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The Guide to First-Time Homebuying Like a Second-Time Homebuyer

Posted by South Dakota Housing Authority on Aug 25, 2016 3:35:05 PM


When it comes to the first-time homebuying experience, many people we talk to say, "I wish I had known this the first time around."

Buying a new home or upgrading to a new place is a big change. Whether you need more room or want an outdoor oasis, know the right steps to take and tools to utilize so you can buy your first home as if you were an old pro at it.

Try out the following tips for making your first-time-homebuying experience feel like the second time.

Know Your Neighborhood

Neighborhoods and their occupants can play a big role in whether a property is the right fit. Don't be afraid to talk to some of the people who live in your area of choice and find out first-hand what you can expect in terms of noise, cleanliness and safety. (And for bonus points, do your research and find out what the future holds for the neighborhood - are there plans to add stoplights, street parking, businesses, etc., to this particular area?)

Pick the Ideal Loan

When a selecting a mortgage loan for the first time, it might be more attractive to see an end date in the nearer future than a longer-lasting loan. But if it will be a stretch in your limited budget to cover a short-term loan, it might be worth going for a longer loan and pitch in an extra payment or two when you can. You'll be in control over how much more quickly you pay off your loan, and you won't run the risk of potentially defaulting because you miscalculated how difficult the monthly payment would be to manage.

Save Some Cash

You may be eager to put your downpayment fund to its fullest use (and if the downpayment is keeping you from pulling the trigger, check our assistance program). But if you have it, that doesn't necessarily mean you should spend it. Don't set yourself up for failure by depleting your financial resources right before you buy a house. Odds are, there will be maintenance and upkeep costs you'll expend right off the bat, from paint to lumber to appliance replacements. And you'll need money for that. Keep some money on hand for that very reason.

Solidify Your Credit

If no surprises at the bank counter is your speed, it might be a good idea to get a grasp on your credit score before trying to qualify. If this is your first major purchase, you may not have a good idea of the state of your credit, so get a free report and analyze your results. Does anything look incorrect or exaggerated? Is your score poor enough that you'll need some time to improve it? These are things that can be addressed prior to diving in.

Prep Your Documents

When you've already gone through the process before, it's easier to recall the organization you need to do upfront to prep for filing for a mortgage and getting your financing in order. So if you're a first-timer, consider assembling the following items in advance of your application submission. You'll typically need a couple recent pay stubs, as well as W-2s, tax returns and bank statements, all to indicate your income, a big factor in your lending result.

The inside scoop from the ones who've done it before is the best kind of prep to get you ready. So start acting like a second-time homebuyer, and your first-time purchase should go much smoother.


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