When purchasing your first home, I can basically guarantee that you will experience more "wow, literally no one prepared me for this" moments than you could possibly imagine. I know I did.
Whether you're a soon-to-be first-time homeowner, beginning to think about making the plunge, or you're simply addicted to scrolling through real estate listings and daydreaming about your future homeowner life, I made this list of helpful tips and advice for you. For what it's worth, the home-buying experience can vary pretty wildly depending on a variety of factors — the state of the housing market, type of sale, even time of year — so let me just say that your experience might differ from my experience in every way! Regardless, I want your first home-buying experience to be more enjoyable than mine was, so this is basically my way of channeling all of my stress and frustration into something that makes all that chaos *worth it*... Right?!
I stumbled upon the listing for my current house on an ~actual~ whim and went into the process with only a pre-qualification, so...this is a classic instance of do as I say, not as I do. In hindsight, I majorly lucked out.
Long story short: a pre-qualification is essentially like that friend that offers to be your reference for a job you're applying for, and you coach them through every single thing they should and should not say on your behalf. You're giving a potential lender the SparkNotes version of your financial situation, and they're telling you how much money you'd potentially be approved to borrow. Definitely better than nothing, but not necessarily 100% convincing for the seller.
A pre-approval, however, will involve a very in-depth application, including a hard credit check — essentially the beginning of your lengthy loan process — and for your efforts, you'll be rewarded with definitive approval (up to a specific amount) from your future lender.
3.Throughout your home-buying process, you'll write checks for a LOT more than just your down payment, so factor these additional costs into your budgeting process well in advance.
4.Be realistic with your home-hunting — if a listing looks too good to be true, it probably is.
5.Don't rush the initial visit to your future home.
6.Consider the pros and cons of large vs. small lenders.
7.When applying for a loan, don't include any info that you can't back up.
It won't help you...actually, it will hurt you...and I know because it happened to me. 😒
When I first applied for my loan, I was a W-2 employee with some every-now-and-then income on the side from freelance work. I included my estimated self-employment income with my yearly salary, and that's when shit totally hit the fan. My self-employment income came in slightly under what I had estimated, and it nearly cost me my loan (and house). Luckily, we were able to resolve this issue...but let me assure you, it was incredibly not fun.
Take it from me: don't over-inflate anything in hopes that you'll get a lower interest rate or seem like a "more attractive" buyer. And if you derive your income entirely from freelance work, it's incredibly important to understand the realities of applying for a mortgage as someone who is self-employed.
8.Even if you're getting the "deal of the century" through the lender that granted you pre-qualification or pre-approval, you'd be wise to shop around.
9.Don't purchase anything major (or open any new accounts) until after closing.
10.There's a 99% chance that the purchase process will take longer than you think, so make sure you're prepared for worst-case scenarios.
11.Get as much information as you can from the seller ahead of time.
12.Apply the same diligence to choosing your home inspector as you did to choosing your real estate agent and lender.
13.If you can swing it, plan on being present for the inspection and any other in-person events that are scheduled prior to closing.
So long as you're not moving cross-country or anywhere outside a reasonable driving distance, you should absolutely plan on being present for any major in-person events, like inspections, or even property surveys, should they need to be updated prior to closing. (Since I never met my surveyor on-site, I literally paid $600 for a "new" property survey that was...fully the outdated one with a new date on it. Dead serious.)
Not only is it a great opportunity to actually meet the people you're paying to perform various tasks for you, but it's the perfect chance to become better acquainted with your future home and voice any of your burning questions to a legitimate professional that can/will help you. Clueless about the big scary tank that's somehow providing your home with heat and hot water, or maybe you want some answers about how well (or...not well) your future home is insulated? Ask away! You might not get an answer to every single one of your questions, but it's certainly a great start.
14.Depending on where you live and the specifics of your sale, you might consider working with a real estate attorney.
15.Block out some "paperwork time" and get organized, since filling out documents of all kinds will basically become a full-time job.
So...be prepared to spend an unfathomable amount of time in front of your computer, proving basically every single detail about yourself and your finances!
If you don't have the flexibility to work from home, now is a great moment to let your boss know that you're in the process of buying a home, and it's possible that last-minute, time-sensitive documents might come along that need to be properly filled out. When your realtor inevitably passes along that one document that needs to be signed ASAP in the middle of your work day, you'll feel better knowing that you were prepared ahead of time and don't have to annoy your manager in order to get it done.
For those of you who struggle with organization, trust me: this is the perfect time to overcome that hurdle and make sure all your information is stored in one easy-to-navigate place. I found Google Drive to be an invaluable resource, where I could keep secure copies of bank statements, employment verification forms, and other important documents in organized folders and access them whenever I needed to, even from my phone. If you prefer to keep things on physical paper, start a new file folder so you can access any important documents easily, without having to dig through a zillion statements or outdated pieces of paperwork. You're about to go on some pretty hefty scavenger hunts to find the information you'll need to prove yourself worthy, so organize your life ahead of time.
16.If any terminology comes up that you're unfamiliar with, ask a professional to clear things up (and don't feel weird about it).
17.Your final walkthrough is anything but a throw-away, so come prepared.
18.Post-closing, your credit score is going to go on a rollercoaster ride. This is 100% normal — but it doesn't hurt to be prepared for it.
Though the (occasionally excruciating) process of buying your first home can, quite literally, feel like the sky is falling at all times...it was worth it in more ways than I could have ever imagined. 10 months in, and I can happily report that any stress or anxiety I experienced was nothing compared to the joy of having a little place 👇 that's 100% mine.
If you recently bought your first home and have any helpful tips or advice that you're dying to share, let me know in the comments. Happy home-buying! I believe in you!
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