First-time buyers often dive into the market feeling excited and focused on achieving their goals. There are a lot of pitfalls along the way, but the right real estate agent can guide them through the whole process. One reason why Homesale Realty agents are so effective is knowing how to aid these buyers.

How can you help first-time buyers succeed? The fact is, the earlier they get started in their process, the less likely they are to have problems. Managing their expectations is important if they aren't fully prepared to buy. Once they start looking, it's a whole new phase of the journey—one where you'll need to be informed so they always know what's coming next.

Let's take a closer look at some challenges faced by first-time buyers:

1. Low Credit Score When Looking for a Mortgage Loan
   A person's credit score is a numerical representation of the risk they represent to a lender. It's based on their history of credit usage and bill payments. When a couple buys a house, both members' credit scores matter. A few points on a credit score can make a significant difference in mortgage APR. To raise credit scores, buyers should focus on paying down debt and avoid taking on new debt.
   
   
2. Not Saving for a Down Payment for Long Enough
   A down payment is a cash amount a buyer applies to the home's purchase price before a financing package kicks in. Traditionally, the down payment was 20% or even higher. Although having less won't usually stop a buyer from closing an agreement, more is better—because it means less interest to pay. This is another area where saving up money over a period of months is the only way forward.
   
   
3. Going Directly to Big Banks for a Home Loan
   Big banks and other conventional lenders aren't the only options when it comes to buying a home. There are many first-time homebuyer programs that should always be explored first. These can lead to a lower interest rate and down payment. Such programs usually have extra steps in the application, but they are worth it because they put homeownership within reach for those who might not otherwise qualify.
   
   
4. Not Defining Top Priorities for a New Home
   As a general rule, everyone who will be living in a home should develop a list of 2-3 "must-haves." This accelerates the process of finding the right home because those that clearly don't qualify can be off the list fast. This becomes a bit more challenging in multi-generational homes. Still, it's better for everyone to feel included in the decision from the start—otherwise, disagreements can arise throughout.
   
   
5. Not Getting Pre-Approved for a Mortgage
   Pre-approval happens when a lender reviews a buyer's finances in detail and puts together a financing package they can then use within a limited window of time, usually between 30 and 60 days. Having a pre-approval means buyers can bid on a home right away. Plus, they will have much better insight into which homes will be affordable for them in the long run.
   
   
6. Not Setting a Household Budget
   Personal finance looms large for anyone who's buying a first home. After pre-approval, it's vital to set a household budget based on the employment and projected financial picture of everybody living in the house. This works best with clear, accurate inputs that reflect the actual cost of homeownership. For example, many people are shocked to learn how much heating and cooling a house can cost.

Contact BHHS Homesale Realty today to get started with our team.