First Time Home Buyer Tips to Compete in a Hot Market Story

There’s no denying the housing market has been on fire. According to the National Association of Realtors, the median U.S. home price increased 16% to just over $350,000 over the past year.

Here are ten tips for first-time home buyers to help navigate the process of buying a home.

1. Set Realistic Expectations

According to Victoria Cornell, you don’t have to find your forever home right off the bat. “Purchasing your first home is exciting and is a big life goal for so many.”

2. Don’t Fall Into the Trap of Being House Poor

Allocating a disproportionate amount of your total income to homeownership is known as being “house poor” and can negatively affect the rest of your budget.

3. Buy What You Can’t Change

One of the essential rules in real estate is “location, location, location.” While the location isn’t everything, it certainly falls under the category of something you can’t change about a house after you’ve bought it.

4. Understand the Hidden Costs of Homeownership

The true cost of homeownership is much higher than just the monthly mortgage payment. You are also responsible for things like property taxes, insurance, HOA dues, utilities, and more.

5. Get Pre-Approved Before Making an Offer

In today’s hot real estate market, being pre-approved for a mortgage is almost a prerequisite for submitting an offer. Speaking with a lender or mortgage broker and providing your financial information will also give you a good idea of how much you can afford so that you can narrow your home search.

6. Don’t Rush the Home Buying Process

Mary Elizabeth, a personal finance expert who bought her first house at age 21, recommends separating your must-have features from those that are not as important.

7. Inflation Can Be Your Friend

With inflation surging over 7% to levels not seen since 1982, almost everything is more expensive than a year ago. However, with interest rates still near historic lows, you can borrow money now and effectively pay it back with cheaper dollars in the future.

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