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5 Tried-and-True Tips for Buying Your First Home

Nov. 28, 2017
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Buying a home is a huge commitment, and deciding on a neighborhood is just the beginning.

If being a homeowner is one of your life goals, check out these tips.

1. Start saving for a down payment now

A first-time home buyer program might let you put as little as 3% down, but even that could require some saving. For example, a 5% down payment on a $300,000 home is $15,000.

Find out how much home you can afford, then learn how large a down payment you’ll need to make and start saving from there. Consider setting up an automatic savings plan and putting aside tax refunds to jump-start your account.

2. Budget for closing costs

In addition to budgeting for your down payment, you need to save up for closing costs, including property taxes, mortgage insurance, homeowners insurance, home inspections and title fees. The average home buyer pays between 2% and 5% of the loan amount in closing fees.

Do the math on closing expenses and figure them into your savings goal.

3. Hire the right agent

If it’s your first home, you’ll likely be using a real estate agent. Interview several to find the right one for you. Look for someone with a good track record for closing deals who knows the area well and can answer your questions.

4. Maximize the open house

You should always see a home in person. Open houses allow you to check out the neighborhood (and potential neighbors), assess the home’s actual condition and gauge the competition (i.e., other interested buyers). Don’t hesitate to ask questions, or even schedule another viewing, if you need more time.

5. Negotiate

Yes, you can and should negotiate on your first home, especially if you’re in a buyers’ market — it can result in major savings. The real estate agent can help you with this. As you’re touring the home, make a mental note of any major repairs you can ask the seller to cover. Find out if the seller will cover part of the closing costs, too.

» MORE: Join NerdWallet to learn about saving on your existing bills — such as internet or cable — so you can reach your down payment goal faster.

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