Buying a home is a major decision, one that can be especially intimidating for first-time buyers. But taking some advice from someone who’s been around the block a few times can help.
One of the best things about working with the Starlight team is that our experts have helped hundreds of first-time buyers find a home they love — and they know how to help you prepare for the process. We asked our team what advice they shared with buyers getting ready to look for their first house. Here are their tips.
1. Make a List of Your Needs, Wants and Dealbreakers
Of all the great tips our experts mentioned, this one was by far the most common. Nearly everyone recommended starting your homebuying journey by making a list of need-to-haves versus nice-to-haves.
“Write down all the features you would like to have in a home. Then, divide them into two different lists: one for must-have essentials that would be dealbreakers if they were missing, and another list for preferences and non-essentials.”
“The most important aspect when deciding on a home can vary from buyer to buyer. However, one thing remains constant across the board. When buyers are deciding on a home, separating the negotiables from the non-negotiables is very important. Deciding as a family on what features of the home they are willing to settle on versus the deal breakers will help a buyer not become discouraged if they aren’t finding the ‘perfect’ home rather than ‘ideal’ home.”
2. Do Some Prep Work
The more prepared you are, the smoother your homebuying process will be. Follow these tips before you get started on buying a home to make your journey easier.
“Prior to beginning your home search, I would encourage you to begin gathering your financial documents together, for example: W2 statements, pay stubs, bank statements and investment or pension information. To create a smooth process, create a file folder on your computer to have the files easily accessible. The next step is scheduling an appointment with a mortgage lender and/or your personal bank to get pre-approved. When they ask for the documents mentioned above, you will have them ready to go.”
“First, speak to a loan officer and find what you are approved for. If you have a partner, sit down with them and find out what monthly payment they are comfortable with. Then, make a list of what is important to your family in a home. Find out what general area you’d like to live or what areas you like to avoid.”
3. Don’t Be Intimidated by the Loan Process
Digging into your finances and applying for loans can be frightening at first, but remember, your loan officers are here to guide you through it.
“Applying for loans and mortgages can be intimidating, especially for the first-time homebuyer since there are many moving parts in the process. However, applying for a loan is not as scary as you may think. When qualifying a buyer, mortgage lenders will look into your credit score, debt-to-income (DTI) ratio, assets and employment history, among other factors.”
4. Know Your Buying Power
The one tip all our experts agreed on is knowing how much home you can afford — and it’s often more than you expect.
“Discovering your buying power is the most difficult step for first-time homebuyers in my own personal experience. I recommend getting with a loan officer to see how much house you can afford. Thankfully, Starlight Homes works with a participating lender, and we are happy to help guide you through that step!”
“Homebuyers can figure out how much they can afford by doing several different things. Calculating your DTI ratio will give you a great idea of how much you can afford based on your monthly expenses versus your monthly cash intake. Contact your lender early to determine their DTI requirements. For example, many lenders prefer a DTI below 43%. After calculating the DTI, budget your ‘fun’ monthly expenses, such as nights out, furniture and spending money, and the ‘unfun’ monthly expenses that come with home ownership, such as routine maintenance, bills, etc.”
Ready to Start Looking?
We’re here to help guide you through every step of the buying process. Talk to one of our Home Guides today to find out your buying power and start your path to a new home.