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What It's Really Like To Buy Your First Home: A Guide

A little education about what it's really like to buy a house can simplify the home-buying process.

Finance

According to Statista, "Approximately 82 percent of Americans aged 22 to 30 who bought a home were first-home buyers, whereas only just under half of the homebuyers between 31 and 40 bought their first home in that year." This means, unsurprisingly, most first-time homebuyers tend to be in the beginning stages of a budding career, taking higher-education courses, and trying to keep up with student loan payments.


Gen Z and Millenials have so much to juggle already, purchasing a house can feel like another stressor — but a little education about what it's really like to buy a house can simplify the process.

Take Advantage of First-Time Homebuyer Benefits

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Buying a home as a first-time homebuyer can be nerve-wracking, but your "first-time" status unlocks several perks. First-time homebuyers are eligible for loan programs, tax breaks, and assistance programs that are created to increase homeownership accessibility. You might even still qualify for first-time homebuyer programs, even if you've owned a home before. Don't neglect options created to help you on your journey to homeownership. Know your options.

First-Time Homeowner Loan & Assistance Programs

  • FHA Loans - An FHA loan is a government-backed mortgage that is guaranteed by the Federal Housing Administration, but issued by private lenders. It's hands down the most popular loan option for first-time homebuyers since they have low down payment and credit requirements.
  • USDA Loans - USDA loans are mortgage loans backed by the U.S. Department of Agriculture that make housing affordable in rural areas. Since they're government-backed loans, they can provide lower interest rates. On top of low-interest rates, borrowers don't have to pay a cent towards the down payment.
  • Good Neighbor Next Door - The Good Neighbor Next Door Program was created by The U.S. Department of Housing and Urban Development (HUD) to strengthen communities by offering teachers, law enforcement, firefighters, and EMT's the ability to purchase homes at a reduced rate. Purchase HUD homes for 50 percent off the list price with a low down payment of $100.

There are several first-time buyer programs to choose from. Do your research to track down the option that fits your needs.

Address Your Financial Health

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Review Your Credit. Even though the average credit score for homebuyers in America is 731, most people can qualify for conventional loans with a credit score of at least 620. But, a lackluster credit score doesn't kill your homeowner dreams. You can still buy a home with bad credit if you know your available options.

Calculate Your Expenses. Mortgage payments can take up a good portion of your expenses, but living expenses can as well. It's hard to narrow down your list of potential homes when you don't know what you can afford long-term. Before looking for a home, sit down and calculate your living expenses. This can include an estimation of monthly car payments, student debt payments, entertainment expenses, retirement savings, and other regular commitments.

Check Your Current Savings. If you have savings tucked away, that still might not be enough since you have to consider upfront costs, long-term and closing costs. Trust and believe, you don't want money getting in the way of landing the perfect home and keeping that home in the long-term.

  • Do you have enough savings to cover your down payment? If you're not financing your home using a program that eliminates a down payment, then it's important to know what you're expected to pay upfront when purchasing a house. Make your life easier and use a down payment calculator to estimate your potential costs, so you have the money prepared when you're ready to buy your brand new home.
  • When purchasing a home, you have to consider if you can afford the home in the future as well. It's smart to have an emergency savings account that can cover at least 3 to 6 months of living expenses on top of savings that are specifically for the costs that come with purchasing a home.

Find A Home & Make An Offer

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Once you have your finances figured out, it's time to start searching for a fabulous home with all of the features you've envisioned in your head. The entire process of searching for a home can be overwhelming, which is why it will make your life a whole lot easier to hire a local real estate agent. And, homebuyers on the lookout can scour online listings or take a drive through your desired neighborhood to see if any homes are for sale.

When you've finally found a house that you'd like to call home, the only thing left to do is make an offer. If you choose to work with a real estate agent, your agent will help you to decide how much money to offer the seller in exchange for the home and any other conditions you want to put on the table. The real estate agent will present your offer and conditions to the seller's agent who will accept your offer or propose a counteroffer.

As the buyer, you can accept their offer or present your own counteroffer, and this process can continue until an agreement is made. Or, until one of the parties decides to opt out of the negotiation process.

Close On The Home

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If you get to this point, congrats! It's time to sign your name on the dotted line on several documents and cross your fingers that the deal doesn't fall through the cracks. This is the time to focus on closing costs which can include purchasing home insurance, getting a home appraisal, and any extra fees.

In 2020, the homeownership rate amounted to a striking 65.85 percent! Who knows, after exploring your first-time homebuyer programs, addressing your financial health, and finding your dream home, you could be a part of that large chunk of American homeowners.

You're armed with the tools to start your search for a home fit for a queen like yourself, so there's nothing between you and your homeownership goals now. Happy house hunting!

Featured image by kate_sept2004/Getty Images

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