First-time home buying is always tricky if you fill your mind with many suggestions from different people. So, please keep it simple, don’t rush, and clear your mind from all qualms.

Our team prepared some tips that help you buy your first home and the second and the third and so on. After buying your first home, you will enjoy the process and gain plenty of experience.

Here are the tips for first-time home buyers.

1. Don’t rush into buying

Home buying is time-consuming, and it becomes easy if you have some experience and homework. If you decide to buy a house, first do some market research and start saving money; you will need it badly. Don’t rush into buying process; have some patience and be flexible.

2. Save each penny

Home buying is a crucial financial investment a person could make. Sometimes when the home buying time comes, people run short of money and become bankrupt. Majorly, it is due to not following budget management strategy.

Pro-Tip; before getting jump into the home buying process, you should have at least six to seven months of living expenses as an emergency fund.

3. Know your credit report

When you apply for a loan or evaluate your application for a mortgage, a bank or lender looks at your credit score and credit report. A credit report gives a brief overview of your financial health in the past.

By evaluating your report, the bank or lender decides what your interest rate should be. Here is a rule of thumb, the better your credit score and report are, the lower your interest rate will be.

Pro-Tip; keep an eye on your credit report and act accordingly.

4. Set your budget

You know your budget well. By knowing your financial condition, you can choose from the following list;

• If you are debt-free, you can go for up to 5x your household income.
• Up to 20% of income goes to pay down debt; you can go for 4x of your household income.
• More than 20% of monthly income goes to pay down debt; you can go for 3x or less of your household income.

5. Aware of hidden cost

Homeownership is a blessing, but it comes up with many hidden charges. A first-time homebuyer should have some savings for these hidden costs. These out of sight costs included property tax, HOA dues, insurance, repair, maintenance, etc.

To get the idea of these vailed costs, a buyer should consult with a utility provider and, the property taxpayer.

6. Pre-approval before buying

A pre-approval letter from a lender makes a potential buyer stand out among others. It also shows that you are approved for a mortgage amount and serious about buying.

Pro-Tip; Always get mortgage pre-approval before diving into buying.

7. Looking for options

New Jersey Housing and Mortgage Finance Agency (NJHMFA) Down Payment Assistance (DPA) program encourages New Jersey first-time homebuyers by providing $10,000. The buyer can use it for either down payment or manage the closing cost.

This loan is interest-free, but the participant should be a first-time home buyer in NJ and take out an NJHMFA first mortgage loan.

There are some other options available that buyers can consider;

• Federal Housing Administration (FHA) loans
• US Department of Agriculture (USDA) loans
• US Department of Veterans (VA) loans

8. Compare rates

First-time home buyers get mortgage rates quotes from at least three lenders and compare, analyze and then decide. Annual percentage rate, the total cost of a loan, and additional fees are the key factor to compare among the lenders.

9. Always have backup

Don’t put all your eggs in one basket. Homeownership comes up with many upfronts and hidden charges. Make a plan and try to stick to it. Don’t spend all your hard-end money on buying your first home. Make some reserve of your income as an emergency fund. If something gets odd, you should have money to eat.

10. Find a good realtor

Home buying is not a solo game, at least not for the first-time homebuyer. The first time you need a realtor who not only helps you buy a home but also educates you along the process. Get some recommendations from friends or family about the realtor, interview with at least three realtors in NJ, analyze, and then choose one.

Pro-Tip; Work with a patient realtor rather than an imperativeness one.

11. Find a home inspector

It is highly recommended that beginner buyers hire a professional home inspector. He inspected the home and gave you recommendations about the house’s safety and repair if needed.

By knowing the pros and cons of the house, you can better negotiate with the seller about the asking price and ask him for repair if needed.

12. Buying your first home

Having a new home is overwhelming. To make the process easy, you need to do some homework. You can follow these tips and keep yourself safe from the common traps, where new home buyers mostly fall.