Your Insider’s Guide to Smart Home Buying
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Buying a home, especially if it’s your first time, can feel exciting but also a little overwhelming. Most first-time buyers worry about making a mistake. You might feel like you don’t know what you don’t know and that’s completely normal. The good news? You’re not alone.
I hear the same concerns and questions from first-time buyers all the time. Chances are, the questions running through your mind are the same ones other buyers are asking and many of today’s buyers are asking the same questions that buyers before them asked.
That’s why I’ve pulled together answers to the most common first-time homebuyer FAQs I receive. Think of it as your quick-start guide that will give you clarity, reassurance, and maybe even help you learn something you didn’t know you didn’t know.
Remember, there’s no such thing as a dumb question especially when it comes to buying your first home. If you don’t see your question answered here, just reach out and ask I’m here to help.
1. How much house can I afford?
Your budget depends on your income, debts, credit score, and how much you’ve saved for a down payment. A good rule of thumb is to keep your monthly mortgage payment including taxes and insurance under 30% of your income. The best way to get a real number is to talk with a lender and get pre-approved. This will show you exactly what price range you should be shopping in and help you focus and dial in on your home search.
2. What credit score do I need?
For most loans, a credit score of 620 or higher is ideal. FHA loans may go as low as 580, but the higher your score, the better your interest rate and lower monthly payments. Don’t worry if your score isn’t perfect. Many first-time buyers improve their credit just enough to qualify within a few months with guidance from a lender.
3. How much do I need for a down payment?
No, you do not need 20% down to buy a home. Many first-time buyers put down as little as 3–5%. Certain programs like VA or USDA loans may even allow 0% down. The key is to find the program that works best for your budget and goals.
4. What other costs should I expect?
Beyond your down payment, you’ll have closing costs, typically 2–5% of the purchase price. These include the appraisal, inspection, title search, buyer brokerage compensation and lender fees. You should also budget for moving expenses, utility deposits, and any updates you might want to make once you move in.
5. Pre-qualification vs. pre-approval, what’s the difference?
Pre-qualification gives a rough estimate of what you might qualify for based on your income and credit. Pre-approval involves a full review of your credit, income, and documentation.
Sellers typically take pre-approvals seriously. It shows you’re a serious buyer and can make your offer more competitive in a hot market.
I prefer to have buyers fully underwritten before starting their home search. Being underwritten not only helps buyers stand out to sellers but also reduces contingency times and avoids common hiccups that first-time homebuyers often experience. It gives you a smoother, more confident buying experience.
6. How long does the process take?
To get pre-qualified, pre-approved or underwritten usually depends on how long it takes you to produce the required documents to the lender and underwriter. If you’re proactive and on top of things, it can range from a few hours to 2-3 weeks.
Typically, house hunting can take a few weeks to a few months. Once you’re under contract, closing usually takes 30–45 days, depending on your financing, inspections, and other factors.
7. Is it better to rent or buy right now?
Again, this depends on you. I will always tell you to buy when you’re tired of paying rent and ready to own your own home.
A typical gauge is if you plan to stay in the same state/area for 3 years or longer, buying usually makes sense. Instead of paying rent to a landlord, you’re building equity in your own home. If your plans are short-term or uncertain, renting may be the better option for now.
8. Do I really need an agent, and how do they get paid?
A buyer’s agent is your advocate throughout the home buying process. They educate you through the process, help you search for homes, negotiate the best deal, review contracts, ensure your interests are protected, and advise along the way.
Here’s how compensation works under the new NAR settlement rules (August 2024):
Buyer’s agents must have a written agreement with you before showing homes. This agreement outlines how they are paid and what services you’ll receive.
Sellers are not required to pay the buyer’s agent. Some may still do so, but it’s no longer automatic or displayed in the multiple listing service (MLS).
If the seller does not cover the fee, the buyer is responsible. This can often be negotiated into the purchase agreement or closing costs.
Even with these changes, having a buyer’s agent is invaluable. They save you time, money, stress, and guide you through one of the biggest purchases of your life.
Basically, if you wouldn’t go to trial unrepresented, I don’t suggest you purchase a home unrepresented.
9. What types of loans are available?
Some common options for first-time buyers:
- Conventional loans – best for strong credit and higher down payments.
- FHA loans – flexible credit and lower down payments.
- VA loans – 0% down for veterans and service members.
- USDA loans – 0% down for certain areas just outside the city.
Your lender will help you compare options and choose the best fit for your budget and goals.
10. What about interest rates, should I wait to buy?
Interest rates fluctuate and directly affect your monthly mortgage payment. Trying to time the market perfectly is almost impossible. Focus on finding a home that fits your budget and lifestyle now. You can refinance later if rates drop. Waiting too long may mean missing the right home for your needs.
I always remind buyers “date the rate, marry the house.” Think of your interest rate as something temporary, you can refinance when rates improve. But your home is the long-term commitment. Focus on finding the one you truly love and that best fits your needs and lifestyle.
11. What should I look for besides price?
Look beyond paint colors and finishes. Pay attention to location, condition of the home, and resale value to make sure your investment is smart for the long term.
12. What happens during the inspection and appraisal?
Inspection involves a licensed inspector evaluating the home’s condition, including roof, foundation, plumbing, and electrical systems. Appraisal ensures the home’s value matches the purchase price. Both steps protect you as a buyer and help prevent surprises after closing.
13. How much should I save after I buy a home?
It’s recommended to keep an emergency fund covering 3–6 months of expenses and set aside 1–2% of the home’s value each year for maintenance and repairs. This prepares you for unexpected costs like a broken AC or plumbing issues.
14. How do I know the property value will increase?
While no one can guarantee property values will rise, there are strong signs you can look for. Areas with new development, good schools, easy access to highways or MARTA, and growing retail or dining options often see steady appreciation.
Atlanta continues to grow in population and jobs, which creates long-term demand for housing. That said, every neighborhood is different—two streets over can make a big difference. The best way to protect yourself is to buy smart: compare recent sales, understand market trends, and avoid overpaying.
Remember the old saying: you make your money in real estate when you buy. If you purchase in a strong location at the right price, chances are your home’s value will grow over time.
15. If the house I want is $20k over my price range, does that mean I can’t afford it?
Maybe, maybe not…I tell my clients to focus on your monthly payments, not just on a purchase price. By doing this, you’ll know what you may or may not be comfortable paying for a home every month. In other words, focus on the fact that you want to pay, say, $2,500 per month on your new home and NOT on a somewhat arbitrary price point. Why? Because for every $10,000 change in price, your monthly payment only goes up about $50 per month. When you look at it that way, you might be able to afford the home of your dreams or that home you just fell in love with. So, that extra $20,000 price tag equates into an extra $100 per month. Is that something you can handle? If so and it’s a home that has everything you’d ever want, go for it…as long as it doesn’t break the bank or make you need to change your lifestyle in any way that is uncomfortable. On the other hand, if you buy something not as nice for less money, you might have to spend money on repairs, etc. You’ll need to weigh the pros and cons of each situation when determining what is affordable to you.
The Bottom Line
Buying your first home doesn’t have to feel confusing or intimidating. With the right guidance, preparation, and team on your side, you can make smart decisions and feel confident every step of the way.
If you’re ready to buy your first home, I’d love to guide you through the process.
Let’s talk about your home goals just hit reach out, and we’ll set up a time to connect.
Stay tuned for next week’s article Is Choice Paralysis Derailing Your Home Search? I’ll tell you the secrets that can help you focus on making a decision and not being overwhelmed by too many choices. You don’t want to miss it!
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