Your first home: Professional tips to start buying your first home

Did you know that 82% of people who bought a home for the first time in 2020 did it at the age of between 22 and 30 years? If you are in ...

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Did you know that 82% of people who bought a home for the first time in 2020 did it at the age of between 22 and 30 years? If you are in this age range and you are thinking of purchasing a property for the first time, you are at the perfect time to find out what the first steps you should take are.

Buying your first home is one of the most important financial decisions you can make, and that is why it is important to identify the correct steps before applying for a mortgage loan or giving a down payment on your first home: Discover the most pro tips from the experts!

How do you know if you are ready to buy a house?

Concept of first house with a tiny one protected by hands

One of the first tips you’ll hear from experts to determine if you’re ready to buy your first home has to do with your financial stability; it is not necessarily about not having debts, or reducing expenses as much as possible, but to have at least 20% of your total income to allocate it to the payment of a mortgage for a period of between 15 and 30 years.

Any figure above this percentage could mean a negative impact on your finances and force you to modify your current lifestyle, sacrificing some expenses and even putting your assets, investments or the possibility of saving for retirement in the way you have contemplated at risk.

Explore First Time Buyer Programs

A half sketch of a first house inside

Institutions specialized in mortgage loans and personal loans such as Rocket Mortgage, offer an extensive section of resources for first-time buyers where you can explore financial aid for down payments, closing fees, and other special programs to help first-time buyers working in areas like education and emergency services.

As a first time buyer, you will have access to federal programs, such as government-backed loans or the Good Neighbor Next Door, an assistance program promoted by the Department of Housing and Urban Development. If you do not apply for these, there are also options offered by non-profit organizations, which are special for people who report low or moderate income.

Avoid financing before applying for your mortgage


If you have made the decision to buy a house in the short or medium term, the ideal is to start a process of organizing your finances and determine which expenses you can continue to sustain and which ones you should cut. The purpose of this is to allocate your resources towards the payment of a mortgage and an advance, but also to maintain a credit score that opens the doors to better loans.

Remember that the purchase of a house represents one of the most important expenses that you will make in your life, for this reason, experts recommend avoiding large or long-term personal loans before buying a house, since in case of having difficulties to pay your personal loan you would face a potential decrease in your credit score.

Improve your credit score


If your plan is to buy a house in the medium term, you are at the ideal time to make the right financial decisions, and this includes improving your credit score. Remember that, depending on the mortgage you wish to access, they could request a credit score between 670 and 739 points.

To improve your credit score, you have the option of requesting a prepaid or secured credit card, avoiding delays in your monthly payments on credit cards or utilities, or, in some cases, requesting clarifications in order to increase your credit score in case there is an error in your reports.

Compare the mortgages to which you will have access

A couple discussing the purchase of a first home with an executive

The mortgages to which you will have access will depend on your interests and your financial situation. In this step, you should consider the period in which you will be able to complete the mortgage payment and the main categories in which these fall, such as loans for veterans, loans from the Department of Housing and Urban Development, as well as from the Federal Housing Administration.

Another option is conventional mortgages, which are not linked to the government. In general terms, most of the available mortgages offer the opportunity to make down payments from 3% the total value of the house you want to buy. In the case of veterans aid, no down payment is required.

Set a budget


If you have an excellent credit score, it is likely that financial institutions will offer you a higher mortgage than you had contemplated for the purchase of a house, but experts recommend establishing a budget that fits your current and future financial needs, contemplating the expenses associated with your lifestyle.

A tip from the experts is to consider the size and conditions of the house you want to buy, in addition to following the 28% rule in which it is recommended that the monthly payment of a mortgage should represent a maximum of 28% of the monthly income of the person who is paying it.

Contact a real estate agent


Finding the best home for you starts with contacting a real estate agent who has extensive experience, good references and expert knowledge about the area in which you are considering buying your first property, as he will help you find the best options taking into account your needs, budget and future plans.

With these steps, you will be prepared to properly follow the process of buying your first home, a decision that, according to experts, should be completed avoiding impulsive decisions that put your long-term financial health at risk.