Buying a first home is a major purchase, and one that can be filled with surprises. To avoid any unpleasant news from your real estate agent or bank, take these steps to prepare for your first home purchase before you start looking for your new home.
Save a Down Payment for your First Home Purchase
The first step to buying a new home is having enough money to actually buy it. The best practice for new homeowners is to save at least 20% of your future home purchase price as a down payment. This will help you avoid the expense of private mortgage insurance and will help smooth out the approval process.
To begin saving, create a separate savings account and schedule automated monthly transfers every payday to your down payment fund. Making it automated means you don’t have to think about it. You’ll have your 20% down payment before you know it!
End Your Old Rental Lease
Once you are on track for your down payment, start planning on how your other expenses will change. One important expense to end is your old rental apartment or house. Most landlords will allow you to go month-to-month once your annual lease ends, but sometimes at a higher monthly rate.
It can be worth it to pay more for a month-to-month lease while your are house hunting, but plan it out as well as you can so you can minimize months out of lease. On the other hand, you don’t want to buy a home and get stuck paying for two places for more than a month, as double paying gets expensive fast.
Get Pre-Approved for a Mortgage for Your First Home Purchase
When you have your down payment saved and you are getting ready to start your house hunt, the next step is to contract your bank (or shop around for the best rates) and get pre-approved for a mortgage.
The pre-approval process will give you a home buying budget, and a pre-approval letter will help you out in the offer process once you find a home you like. Keep in mind that a pre-approval is not the same thing as a pre-qualification. Be very specific when you talk to the bank that you want to be fully pre-approved, which is worth more than a pre-qualification and may speed up your closing process.
Find a Quality Real Estate Agent for Your First Home Purchase
Now that you have your down payment, a pre-qualification letter, and a schedule to get out of your old rent, it is time to start searching for a home.
You can start looking online or with your favorite real estate apps, but when you get serious about looking for a home, you should hire an experienced real estate agent. For that search process, head to AgentHarvest. We have a listing of experienced, qualified, vetted real estate agents who you can trust with the biggest purchase of your life.
Don’t put your purchase up to change. Go with someone you can trust, and find that person at AgentHarvest.