10 Tips for First Time Homebuyers

You’ve been renting an apartment or house, but now you’re considering buying your first home in Maine. You may feel excited and overwhelmed at the same time. The homebuying process can be very confusing and stressful. 

Lucky for you, KFS Mortgage Company is here to offer assistance and resources to help you.  

First of all, if you have not owned a home within the last three years, you will qualify as a first-time homebuyer in Maine. Learn more about our first-time homebuyers programs

Secondly, contact us if you have questions or want to talk to one of our friendly mortgage professionals.  

Okay, let’s get started! Here are 10 tips for first-time homebuyers like you!

1. Start Saving Now

Before you are ready to buy your first home, here are some of the costs that you need to plan for:

  • Down payment
  • Closing costs
  • Moving expenses

You can start by decreasing your overall debts. Reducing your debts makes it easier for you to secure a mortgage. Paying off your debt may feel impossible, especially if you are already on a tight budget, but it is possible. 

Different debt reduction methods or debt consolidation programs can help you get into a better financial position. Use our debt worksheet to get started. 

2. Check and Strengthen Your Creditworthiness 

A credit score tells lenders about your creditworthiness - how likely you are to pay back a loan based on your credit history. 

You're entitled to one free copy of your credit report every 12 months from each nationwide credit reporting company. (Checking your credit will not affect your credit score.)  

Your credit score is beneficial for homebuyers. Typically, the higher your credit score, the lower your mortgage rate. How to improve your credit score? By making payments on time, not taking on new debt, and paying down credit card debt. Learn more about strengthening your credit score

3. Determine your Homebuying Budget, and Stick to it

Establishing your homebuying budget will then determine many other factors involved in your decision—the house size, neighborhood, town, type of mortgage, and more. 

Figure out how much you can safely spend on a house before starting to shop. The sale price of any home is not the only cost consideration—there will be approximate monthly mortgage payments, real estate taxes, and utility costs. 

In the case of a condominium or townhouse community, common area charges and/or homeowner association (HOA) fees must be included. Your real estate agent can review all the typical expenses and help you formulate a comfortable working budget.

Utilize our mortgage calculators and frequently asked questions to learn more about creating a homebuying budget. 

4. Make a List of “Must-haves” and “Nice to Haves”

Deciding on your priorities for a home is very important. Most people can’t afford everything that they want. So it’s essential to ask yourself a few basic questions before you start searching for your first home. For example:

  • Do you prefer urban, suburban, or rural communities?
  • Do you need to be close to public transportation, the highway, or an airport? 
  • Is the public school system important to you?  
  • Are you willing to purchase a fixer-upper? If so, do you have the funds to invest in renovations, or will you tackle those yourself? 
  • Will you need a big yard, or are you okay with sacrificing yard space for your living quarters? 

5. Apply for a Mortgage Pre-Approval

We suggest that you get pre-approved before you start to shop for a home. Being pre-approved means a lender has approved you for a specific loan amount.

Sellers often want buyers to have a pre-approval letter in hand. By being pre-approved, you will know exactly how much home you can afford, which will help you select which homes to view. It will also allow you to make a more substantial offer. Lastly, and most importantly, being pre-approved will make you feel more confident in your decisions. 

6. Research First-Time Homebuyer Assistance Programs for Maine Residents 

First-time homebuyers may be eligible for mortgage loan programs with low fixed interest rates and little to no down payment requirement.

Maine offers a number of first-time homebuyer assistance programs, including:

  • MaineHousing Loans
  • MaineHousing’s First Home Loan Program
  • Salute ME and Salute Home Again (for veterans)
  • USDA Rural Development Guaranteed

Learn more about first-time homebuyers programs in Maine.

7. Find a Real Estate Agent to Represent You

A knowledgeable real estate agent will scour the market for homes that meet your needs, guide you through the negotiation and closing process, help you with your paperwork, answer your questions, or find someone who can help you with specialty obstacles. 

When speaking with potential agents, ask about their experience helping first-time homebuyers in your market and how they plan to help you find a home.

8. Understand Your Loan Options

There are many different loan options out there. Each one has a different structure and requirement. The type of loan you choose will determine your down payment amount, the type of home you can buy, and more. 

It’s more helpful to talk to a mortgage loan officer than to spend countless hours searching for answers on Google. So instead, take advantage of our experience and expertise. We’ll answer all your questions, compare each option's pros and cons, and ensure you get the right mortgage. Contact us with your questions.

9. Don’t Skip the Home Inspection

A home inspection is a thorough but non-invasive evaluation of the property’s overall condition. The American Society of Home Inspectors (ASHI) defines it as “an objective visual examination of the physical structure and systems of a house, from the roof to the foundation.” 

The primary objective here is to assess the condition of the property. Home inspections can provide the homebuyer with valuable insights. An inspection can illuminate potential problems in the home. 

Also, an inspector can explain the different systems within the home and how they work. They can also show you the location of vital features, such as cutoff valves.

10. Save Physical Copies Of Your Paperwork 

Once you get moving on a house purchase, don’t forget about the paperwork. Yes, cloud-based storage is the obvious choice for keeping tabs on documents. Still, you should keep a physical copy of your mortgage statements, deed, Closing Disclosure, and other documents in a locked, fireproof file cabinet. 

Let anyone else named on your loan know where the documents are and how to access them in the event of an emergency.

Buying a home for the first time doesn’t have to be overwhelming. Wherever you land, remember that it’s you and your loved ones who bring a home to life. 

Our experienced mortgage team will help guide you through the entire process from start to finish and help you identify the best mortgage option for you. 

Do you still have questions? We are here to help. To schedule a free no-obligation consultation, contact KFS Mortgage Company today.