking for. Attend the inspection and pay close attention. Don’t be afraid to ask your inspector to take a closer look at something and ask questions. Your agent can also be present for the inspection and will know what questions to ask.

Buy homeowners insurance

Before you close on your new house, your lender will require you to buy homeowners insurance. Shop around and compare rates to find the best price. Look closely at what’s covered in the policies. This is especially important if you live in a flood-prone area. Flood damage isn’t covered by typical homeowners insurance so you may need a separate flood rider. Generally a less expensive policy will save money up front but lead to more out-of-pocket expenses if you file a claim.

Set aside money for after move-in

You found the perfect home and are getting close to closing. Make sure you set aside money for moving and immediate updates. This includes furnishings, appliances, flooring and paint. All of this doesn’t need to be done immediately but we can share from experience that it is easier to paint and replace flooring BEFORE you move all your stuff in.

We hope these tips are helpful as you prepare to buy your first home. Please reach out with questions. We want to share our knowledge and experience so you find exactly what you want.