9 Things Most First-Time Home Buyers Don’t Know (But Need To)

Trish Lowe  |  October 12, 2022


Looking from the outside in, it can be a little daunting to imagine yourself beginning the home buying process. Yet once you’ve gotten started (or if you’ve gone through a home purchase before), you know that with an experienced realtor on your side, there’s nothing to worry about. In fact, buying a home can be one of life’s great experiences and help define a period of your life. There are several steps, however, and everything starts by taking the first one correctly. Let’s get started.

Start saving early and build credit


It’s never too early to start preparing your financial health for purchasing a home. Before you even start looking at homes or compiling a list of your must-haves, you should take an honest look at your finances and try to improve them the best you can. Here are the costs you should prepare for:

  • Move-in expenses: for moving furniture, immediate home repairs, and new furnishings. Plan to spend at least 1% of the sale price for this.
  • Down payment: likely the largest portion of your funds will go here. If you have excellent credit, you can sometimes lower this to 3%, but most are 5% or more.
  • Closing costs: sometimes these can stay hidden until it’s time to close. They usually cost 2%-5% of your mortgage loan, but you can negotiate with the buyer to lower this.
You should also try to boost your credit to improve your financial situation for your lender. Strengthening your credit can come from paying bills on time, keeping credit cards open, and staying up to date with the three credit bureaus.

Be realistic about your budget



First-time homebuyers can sometimes fall into the error of overestimating their budget. Whether you're looking for Montclair homes for sale, Stonecrest at Norwood real estate, or elsewhere, it’s important to be honest about what you can afford – and stick to it. A loan can extend for 15-30 years, so ensure that your income source is solid and that you have an adequate emergency fund to cover at least three months of expenses. Affordability calculators can help you plan for a mortgage too.

Learn about your lending options


Getting a mortgage can seem complicated, but as long as you know your options you’ll be ready to approach a bank already prepared. Some of the most popular mortgage options are:

  • FHA loans: ensured by the federal government, they allow down payments as low as 3.5%
  • VA loans: available for current or veteran military members, requiring no down payment
  • Conventional mortgages: are not guaranteed by the government, usually require 3%-5% down payments
  • USDA loans: apply to rural home buyers, requiring no down payment

Compare mortgage rates and check out assistance programs


Once you’ve picked a mortgage type, it’s time to look at the assistance programs available to you. These can be numerous:

At this point, it’s also a good idea to look around at the different mortgage rates that you qualify for. Look at the details of your mortgage loan. Many lenders will be able to provide you with discount points, where the buyer agrees to pay some fees upfront in exchange for a lower rate. You should also look at your interest rate and any additional origination fees.

Get pre-approved



Next, you’ll want to get a letter of pre-approval from your lender. This document proves to home sellers and their realtors that you are serious and that you’ve gone through the process of providing your lender with all the proper information. We recommend doing this step once you’re sure that you’re ready to shop for homes because you’ll have to hand over all your financial documents to your lender.

Choose a realtor that understands your needs



When you choose a real estate agent, you’re also choosing a cheerleader of sorts who will always be there to provide support for you throughout the process. A quality agent will be a local to the area who knows the neighborhood that you’re attracted to. They will also be able to handle negotiations with the buyer, answer legal questions, collaborate with other agents, and answer any questions you might have about local housing standards.

Select a home to grow into


Now it’s time to start looking at homes. You want to consider the whole package, including:

  • The neighborhood and your neighbors
  • Proximity to local schools and workplace
  • Curb appeal 
  • Housing market trends like rising real estate prices
  • Space to upgrade or welcome additional family members
  • Homeowners associations or fees
  • Privacy and backyard space
At this point, you should also determine the condition of the home you’re intending to live in. Are you okay with spending time upgrading a fixer-upper at the outset? Will you have to reconfigure the floor plan without too much effort? What are the costs of local contractors? Do zoning laws allow you to increase the footprint of the home? These are all important points.

Don’t skip inspections



It can be inviting to go all in with a home that speaks to you and close on it without considering the so-called “bones” of the property first. It’s always worthwhile to purchase a quality home inspection before signing on the bottom line. Buy an all-inclusive inspection that tests for:

  • Radon, mold, pests, and any ambient hazardous gasses
  • The foundation and condition of the roof and walls
  • Crawl spaces and basements
  • The soundness of the surrounding landscape 

Buy enough home insurance



Lastly, you want to make sure to insure your new home for the long haul. It’s certain that your lender will require you to do this before closing, but it’s up to you to buy enough. You should have liability insurance to cover any damage or incidents that occur to someone on the property as well as insurance to cover the cost of damage to the property itself.

Get in touch with a local real estate agent today


Any questions about buying your first home in the Montclair area? Contact the Trish Lowe Group today for all your answers!




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At The Trish Lowe Group, we've helped our valued clients buy and sell their single most important purchase – their homes – across Chapel Hill and the Greater Triangle region. We have a proven track record of over $140 million in gross sales of real estate at The Preserve at Jordan Lake, Montclair, and Briar Chapel. We would be honored to work with you on your own real estate journey.