First-Time Buyers: Everything You Need to Buy Your First Home

What are your reasons for wanting to buy your first home? For many, the example is quite simple. 

In a 2024 survey by the National Association of REALTORS®, 22% of homebuyers cited a “desire to own a home of their own” as the primary reason for buying. For first-time buyers, this number skyrocketed to 64%. 

Regardless of your reasons, homeownership tends to signify things like: 

• Personal independence
• A safe place for you and your family
• Realization of the American dream

For first-time buyers, the homebuying and mortgage process can seem like a lot. But once you get started, the process moves fast – especially with the right team in place. 

Below, we’ll talk about the benefits of homeownership and provide a step-by-step guide to buying your first home. Let’s get into it! 

Benefits of Homeownership

As stated above, homeownership can signify your independence and provide a safe space for you and your family. But there are financial benefits as well. 

Buying your home and paying a mortgage can improve your credit score and credit worthiness. This will help you qualify for other types of loans, like auto loans and credit cards, later. 

And once you own your home and start paying your mortgage, you start building equity. Your equity is the difference between your home’s value and the balance on your mortgage. 

So, if your home’s value is $350,000, and you have a balance of $250,000 on your mortgage, you have $100,000 in equity. 

You can use this equity to apply for a home equity loan or home equity line of credit (HELOC). These loans can help you complete home renovations, combine high-interest debt and much more.

Step-by-step: How to Buy Your First Home

The steps below will look like a lot if you’re unfamiliar with the process. But, like we said before, it’s quick and easy when you work with the right people. 

Shop Casually

Before you dive into the formal shopping process or apply for a mortgage, you can start by shopping around online. Get a sense of your likes, your dislikes, and prices for homes in your area. 

This will help you narrow your search down once you start working with a realtor. 

Meet with Your Mortgage Lender

A mortgage lender can run the numbers to help determine your budget. At this point, start the mortgage application process and get prequalified. 

If you get pre-approved, you may use the letter to assure real estate agents and sellers you are a qualified buyer. Many realtors even require pre-approval before they will work with you. 

There are several factors to consider when looking for a mortgage lender: 

• Rates: you could look for a financial institution with the best rates.
• Reputation: check online reviews or ask family and friends for recommendations.
• Familiarity: if you like your financial institution, you may contact them to get the process started as well.

Mortgage lenders also have a lot of real estate contacts, so they can refer you to a realtor. 

Meet with a Realtor

Once you’re pre-approved for a mortgage, you can connect with a realtor and start shopping for homes. A licensed realtor can: 

• Find homes within your budget that meet your wants and needs.
• Help you navigate the homebuying process.
• Negotiate better prices and purchase conditions on your behalf.

Most realtors will require you to sign a buyer’s agreement that requires you to work with them throughout the process. So, make sure they are a good fit before signing. 

Explore First-Time Buyer Programs and Tax Credits

There are several programs out there that can help you buy your first home. These programs may offer down payment assistance, closing cost assistance and more. These programs will vary depending on where you live, so search for these in your area. 

There aren’t many tax credits available for first-time buyers, but some cities may offer tax benefits like abatements to get you started. An abatement is a reduced tax rate for a limited time for people who build new homes in select cities.

Your mortgage lender and realtor will be able to help you find these first-time buyer programs and tax credits. 

Start Touring Homes

With your realtor’s help, find some homes you love and start scheduling showings. As you tour homes, you’ll begin to narrow down your search. 

Start Negotiations

Once you find a home you love, it’s time to start negotiating. Your pre-approval letter and your realtor will help you get the best price. Once you have an agreement on price, it’ll be time to enter into a purchase agreement. 

Order an Inspection

Once you have a purchase agreement in place, you’ll want to have the home inspected. This will help ensure you don’t have any costly repairs to make after you move in. 

You may request that the seller make necessary repairs before finalizing the purchase. 

Finalize Your Mortgage and Close on Your New Home

Once all the details are in place, it’s time to sign the final paperwork and finalize your mortgage. Closing costs charged by the mortgage lender will be due at this time.  

Move In

That’s it… you bought your very first home. Your purchase agreement will determine the day that you take ownership of your home. That’s the day you can move in and enjoy the next big step in your life. 

How to Apply for a Mortgage

Applying for a mortgage is a lot like applying for other loans. You can shop for the best rates and terms online or contact your preferred financial institution. In many cases, you can even start and work through the application online. 

When applying, you may need some of or all the following materials: 

• Your personal information and identification.
• Employment and income details.
• A list of your assets and liabilities, like bank statements, or other long-term debts, like auto loans or student loans.
• Details about the home you are buying.
• Recent tax returns.
• Retirement and investment accounts.

During the application process, your lender will also run a credit check on your score and history. 

Frequently Asked Questions from First-Time Buyers

Find Your First Home

Homeownership may be closer to reality than you realize. At Veridian Credit Union, we can connect you with the right resources and the right mortgage to get you on the path to homeownership. 

Click below to see how we can help or to schedule an appointment with a mortgage advisor. 

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