Tips for First-Time Home Buyers

Buying a home is a big step in life. Before you kiss your renting days goodbye, arm yourself with tips for buying a house to help make one of the most significant investments in your life a breeze. If you're a first time home buyer, these home buying tips will prepare you to make the leap from renter to homeowner.

7 Things You Need to Do Before Buying a Home

1. Are You Ready to Buy a Home Now?

Before you jump headfirst into the home-buying process, consider why you feel motivated to buy a house. While the financial aspect of saving for a down payment is pretty straightforward, those savings are not the sole indicator that the time is right for you to buy. A Money Magazine article by Time suggests that potential homebuyers assess whether they're planning to stay in the area for at least seven years.¹ If you're not planning on planting roots, you may end up losing money in the long run.

2. Is it a good time to buy?

One of the best tips for buying a house is to do your research on the housing market in the area. You may find that it's a seller's market, placing you in a position to potentially lose money when you decide to sell down the road. If you find yourself in the midst of a real estate boom with soaring home prices, consider waiting for the market to come back down before you buy.

3. Make a list of "must-haves"

It may seem obvious, but one of the most pertinent home buying tips is to make a list of characteristics you want your house to have. Your must-have list can include anything from the number of bathrooms to a wraparound porch, but be prepared to be flexible with your list.

If you're imaginative, you won't have trouble envisioning how a potential house will look after you buy it and begin to make it your own, especially if it doesn't feature every "must" on your list.

If you have trouble visualizing a home's potential, consider the "bones" of a house before you pass. The paint colors may not be your taste and the cabinets might be made of a wood you don't like, but these things can be easily changed. On the other hand, a home lacking a basement won't be a good choice if you have one on your list.

4. Buy for the future, not for today

Take the time to consider what type of property you want to buy; it's important to envision your life five to 10 years in the future. Buy a house that fits that picture, rather than your current situation.

For example, if you're planning on starting a family—or adding to your existing family—a townhouse may be too small for you in five years. Rather than being forced to eventually sell because of lack of space—and potentially losing money from your initial purchase—buy your family home now.

Dana Bull told NerdWallet that "many first-time home buyers assume they'll be in a home much longer than they actually are," because they don't realize how quickly their lives can change.²

5. Do your research

The internet has changed the home-buying process, making real estate information more accessible than ever. With your list of "must haves" in-hand, you can input those into popular home search databases to see listings filtered to your specifications. Homebuyers can narrow down options and even take virtual home tours before ever contacting an agent. Decide whether you have the time and the patience to do a lot of the legwork yourself or if you want an agent to guide you through the process.

If you decide that you want an agent to lead the way, reach out to friends and family for recommendations. You'll want to make sure that you work with someone who is both reputable and knowledgeable; word-of-mouth is often the best way to find them.

Don't worry if you don't have any recommendations; you can check out real estate agency reviews through Google or consult a consumer review-based site.

6. Get pre-approval

Before you begin house hunting in earnest, make sure that you work with a mortgage company to get pre-approved for a loan. Your agent can recommend a company for you to work with, or you can choose one of your own. Just make sure you have pre-approval before you begin house hunting.

The pre-approval process can help you work out any credit issues you may have before you have to put in an offer. Getting pre-approved for a mortgage can give a realistic idea of your budget for a house, which helps guide the search process.

Once you're pre-approved for a mortgage, you're free to put in an offer on a home when you find one that checks off the items on your list; depending on the market, you won't want to wait too long to put an offer in on a house you like because someone else may beat you to it.³

7. Find out what kind of mortgage you need

Unless you're paying cash for your home, you'll need to take out a loan to finance your purchase. There are two types of mortgages available for home buyers: fixed rate and adjustable rate. Fixed rate mortgages are predictable, and the monthly payment stays the same—or gets lower towards the end of the mortgage repayment. Adjustable rate mortgages begin at a lower monthly rate but increase over time with the market.

First time home buyers would do well to chose the stability of a mortgage with a fixed rate, and may be eligible for a first-time homebuyer mortgage that's backed by the Federal Housing Administration. Once you've chosen the rate that works best, you can then choose the repayment length; the shorter the term of the loan, the higher the monthly payment, and vice versa.

While you may not be a home buying expert, these tips for buying a house will have you well on your way. And once you find the perfect house for your family, don't forget to make sure it's secure. Call ADT to create a custom home security system to protect both your new home and your family.