Several Important lessons I learned from my first home purchase that you can use with yours.

My first home purchase was a somewhat scary venture into the land of official “adult hood”. I, like millions of others, had been a classic renter in a run down, over priced apartment. When that finally lost its appeal I decided to start looking for a home to call my own. What follows in the culmination of my first experience in the real estate market.

  1. Know Your Credit

    The one thing I had actually anticipated was a credit check. Yet I was still surprised to see how much this actually affects your home purchase. From the amount home you can purchase, to the interest charged, your credit score will dictate all of this. Especially now that the sub-prime market has collapsed, it is increasingly hard to obtain a loan with a credit score below 600. If you know your credit score, and you know where your weaknesses are you can prepare for this in advance. There are a ton of other sites out there that can help you manage and repair your credit history, just know it needs to be in order before you go any further.

  2. Save. Save. Save.

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    The biggest mistake I made was not having enough in savings. I managed to get through my closing, but I was counting pennies when the whole thing was over with. Some often overlooked cost to remember when purchasing a home are, utility activation and deposit fees, moving cost, closing cost. And anything else that can happen at this already eventful time in your life probably will. Mine was the clothes washer dying the first week in my new house and the water heater busting a leak in the same month. Just know that you need to save, even if you plan on financing 100 percent of the loan you will still be required to pay some fees, and of course the other cost associated with moving. Having that extra bit of padding in your savings will save you TONS of stress, believe me.

  3. Get Approved First!

    Another mistake I made was finding the house I wanted before knowing if I could even afford it. Needless to say, I wasn’t able to qualify for a loan that would allow me to purchase that house. Becoming emotionally attached before I knew if I could even finance it was a major blow. So my advice is to shop for a great loan officer before you look at any properties. Don’t settle for just any loan officer either. They are not all created equal. I asked for referrals from some other home buyers and listened to their experiences. A good loan officer will make the entire process run as smoothly as possible, and will talk to you, not over you. Don’t be afraid to walk out on a bad loan officer, they work for you, you are paying them. Fortunately I landed a good loan officer who I will return to next time I buy a home.

  4. Research Grants

    Many states and non-profit organizations off incentives for first time home buyers. By going to an 8 hour class on home ownership, I was actually able to land about $7,000 to use for closing cost and down payment from a state program. A good loan officer will be able to help you find some of these, but you should also look for them on your own. Check your state government’s website for more information.

  5. Watch. Watch. Buy!

    Time may be an issue for you, especially if your living situation is being forced to change soon. However, if you have a little bit of time, watching the real estate market in the area you want to live can prove to be very wise. I was able to land a killer deal by waiting out for something special to catch my eye. There are great sites that list houses for sale all over the place. Find one for your area and study it.

  6. Get Your Own Agent

    Never use the selling agent as your agent; you want someone that will represent you and your interest. I actually find the real estate agent to be a little less useful than the loan officer. But that’s because I did my own property finding, her greatest contribution was gossiping with the other agent which gave me some information to use when bargaining for a price. She was able to find out the seller was in a pinch and hadn’t had any other offers in weeks. Whereas the selling agent would have probably never told me that.

Hopefully these tips will help your first home purchase go much more smoothly than mine did. Good luck!