We’ve got strategies for saving for your down payment, applying for a mortgage, finding the right home, and more.
For many, the idea of buying a home fits into a linear timeline of major life events somewhere after college and marriage but maybe before the kids arrive. While there’s certainly nothing wrong with that, today’s home buyer doesn’t fit neatly into any one box — and there is certainly no one right time to buy your first home.
The Texas Association of Realtors reports that today’s home buyer demographic is increasingly diverse, with:
- Single female buyers making up nearly 20% of all purchasers
- Single male buyers increasing to nearly 10% of all purchasers
- First-time buyers waiting until at least 35 to purchase a home
- Median home sellers’ age decreasing by almost a decade to 46 years old
- Increasing ethnic diversity, with 25% of home buyers identifying as minorities
Based on this data, it’s not a huge stretch to consider that first-time home buyers will likely have a pretty good idea of what they want out of their living space. But they also want to ensure that they’re making a good investment.
Buying a home is a big deal. When you are ready to purchase the first time, you may feel as though you’re entering an entirely new territory, which can be uncomfortable — especially if you’re a successful professional who is used to feeling on top of things. That’s why we have compiled this list of tips to help you feel more confident as you move through the process.
Tip #1: Start Saving Early
Chances are, you have considered this already — but if not, now’s the time. The more you have put aside for a down payment and other move-in costs, the more likely it will be that you can get the home you want.
The larger your down payment, the smaller your loan (obviously). However, having a significant down payment can also make you a more attractive buyer to both mortgage companies, who may offer you lower interest rates, and sellers. When a home receives multiple offers, a larger down payment suggests less chance of your financing deal falling through, which makes yours a less riskier offer to accept.
In addition to the down payment, costs associated with buying a home can add up quickly. While you will hopefully negotiate some of the actual closing costs with the seller, moving into a home comes with a number of sometimes surprising costs, like:
- Appraisal fees
- Mortgage broker fees
- Loan origination fees
- Flood certification
- Title insurance
- Courier and wire transfer fees
- Pest control and law service
- Interior designer services
- Window coverings and drapery
- New rugs and furniture
While you may not be moving from your college dorm into your dream home, the likelihood that your new home will fit your old furniture and decor is slim. Whether you decide to work with a designer or take on the creative challenge yourself, it’s important to be prepared to invest in making your new surroundings functional and aesthetically appealing.
Tip #2: Get Pre-Approved
While preapproval is not necessary to start shopping around, some realtors won’t even work with you without a preapproval letter from your lender. If you’re seeking a custom build, you may need a letter of conditional approval, which is an even bigger vote of confidence that your loan will close.
You may also decide to inquire if your bank will offer you priority buyer status, which fast-tracks the process, making you an extremely attractive buyer.
Some people may confuse prequalification with preapproval. Prequalification is simply a confirmation of what you likely already know: how much home you can afford.
Tip #3: Evaluate Your Daily Life
Some might advise you to think about where you want to live, while others might advise you to think about your amenities. Those are all important details when you are making a six-figure commitment, but how do you begin to decide?
Consider your daily routine now:
- What do you love about your life?
- What do you want more of in your life?
- What do you have now that you can live without?
Answering these questions can help narrow down where you should be looking for a home and what nonnegotiables must be included in the home you purchase. First-time home buyers often fall in love with a home itself without considering how it may — or may not — suit them on a daily basis.
Can’t live without the convenience of having your favorite dumplings delivered on (at least) a weekly basis? That may be insignificant to some, but if having access to convenient, delicious food is a nonnegotiable for you, it’s something you will want to look into before committing to an address.
Perhaps you’re accustomed to being right in the heart of a bustling social scene, with bars, shops, and diners just steps away. If you find yourself falling in love with the expansiveness of a sprawling home in McCormick Ranch, for example, be sure to ask yourself if you’re ready to exchange the nightlife for lake life. Plenty of first-time home buyers are, which is why they’re shopping for a home in the first place, but it deserves an honest reflection.
Tip #4: Get Smart
No matter your academic or professional achievements, moving from renting to owning comes with a steep learning curve. You don’t need to hire a personal assistant to file your appliance user manuals or document the exact shade of your home office’s accent wall, though — just download an app.
These days, you can download apps to:
- Identify and save paint shades
- Acclimate to your new neighborhood
- Remind you to perform home maintenance
- Browse design inspirations and shop the looks
- Access user manuals, receipts, and warranty information
- Save on electricity to reduce costs and your carbon footprint
Tip #5: Plan for Resale
Even if you’re shopping for your forever home, life happens.
The national average homeownership lasts about eight years. Whether you might be upgrading, downsizing, or moving locations in the future, it’s something to keep in mind before you decide which upgrades to make to your new home now.
While you likely don’t want to make every decision about your home with selling it in mind, some upgrades add more value than others:
- High-quality windows
- Cabinetry and kitchen islands
- Durable and high-quality flooring
- Exterior stone veneers
- Open, modern kitchens and baths
You want to enjoy your home, so don’t be afraid to customize! However, if you’re on the fence about what choices to make during a custom build or what to remodel in an existing home, thinking about the return on your investment can be helpful.
Buying your first home is one of the most exciting — and stressful — times you are likely to experience! Hopefully, these helpful first-time home buyer recommendations will help you make the right decisions so that you can simply enjoy your new home and neighborhood.
Paradisa homes can be custom-built for your needs, or you can check out our move-in ready inventory. Contact us today to learn more about upcoming opportunities in Austin’s most desirable neighborhoods.