Thinking about buying your first home? Love that journey for you! But listen, this is a big move, so let\u2019s make sure you do it right. Start stacking that cash now, and remember: everything\u2019s negotiable\u2014yes, literally everything.<\/p>\n\n\n\n
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First things first: know your budget<\/a>. That means factoring in the house price, down payment<\/a>, closing costs<\/a>, and all the future maintenance drama. Oh, and property taxes? They\u2019re part of the package too.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n A higher score <\/a>means better mortgage rates, which translates to more money for those housewarming parties. If your score needs a refresh, now\u2019s the time to work on it. Aim for a score of 580 or higher (that’s the minimum for most FHA loans).<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Where you buy affects everything\u2014home price, taxes, commute, and how your life\u2019s gonna feel day-to-day. Want good schools or a short commute? Make sure your new neighborhood vibes with what matters most to you. This is your playground, after all. <\/p>\n\n\n\n <\/p>\n\n\n\n Here\u2019s how it can play out in different states:<\/strong> <\/p>\n\n\n\n <\/p>\n\n\n\n Alabama:<\/a> Home prices and property taxes are pretty low in Alabama, making it easier on your wallet. But, depending on where you\u2019re looking, you might find fewer amenities or less-developed infrastructure. The good news? There are solid first-time buyer programs with down payment assistance and favorable loans to help you out.<\/p>\n\n\n\n <\/p>\n\n\n\n Virginia<\/a>: Virginia offers both city and country vibes. In Northern Virginia near D.C., high home prices can be a hurdle for first-timers, but state programs often step in with down payment and closing cost assistance. Move to rural Virginia, and homes get more affordable, though you might face longer commutes and fewer local perks. If you can buy close to a metro line into the city, you could get the low prices with a relatively straightforward commute. <\/p>\n\n\n\n <\/p>\n\n\n\n New York<\/a>: New York\u2019s market is a mixed bag. In NYC, expect sky-high prices and unruly competition, which can make buying your first home a challenge. Upstate New York is more affordable, but you might be farther from jobs or services.<\/p>\n\n\n\n <\/p>\n\n\n\n Talk to different agents, tour different places, and get a feel for the pros and cons of moving to a specific area. Take a look at the difference in estimated monthly payments, for example, when checking out homes online.<\/p>\n\n\n\n <\/p>\n\n\n\n But, remember: You probably won\u2019t be there the rest of your life. Many people only hang on to their first home for 6-8 years, so think about what life looks like then. Think about buying early, earning some value on the property, and step into the \u201cforever home\u201d later.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Here\u2019s the silver lining\u2014even if your credit score takes a small dip from a hard check, you\u2019ve got the power to boost it back up. Making your mortgage payments on time isn\u2019t just good for your bank account; it\u2019s also going to help your score rebound and get even better over time. Payment history is a big deal for your credit score, and showing the world that you can handle your finances like a boss is going to pay off. Plus, having a mortgage adds some diversity to your credit mix, which can give your score a little extra love. So, while that initial dip might sting a bit, solid payment habits will set you up for a stronger credit score in the long run.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n The bigger the down payment, the lower the monthly payments and insurance costs, and the lower the overall cost of the loan. But, waiting around to save enough for a down payment isn\u2019t a great financial strategy either. And you could also use that down payment cast to buy down your interest rate, for example.<\/p>\n\n\n\n So, talk to a lender as soon as you\u2019re thinking about buying so that you know what your options are. You\u2019ll thank yourself later when you\u2019re sipping ros\u00e9 in your new living room.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n You\u2019ve got options, so don\u2019t settle for the first thing that comes your way. Conventional, FHA, VA\u2014they all have their perks and quirks. Do your homework and pick the one that suits your situation best. You deserve nothing but the perfect fit.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Always get a home inspection. Seriously, don\u2019t even think about skipping it. It\u2019s your best defense against nasty surprises post-move-in. And if you\u2019re eyeing a foreclosure, tread lightly. Some don\u2019t come with seller disclosures, which could mean hidden repair nightmares<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Let\u2019s talk fees. Lender fees can be sneaky little devils, but not with us at Tomo Mortgage\u2014we keep it transparent. Still, remember that owning a home is more than just your mortgage. Be ready for the extras\u2014maintenance (1% of your home price per year), repairs, insurance, and more.