I was talking to my friend recently, and I asked if he and his girlfriend were thinking about buying a home soon. He said that he'd done a couple of home searches and there weren't any desirable properties in his budget. BUT, as you savvy real estate consumers know by now, since he was not searching on the MLS, he was missing a TON of awesome properties. I asked what his budget would be (estimated) and where he would want to live, and quickly found 22 properties that fit the bill. He was shocked and so excited that they may be able to get a starter home sooner than he thought. I outlined a few tips for him as a first time, young home buyer, that I'd love to share with you as well.
Finances: Keeping your financial position stable will increase the odds that you will quality for a loan and that the loan will get funded (no new credit cards, don't quit your job, no huge purchases, etc). Remember during tax season that buying a home qualifies you for numerous tax benefits.
Down Payment: Figuring out your down payment is critical. In general, down payments can be comprised of money you have saved OR money that has been gifted to you. Different loans have different down payment requirements, but all loans except for VA loans require some down payment.
Leave Lease: Will you be breaking a lease to move out into your new home? If so, what's the penalty for this? If your lease is up soon, consider waiting until it expires before moving out to avoid the penalty. It is nice to have a few weeks of "overlap" between the old home and new home, to move out leisurely and have time to do small upgrades in the new home while still having a place to live.
Get Loan: Consult with a mortgage agent to get pre-approved and set a budget. The lender will evaluate your debt to income ratio, credit score, job history, and more.
Realtor: Consult with a Realtor and get your search started. Remember, your first home is just that, your FIRST home. You can always upgrade later on and sell or rent out the first home you bought. Plus, when you buy your first home and live in it, you qualify for favorable, owner-occupied financing.
Bottom Line? There are many reasons why buying is an awesome financial decision at certain points in life, and there are also reasons why renting is sometimes a great decision. More on this later, but a Realtor can always sit down with you to discuss the pros and cons of each. My friend could not believe that he could feasibly afford to buy his first home in his mid-twenties to start to build equity and stop paying his landlord's mortgage. I think there are a ton of people out there like him that have not considered buying a home, but if they get informed, realize that it is doable for them! Have a fabulous day.