First-time Homebuyer Tips – 5 Essential Money Moves

Local Real Estate Expert John Skulick shares tips to help first-time homebuyers get prepared to purchase the right home based on their needs.


With mortgage rates low and home prices rising, now is the time to buy your first home. The following tips will help you get prepared to purchase the right home for you.

5 Essential Tips for First-Time Homebuyers

Buying your first home can be nerve-wracking, as it should be. You will be making what is probably your largest purchase thus far, so it makes sense to approach the event with caution. Fortunately, there are things you can do to make the buying process easier. By doing your homework now, you can be ready to take full advantage of any deals that you find.

5Look at your credit.

The first thing to do when you start thinking about buying a home is to look at your credit. Your credit score is the most important factor in whether you can get a mortgage. It also dictates what kind of rate you will get. Every percentage point adds up to big money over the life of a mortgage, so it pays to get the best rate you can.

If your credit is not great, it may be worth waiting to improve your credit score before you try to buy a home.

4Know what your cash flow looks like.

Since you are going to be approaching lenders and asking for a loan, you should be aware of what they are looking for. Examine your income and spending over a few months to see what you are doing with your money. Ideally, you will have a solid amount of income left over after all your bills and expenses.

The clearer you are on your finances, the easier it will be to seek out a loan. You will know that your finances are in order.

3Get organized.

Before you try to get a loan, get all of your documentation in order. You will need proof of income and your tax return. Most lenders you go to will want to see pay stubs from the past two pay periods, your tax returns, W-2s and bank statements.

2Find out how much house you can afford.

A lender will tell you exactly how much mortgage you can expect to receive—but it is better for you to figure out a general figure first before you approach lenders. You can use an online calculator to determine your debt-to-income ratio.

Most lenders expect your housing expenses to account for no more than 28% of your income.

1Come up with a down payment.

Having a down payment is one of the most important parts of purchasing your first home. Everyone’s ability to make a down payment differs. The idea is to gather as much money as you can. Remember, you may be able to get financial assistance and/or grants to help increase your down payment.

Get Your Ducks in a Row

Chances are you can buy a home. But before you do, you will need to get your ducks in a row. Follow the tips above to prepare before you start searching for your first home.

John Skulick Realtor
Local Expert Tip provided by El Segundo Realtor John Skulick

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