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Eight Essential Tips for First Time Home Buyers

Writer's picture: Patriot Real PropertiesPatriot Real Properties
  1. Assess Your Debt:

• Lenders evaluate your ability to manage existing debt alongside your

new mortgage payment. A crucial metric is your debt-to-income (DTI)

ratio. Prioritize paying down credit balances (keep utilization below 30%)

and consider managing other loans including student debt. Aim for a DTI

ratio below 36% (including your mortgage payment). A maximum DTI of

43% is typically required for a qualified mortgage.

• A higher credit score translates to a lower interest rate on your

mortgage.

• Regularly monitor your credit score and address any errors promptly.


2. Determine Your Housing Budget:

• Calculate your budget based on your income, expenses, and savings.

• Consider factors like property taxes, insurance, and maintenance costs

when estimating your monthly housing expenses.


3. Save for Your Down Payment and Earnest Money Deposit:

• Start saving early for your down payment (typically 3% to 20% of the

home price).

• The earnest money deposit demonstrates your commitment to the

purchase and is usually around 1% to 3% of the home price.


4. Be Aware of Other First-Time Buying Costs:

• Beyond the down payment, budget for closing costs (e.g., appraisal fees,

title insurance, attorney fees).

• Factor in moving expenses, home inspections, and potential repairs.


5. Get Your Mortgage Pre-approval Squared Away:

• Obtain a pre-approval letter from a lender before house hunting.

• Pre-approval shows sellers that you’re a serious buyer and helps you set

a realistic budget.


6. Find a Top Local Buyer’s Agent:

• Work with an experienced real estate agent who understands your local

market.

• An agent can guide you through the process, negotiate on your behalf,

and provide valuable insights.


7. Seek Out Neighborhoods You Love:

• Research neighborhoods based on your preferences (schools, amenities,

safety, commute).

• Visit potential areas to get a feel for the community and assess whether

it aligns with your lifestyle.


Remember, thorough preparation and informed decision-making will empower you as a

first-time homebuyer. Best of luck on your exciting journey into homeownership!



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