Community January 26, 2021

A Guide for First-Time Home Buyers

Buying a home is a huge investment. You want to ensure that you’re making the right choice for yourself and your finances. If you are thinking about buying your first home, there are some things to consider.


Prepare Your Finances

Owning a house is much more expensive than renting, as you have to pay for upkeep and maintenance. As a result, you need to ensure that you are in a good financial position before purchasing a home.

Try to improve your credit score by clearing your debts and paying bills on time. A higher credit score can help you secure a mortgage and lower your interest rates. 

You will need to save up money for a few reasons. Though you are making a monthly mortgage payment, there are some large costs that come with owning a home. 

The first thing to save up for is an emergency fund. When you are responsible for the maintenance of your home, sudden large costs can arise. While this is not an immediate expense, it is essential that you have some money saved up for emergencies.

The second thing is your down payment. We recommend putting down an upfront payment of 20 percent or more. 

This way, you won’t have to pay for private mortgage insurance, which protects the lender against the possibility you might foreclose. PMI typically costs one percent of the total loan each year, adding up to thousands over the years. 


Before looking at houses, you need to determine your monthly budget. Figure out how much you spend in a month currently compared to your net pay. 

Factor in your probable housing expenses, including property taxes and homeowner’s insurance. You do not want your housing costs to be more than a quarter of your net income. Make sure to leave room for extra expenses like repairs and maintenance.

Find a Mortgage Lender

While it may be tempting to go with the cheapest mortgage lender available, these companies tend to have high-interest rates and adverse long-term requirements. Some specific types of mortgages to avoid are:

  • Adjustable-rate mortgages, where the lender transfers the risk of rising interest rates to you.
  • FHA loans, which typically require a mortgage insurance premium.
  • VA loans, as you could end up owing more than your home’s market value, and the VA tends to have high fees.

We suggest getting a 15-year, fixed-rate conventional mortgage with a 20 percent down payment. While you may wish to go with the 30-year plan, you will end up paying thousands of dollars more in the long run. 

With a 15-year plan, you can pay off your home in half the time, and you will have lower interest rates. Additionally, fixed-rate plans ensure that you do not have to worry about rising interest rates. 

Finding Your Home

The first thing to do before shopping for your new home is to get preapproved for your loans. This shows sellers that you are a serious buyer with the ability to make a purchase. For those in competitive markets, it can help you stand out from other buyers.

Next, look for a home in your price range. Don’t ‘window shop’ more expensive homes, as there is a possibility you’ll fall in love with a house you cannot afford. Find a home that fits the budget you made and costs less than 25 percent of your net income a month. 

If you find a home you like, research the neighborhood and visit its open house. See what the area looks like and figure out if you can see yourself living there. Remember that buying a home is a long-term commitment, so if you are not satisfied with the location or another unchangeable aspect of the house, it may not be the one for you. 


First-time home buyers typically have a lot of questions about closing. Closing usually takes about a month and a half, though it depends upon the individual sale.

Additionally, you’ll want to save up for the closing cost, which is about three or four percent of the purchase price. Closing costs are the fees and expenses to finalize a mortgage. 

Final Thoughts

Buying a home is a huge commitment, and it can be intimidating for first-time buyers. However, with a knowledgeable Windermere agent, you can hit the ground running, and you’ll be living in your dream home in no time.

If you are a first-time buyer looking to move to  Camano Island or Stanwood WA, contact us at 360-387-HOME or get in touch with one of our agents on our website. We can help you easily navigate the process of purchasing your first home, and we’ll find you the perfect home to fit your budget and vision.