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n What\u2019s your plan? If you\u2019re not sticking around long, consider the resale potential or whether the place could make a fab rental. Pro tip: Avoid HOAs if you\u2019re thinking of renting it out\u2014those rules can be a drag. And plan to live there for at least two years before selling to dodge those annoying capital gains taxes.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n If you\u2019re a first-timer, FHA loans are basically your bestie. With just 3.5% down, you can get a place, and qualifying is way easier than with conventional loans\u2014sometimes you only need a credit score of 580. FHA loans also have flexible debt-to-income ratios and consumer protections that ensure the property meets safety standards (saving you from major repair costs). But, if you\u2019re into fixer-uppers, keep in mind FHA loans might limit your options.<\/p>\n\n\n\n <\/p>\n\n\n\n Freddie Mac<\/a> First Look Initiative: <\/p>\n\n\n\n <\/p>\n\n\n\n Bad news: as of 2024, there\u2019s no federal first-time homebuyer tax credit<\/a> anymore (RIP to the one from 2008). But don\u2019t stress\u2014there are still some financial perks out there! You can usually deduct mortgage interest, property taxes, and loan fees on your taxes. Plus, many states and local programs offer their own grants and assistance for first-time buyers. You\u2019ve got options!<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Here\u2019s a taste of what\u2019s out there:<\/p>\n\n\n\n California:<\/a> Georgia:<\/a> Florida:<\/a> New York:<\/a> <\/p>\n\n\n\n <\/p>\n\n\n\n When it\u2019s time to get that first mortgage, here\u2019s what to expect: <\/p>\n\n\n\n You\u2019ll need a down payment, typically between 3% and 20% of the home\u2019s price. FHA loans might let you slide in with just 3.5%. Your interest rate depends on your credit score and loan type\u2014higher scores get the good stuff.<\/p>\n\n\n\n <\/p>\n\n\n\n Your monthly payments will cover the loan principal, interest, property taxes, and homeowners insurance. Plan accordingly. Mortgages usually come in 15- or 30-year varieties\u201430-year loans mean lower monthly payments but higher total interest.<\/p>\n\n\n\n Don\u2019t forget about closing costs, which can add up to 2-5% of the home\u2019s price. Get pre-approved before house hunting so you know your borrowing limit and can show sellers you mean business. And FYI: Mortgages are amortized, so early payments go more toward interest. Learn about fixed-rate vs. adjustable-rate loans to find your perfect match.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n On average, first-time buyers put down 6% on their first home. That\u2019s $30,000 on a $500,000 home or $18,000 on a $300,000 home. Don\u2019t have that much saved? Don\u2019t sweat it\u2014you can go as low as 3%, cutting those down payments in half.<\/p>\n\n\n\n As of June 2023 (self-data), the median price for a starter home was $243,000, so a 6% down payment would be just under $15,000. The average salary of a first-time homebuyer in 2023 was around $95K according to the National Association of Realtors.<\/p>\n\n\n\n So, say you\u2019re making $95K, looking at a $243,000 home, and plan to put 6% down. If you save 10% of your annual income, you\u2019ll have that down payment ready in about two years (depending on your local taxes). But, heads up, $95K is higher than the median household income in the US (just under $75K), so if you\u2019re earning closer to the median, expect to save for an extra 6-12 months.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Buying your first home is exciting, challenging, and totally worth it. By planning ahead, knowing your financial options, and tapping into available assistance programs, you\u2019ll be on your way to homeownership with confidence. Now go get that house!<\/p>\n\n\nCredit score – score<\/h3>\n\n\n\n
Location, location, location<\/h3>\n\n\n\n
Keep that score high<\/h3>\n\n\n\n
Down payment: go big enough<\/h3>\n\n\n\n
Loan types: shop like you mean it<\/h3>\n\n\n\n
Home inspection: don\u2019t skimp<\/h3>\n\n\n\n
Hidden fees? never heard of them<\/h3>\n\n\n\n
Think long-term: plan like a pro<\/h3>\n\n\n\n
First-time home buyer assistance: what\u2019s in it for you?<\/h3>\n\n\n\n
<\/strong>Tired of investors snatching up all the good houses? Freddie Mac\u2019s got your back. Their First Look Initiative gives homebuyers and nonprofits first dibs on HomeSteps properties before the investors can pounce. It\u2019s all about making homeownership more accessible and supporting communities.<\/p>\n\n\n\nFirst-time home buyer tax credit: <\/h3>\n\n\n\n
First-time home buyer programs in your state<\/h3>\n\n\n\n
<\/strong>Check out the California Housing Finance Agency (CalHFA) for down payment assistance.<\/p>\n\n\n\n
<\/strong>The Georgia Dream Homeownership Program is your go-to for down payments and affordable mortgage options.<\/p>\n\n\n\n
<\/strong>The Florida Housing Finance Corporation (FHFC) has you covered for down payments and closing costs.<\/p>\n\n\n\n
<\/strong>Look into the State of New York Mortgage Agency (SONYMA) for various first-time buyer programs. They\u2019re basically your new best friend.<\/p>\n\n\n\nWhat to expect from Your first mortgage: no surprises<\/h3>\n\n\n\n
Average down payment for first-time buyers: let\u2019s break it down<\/h3>\n\n\n\n
Conclusion: own it<\/h3>\n\n\n\n