When it comes to buying your first home, knowledge is power. Purchasing a home is a huge financial responsibility, and you should be equipped with as much information about the process as you can to ensure you’re fully prepared when it comes time to make the big decision. We spoke with Joy Hilado, a Buyer Specialist with The Loken Group, to determine the top five things to know before buying a home.

1. Buy the house that you know you can afford

Be honest about what you can and cannot afford – if you spend too much money on your mortgage you may not be able to meet your daily obligations or save for the future. Some other things to take into account beyond the mortgage are the principal, interest, and taxes.

2. Save for your down payment

On closing day, be prepared to bring your down payment and any closing costs you owe, in addition to the earnest money deposit, option fees, inspection costs, and appraisal fees.

3. Know what programs exist for first-time home buyers

There are many first-time homebuyer programs and grants in place that offer financial help, and you may be eligible for various types of assistance. However, when choosing which type is best for you, it’s important to keep in mind that each loan type comes with a different set of qualifications and benefits. The FHA is especially helpful for first-time home buyers and those who may not have the best credit history. FHA loans typically come with competitive interest rates and smaller down payments than conventional loans. Conventional loans are ideal for borrowers with good credit and pose fewer hurdles than FHA or Veterans Affairs mortgages, which may take longer to process.

4. Avoid making any major purchases that involve using your credit

Be cautious of making any big purchases prior to buying a home, as it could severely impact your credit score and negate the original decision of your lender to loan you money. If a major purchase is unavoidable, be sure to talk to your loan officer first.

5. Use a trusted realtor

Using a trusted realtor that is a true expert in their field and has a thorough understanding of the process can make all the difference in your home buying experience. There’s a lot that goes into a real estate transaction and it’s the agents job to keep abreast of the ever changing market. Finding a realtor who is a skilled negotiator and is knowledgeable about their market area will ensure that your home buying process runs as smooth and efficiently as possible. Most importantly, do not hesitate to ask your agent for help! If you have any questions or would like to start your home search, contact The Loken Group at 281-861-4624.