7 Tips for How to Buy Your First Home

Purchasing your first home is a lot like running a marathon. It’s an extremely exciting and hugely rewarding journey that requires preparation, perspiration and perseverance. From saving for a down payment to choosing the right mortgage, the quest for homeownership is a major commitment that will necessitate your full attention. The more effort you put into your preliminary training and building up your endurance, the smoother and less stressful your trek towards the finish line will be. Whether you’re just starting to think about how to buy your first home or you’re already in the midst of your initial search, these seven tips can help get you on the right foot as you embark upon your path towards homeownership:

1. Shape up & save up!

One of the most important steps in buying your first home is saving money—for both upfront costs and ongoing expenses. These expenses include the down payment, closing costs, and moving expenses. Before you dive into house hunting, it’s important to create a savings plan that takes all of these costs into consideration.

The down payment is often the largest expense and can range from 3% to 20% of the home’s price, depending on the type of mortgage you qualify for. Putting down a larger down payment can potentially help you save on things like mortgage insurance and reduce your monthly costs.

Closing costs, meanwhile, typically range from 3% to 5% of the loan amount. Closing costs cover expenses such as title insurance, appraisals, inspections, and more. In some cases, there may be special offers available that can help with these costs, or you may be able to negotiate for the seller to cover a portion of them.

2. Determine your budget & timeline

Once you’ve established a savings strategy and before you start browsing homes, determining how much home you can realistically afford is a good next step. The last thing you want is to fall in love with a home that’s out of your financial reach. Use an affordability calculator to assess your financial situation, including your income, debts, and credit score. A good rule of thumb is to aim for your monthly mortgage payment to be no more than 28% of your gross monthly income.

It’s important to remember that your mortgage payment is just one part of the overall cost of homeownership. You’ll also need to factor in additional expenses such as property taxes, homeowners’ insurance, utilities, and general maintenance. All of these costs add up and will impact your budget, so it’s essential to get a clear, complete picture of your financial situation before you begin your home search.

Determining your timeline is also important. If you’re looking to move sooner rather than later, a quick move-in home might be a good option for you to pursue.* These homes are perfect for those with specific timelines, with the option to close in as little as 90, 60, or even 30 days. Our skilled in-house design team has thoughtfully chosen fixtures and finishes for these homes to make sure every abode is as stylish as it is practical. Your dream home could be ready and waiting for you!

3. Review & improve your credit rating

Your credit score plays a crucial role in your ability to secure a mortgage and the interest rate you’ll be offered. A higher credit score can significantly lower your mortgage rate, which can save you thousands of dollars over the life of your loan. Before applying for a mortgage, review your credit report for errors, and take steps to improve your score if necessary. If you find any discrepancies, make sure to resolve them with the credit bureaus to avoid any negative impact on your mortgage application.

It’s also important to maintain a good payment history by paying bills on time and reducing credit card debt. A good rule of thumb is to keep your credit utilization ratio (the amount of credit you’re using compared to your total available credit) below 30%. Additionally, avoid opening any new credit accounts or closing older credit accounts before applying for a mortgage, as this can temporarily lower your credit score. By focusing on improving your credit score, you can increase your chances of securing a better mortgage rate, which can lower your monthly payments and save you money in the long run.

4. Explore mortgage options & the preapproval process

There are several types of mortgages available, each designed to suit different financial situations. It’s important to explore your options and choose the one that best fits your needs. Common mortgage options include:

• Conventional Mortgages: These are the most common and typically require a down payment of 3% or more.
• FHA Loans: Ideal for buyers with lower credit scores, FHA loans allow down payments as low as 3.5%.
• VA Loans: Available for veterans and active duty military members, these loans often don’t require a down payment.
• USDA Loans: For buyers in rural areas, USDA loans may also offer no down payment.

In addition to choosing the right mortgage type, consider the loan term (15 years versus 30 years) and whether a fixed-rate or adjustable-rate mortgage (ARM) makes more sense for your situation. Getting preapproved for a mortgage is an essential step in the process. A preapproval letter shows sellers that you are a serious buyer and helps you understand how much you can afford.

Be sure to explore Richmond American’s affiliate lender HomeAmerican Mortgage Corporation when looking at mortgage companies. HomeAmerican has been delivering customized lending solutions since 1983. With over 40 years of experience, they provide the stability and expertise borrowers are looking for in today’s market. As a full-service lender, they offer a broad variety of loan options directly—no brokers involved. This means more choices and more competitive rates for you!

5. Pick the floor plan best suited for your lifestyle

Determining the type of floor plan you’ll need to accommodate your given work-life situation is a pivotal part of the homebuying process. The number of stories, amount of square footage, garage size and more you’re looking for are all factors to consider. Also, if you need to have an RV garage, a home office or a guest suite, be sure to make note of that when selecting a floor plan.

Our expert design team has created inviting homes filled with thoughtful features that enhance every aspect of living, working, and entertaining. From carefully curated layouts to cutting-edge amenities, we’ve paid attention to every detail to ensure comfort, convenience, and ease.

Whether you’re spending quality time with family, hosting friends, or navigating daily life, our homes are designed to elevate every moment. We’re proud to offer spaces that go beyond just functionality—they’re Lifestyle Approved!

6. Select a suitable neighborhood

As you explore different floor plans, be sure to consider the lifestyle of the surrounding area. Things like nearby trails, schools, recreation options, and access to shopping and dining can all play a role in your choice of neighborhood. After all, community matters!

7. Work with a New Home Specialist

A great way to simplify your home search is to work with a New Home Specialist. At Richmond American, these experts can help guide you through every step of the homebuying process. They are well-versed in different communities, home collections, floor plans, and available listings, which allows them to provide personalized recommendations based on your needs and preferences.

Unlike traditional real estate agents who may specialize in a specific neighborhood, New Home Specialists have a comprehensive understanding of multiple communities, amenities, and the local market, which helps them provide tailored advice that saves you time and effort. Their knowledge of local areas and available properties ensures that you won’t waste time looking at homes that aren’t a good fit. Additionally, New Home Specialists can offer insights into important factors such as local schools, transportation, and nearby amenities, which can be a big help in making an informed decision.