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The thought of owning a home can be scary the first time around. You hear “I told you so” stories about buyers making mistakes and being in debt. That someone didn’t know what to do when, have regrets or made the wrong decision because of lack of information.

Your first home purchase can be the most terrifying because you don’t know what you don’t know. Plus it’s the most important purchase because it will set up your financial options for the future. Buy right the first time and you get a ton of equity for the next home. Mess up and you’ll be one of the horror stories!

With our simple tips, you won’t mess up. Follow our advice below and you’ll be on your way to being a happy first-time homeowner:

Honestly Ask the #1 Question

Can I afford to buy a home?” is the number one question we get from people who are worried about “messing up” their first home purchase. If you can spend the same amount on a mortgage payment as on rent, then you should definitely be a homeowner. That way you’re also receiving the benefits of equity in a home and tax write offs.

Another rule of thumb to remember is that you can spend around 35% of your monthly income on housing and that would be just fine according to financial experts.

Don’t Wait for Someday  

Don’t fall into the trap of waiting till everything is “perfect” or that you need a certain amount of money before you buy a home. Nothing is ever perfect and that someday may never come!

Postponing your plans doesn’t always make financial sense even if you think you’re being responsible. In fact, this year’s outlook should encourage you not to stay put as a renter.

  • First, lenders are more willing to work with prospective buyers since restrictions on mortgages have eased up. That means you’re more likely to buy a home today with less money down than a few months ago. And, some buyers are more likely to qualify for a mortgage in 2015 than they were in 2014.
  • Second, interest rates are still low, around 4%, which can save you thousands of dollars over the lifetime of your loan.
  • Buying a home can be affordable and makes more financial sense than renting in today’s market.

Get with the Assistance Programs

There are some really great first-time home buyer programs out there and they are only able to be used once—the first time you buy a home. They are all based on your income (the lower your income, the more help you receive), and each city or county where you are buying has their own options.

This assistance, whether it’s through a first-time homebuyer loan or down payment assistance program, really makes your first home much more affordable! Most first-time buyers qualify for at least one option out there, and are based on their specific income, where they want to live, etc.

Don’t Be Afraid to Get Help

Meet with a few lenders to see what mortgage opportunities are available right now. It’s totally free to shop around but do it in person rather than just rely on what you find on the internet. Don’t disqualify yourself before you even get out the door!

Help is out there, so seek it out. Remember, you’re not the first first-time buyer. Don’t be afraid to talk to experts or be too embarrassed to ask questions. It doesn’t cost any money to get educated about the local market, current mortgages, and any assistance programs. We’re here to help and guide you from the start.

Don’t Forget Future Needs

Before buying a home envision what your life will be like in the coming years and if this home will meet your changing needs. It makes financial sense to live in a home for at least 5 years so it’s important you buy for what your life plan looks like over that time period.

Most of us go through life cycles, first being recent graduates with new careers, then getting married and having kids, then hitting your peak earning years, then becoming empty nesters and then to retirement.

What part of life are you in? How long do you want to be in this first home? Is it for a few years until you have kids, or is this the home you are going to send your kids to college in?  Make that decision first and the rest of the decisions will be much easier from there.

Don’t Use Your Home Like an ATM

Remember that buying a home is a long-term investment. It’s important to be a responsible homeowner from the get-go and safeguard your future financial security when it comes to your home. Build equity in your home and don’t use it to finance “stuff” like cars that depreciate in value. You don’t want to create a financial hole with your home!

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