1. Assess Your Financial Health

• Pay off your debts. Use extra cash to eliminate credit-card and consumer debt—even if that means you can put down less on your future home.


• Clean up your credit. The better your credit score, the better your chances of receiving a favorable interest rate. Visit www.annualcreditreport.com to access your annual credit report online for free.


• Determine what you can afford to borrow. Make sure you have enough to cover fees and closing costs, which may include the appraisal, loan, attorney's fees and inspection fees. Go online and use a home affordability calculator.


• Consider your sources for your first-time down payment. Will you need to save more or tap into other resources, like family?

2. Clarify Your Needs

• Pay off your debts. Use extra cash to eliminate credit-card and consumer debt—even if that means you can put down less on your future home.


• Know your needs versus wants. Organize your search with a "must have" list of absolute necessities, like school district, size and architecture, and so on. Additionally, have a “would like” list of items that would be nice, but not necessary, such as air conditioning, hardwood flooring, deck, views or other amenities.


• Determine the length of time you will be in the home. You’ll want to be in the home long enough for the value to have appreciated to cover the cost of purchasing and selling the home. This typically could be four to five years.

3. Shop For A Mortgage

• Consider lending rates and whether a fixed- or adjustable-rate mortgage is right for you.


• Live within your means. Determine how large a mortgage you can carry and buy only the home you can afford. This strategy is a prudent way to securely accumulate wealth.

4. Seek Assistance Of Knowledgeable Professionals

• Pay off your debts. Use extra cash to eliminate credit-card and consumer debt—even if that means you can put down less on your future home.


• Interview experienced realtors. They can assist with comparative market analysis and other important considerations.


• Work with a financial advisor. A financial advisor can help you determine how a home purchase fits into your overall financial picture.


• Engage a lawyer before you sign any documents that you don’t understand or feel absolutely comfortable with.


• Use a home inspector before making an offer.

5. Make An Informed Offer

• Get pre-approval. Sellers are more likely to take you seriously if you are pre-qualified. Furthermore, pre-qualification will let you know how much your new home will really cost in monthly payments.


• Conduct comparative market analysis before making an offer to get a better idea of the home’s worth.


• Know exactly what you can afford based on your financial resources and stick with your budget.


• Keep in mind that it’s a negotiation process and you have the right to counteroffer.

Buying a first-time home can be intimidating if you are uncertain of the process. Educate yourself and then you can enjoy the process as a confident and prepared consumer.