You’ve decided you want to purchase your first home, but you don’t even know where to start, how much to save, or what you really want and need. Below we have provided some killer tips to make the process go a little smoother.


Pay off any credit cards and loans you may have, get rid of any collections, and save an emergency fund. Your emergency fund should cover 3-6 months of expenses, just so you have something to fall back on when you need it. Only open new accounts if absolutely necessary. What this will do is raise your credit, and decrease your debt to income ratio (DTI). When you go to get prequalified for a home, they take a look at all of this to determine how much house you can afford and how much of a loan you’ll be able to borrow.


You want to save a down payment. You must be thinking “but how much do I save?” First of all, you don’t have to save 20%. Of course, if you would prefer this way, then go for it, but it isn’t a requirement. Generally, you want to do some research based on your income and how much debt you have, and determine what price range you want to aim for. Then save about 3.5%-5% for the down payment, 3.5% for closing costs, and a little extra for a rainy day, so about 10% total. Since you’re a first time homebuyer, your realtor will probably get you some down payment assistance from the government, and may even negotiate with the seller to pay some of the closing costs, so saving around this amount will put you at a good spot.


This is a prerequisite before you start to seriously look for your potential home, because it will determine what homes are worth your time to look at and it tells sellers that you’re ready, so if you get into a bid war with other buyers, it will carry more weight. You should also get prequalified because it will save you time when you find your dream home because it will be less paperwork, and it will help you have a general idea of what you’ll have to pay in other expenses that will come along with homeownership.


You may be thinking do I really need a real estate agent?? What if we told you that it won’t cost you anything, and you’ll have an expert on your side that knows the ins and outs of the market and can take your wants and needs to match you with the right home? Sounds like a no-brainer to me! Real estate agents not only know the right people and have access to an exclusive database of homes, but they can walk you through the process, negotiate on your behalf, and overall just make the process go smoothly. When it comes to home buying, an agent is your best investment, and we have some pretty awesome and experienced agents here at Premium Properties!


Open houses will give you a solid idea of what you want and need, without the pressure of rushing to buy a house. Attending these can happen way before you’re ready, but also go into it with a purpose. Get a good feel for different neighborhoods, ask the realtor questions, walk through the whole house to take in everything, and make mental notes of what you like and dislike. You may even find the perfect real estate agent along the way!


Really, really know your budget and stick to it. We know you want to stretch your expenses to afford that home on an acre lot with the 5 bedrooms and marble island, but stick within your means to know what you can handle. A general rule of thumb is that your mortgage shouldn’t exceed 28% of your monthly income, so take some time to sit down and map out what all of your income streams bring in, what your debt to income ratio is, and how much more you can take as a monthly payment. In your period of saving money, make some sacrifices: don’t eat out as much, decrease your trips to the mall, and see what monthly subscriptions you can cut. All of this will be worth it in the end when you finally move into your beautiful new home!