What First-Time Homebuyers Gain. If your down payment is less than 20%, you may be eligible for state programs, tax breaks, and federally backed loans. If you have previously purchased a property but your spouse has not, you may still qualify as a first-time homebuyer. Additionally, your previous home purchase may qualify you for the first-time home buyer’s tax credit.

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Questions to ask before buying a first house. Determine your long-term goals and how homeownership can help you achieve them. Maybe you’re just attempting to turn your “squandered” rent payments into something tangible, like equity. Maybe you see homeownership as a sign of independence and enjoy the idea of owning your home. Buying a property may also be a great investment in addition to simplifying your long-term home ownership goals.

What is your financial situation? Before you spend hours searching the internet or fall in love with your dream home, make a comprehensive financial assessment. The purchase and maintenance of a property must be budgeted. This audit will tell you if you are ready to take this big step or if you need to prepare further. Consider buying a home as a first-time buyer only after you’ve saved three to six months’ worth of living expenses. As a first-time buyer, you will have considerable upfront fees, such as a down payment and closing costs. You will need money set aside for both these bills and any possible emergencies. Lenders will also require it.

Home buyers: here is a Mortgage Qualifier Calculator. 

One of the most challenging chores is keeping your funds accessible, protected, and earning enough to keep up with inflation. If you have one to three years to attain your goal, you should purchase a certificate of deposit (CD). It won’t make you rich, but it will prevent you from potentially losing money. Investing in a short-term bond or fixed-income portfolio provides similar benefits while protecting you from the turmoil of the economy.

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Keep six months to a year’s worth of cash liquid. A high-yield savings account may be the best option. Make sure it is insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. Audit your spending. Keeping track of your monthly expenditures is essential. This will help you budget based on how much you can save for a down payment as a first-time buyer. Prepare a detailed budget that accounts for every anticipated expense, including utilities, car payments, children’s activities and entertainment, retirement, and regular savings. Always seek advice. A home loan requires solid credit, a timely bill-payment record, and a maximum debt-to-income ratio of 43 percent. Generally, lenders aim to keep housing costs, including principal, interest, taxes, and homeowners’ insurance, at roughly 30% of a borrower’s monthly gross income.

What kind of home can a first-time buyer afford? You qualify for a more expensive home than you may have anticipated. However, a bank’s approval does not mean you should go for it. Many first-time homebuyers find themselves “house broke” and unable to pay for basic necessities. Affordability should be determined by the total cost of ownership, not just the monthly payment. Consider the area’s property taxes, insurance, maintenance and improvement fees, and closing costs.

How much mortgage do you qualify for? Before you go house hunting, figure out how much you can borrow. You might think you can afford a $300,000 home, but a lender may only qualify you for $200,000 due to other debt, monthly income, and employment history. Many real estate agents will not work with clients who have not set their budget. Be pre-approved for a loan before placing an offer on a house. Many sellers will not consider an offer without a pre-approval letter from your lender. You should obtain a preapproval by submitting a mortgage application and completing the required documentation. You can also compare mortgage rates and fees by using a

mortgage calculator.

Who will help you find and buy a home? An Illinois Star REALTOR® will help you identify homes that meet your needs and fit within your budget. Once you’ve chosen a home, these professionals can help you make an offer, assist in getting a loan, and finish the paperwork. An experienced and qualified Illinois Star REALTOR® can help you avoid serious problems. Please remember, Illinois Star REALTORS® commissions are paid by the sellers, and their services are usually free to all homebuyers.

What type of property best meets your needs as a first-time buyer? Depending on your homeownership goals and needs, you must select the right type of property. While buying a fixer-upper can save you money in many ways, be aware that the time and money required to turn it into your dream home may be more than you anticipated.

Search the MLS for Condos for sale here.

What features do you want in your home as a first-time buyer? In addition to allowing for some wiggle room, you’re making what may be the most significant purchase of your life, and you deserve to have it match your expectations. Remember, size and location should always come first. Next, focus on details like bathroom layout and a kitchen with long-lasting appliances. Illinois Star, Ltd. REALTORS® can be your best source of information. Call us today at (847) 647-4000.

Always work with a REALTOR® who has your best interests at heart.