I'm hoping to buy my first home by the end of this year, and I wanted to ask this on the bowl. When it comes to buying your first home, what do you think is the most surprising or underestimated challenge beyond just saving for a down payment? I feel like there's got to be something - maybe navigating credit score requirements, understanding debt-to-income ratios, qualifying for assistance programs? Just wondering if there was something that caught you completely off guard in the process.

I think the hardest part is being honest with yourself and buying a home that you can actually afford. Everyone wants that nice house, and many will push up their budget and then the cost of owning the house made them house poor.

I eased my way into home ownership by buying a small apartment first, built equity, learnt about what it takes to own a place, and then swap into a house a few years later. I always bought one of the cheapest property in the area, but I made it nicer over time.

If your bank or credit union or any other financial institution has or hosts 1st time home buyers seminars or workshops, I would encourage you to attend. They are usually free events for the attendees. Before I purchased my first home my credit union would host an annual 1st time home buyers workshop/seminar. I attended the event 3 years in a row and everything would be discussed regarding the home buying process from credit, realtors, financing, APR, interest rates, title insurance, 1st time home buyer GRANTS through your city and/or county or perhaps both in some instances, inspections, title insurance, closing cost, I mean you name it was covered during the day long seminar. By my 3rd annual seminar purchasing was a breeze.

For me, closing costs was a curve ball. Also insurance and property taxes, and finally, unplanned home repairs - even after thorough inspections inspections, this things just come out of nowhere once you’ve moved in sigh

As mentioned above, the little costs add up.

Get a good loan officer and they’ll help you through. I’ve refinanced with mine and bought a second property out of state with him because I trust him.

The biggest surprise to me was how much I spent after moving in. I wanted a different smart lock on the front door, there’s 2-3 hundred. Changed a fan or 2, a few rooms desperately needed painting. Nothing that should be a big expense but when you do a whole bunch in just a few weeks it feels expensive.

For me, it was how complicated and stressful the whole process felt. I thought once I had enough saved, I’d be set, but then came the credit score checks, all the paperwork, and trying to make sense of things like debt-to-income ratios. I actually hit a snag because of an old credit card I’d forgotten about, which delayed my approval. Plus, I had no idea how many little costs would pop up... inspections, closing fees, and all sorts of things I hadn’t budgeted for. It was definitely overwhelming at times, but looking back, it taught me a lot about being prepared and asking questions.

Don’t be surprised in the shear amount of financial documents the loan company will ask for. My first house, I showed them everything. The next house, I only gave them enough info to approve me.
Advice after you move in, don’t go into debt furnishing the place. You can slowly replace old furniture with new. Buy off FB marketplace. You will have unexpected expenses out of your control.
If you are moving into an older house, think about getting a home warranty for the first year. I know home warranties are usually a waste of money, but I’ve gotten a lot of AC work, plumbing issues, appliances fixed under it with the older items that were in the home. It’s peace of mind if you don’t have $10k set aside if your AC goes out.

Many first time home buyers make decisions based on emotion. The best deals are had when you can look past the cosmetics and tick the boxes that matter - good location, good bones of the house, etc… understanding what upgrades you might want which are “easy” or “cheap” can help you find a house that fits your needs and has less competition.

As silly as it sounds, watch a bunch of those “house hunting” shows and listen to the complaints of the potential buyers. “I don’t like the carpet / paint” is an easy fix. “The layout doesn’t flow well between the kitchen and living area” might be an easy fix or a not so easy fix, depending on the scenario. “There’s not enough space” is a much harder fix.

Make a list of your wants / needs, as well as your “nice to haves”, and understand how each item on that list plays into your budget.

The biggest thing I didn’t realize was that you don’t *need* 20% for a down payment and that PMI isn’t crazy expensive until you have the 20% equity you need to remove it. If I had known PMI was only a hundred or so a month instead of $300-400, I might have bought a house or condo years earlier.

Don’t get me wrong, it’s definitely smarter to have more to put down and you certainly need to plan for closing costs and then, you know, actually filling the place. But equity builds faster than you think. We closed with a little over 10% down and, after adding solar and 18ish months of mortgage payments and appreciation were able to get rid of our $150/mo PMI

After you buy, everything is super expensive for the first year. Especially if you don’t have time to optimize and shop tons of quotes, there is still a huge negotiating component to trade work. I had new flooring installed in the house, first quote I got was $18k+ tax, I went through four rounds of revisions to get to $12k including tax. With paint and retexturing walls, my first quote was $35k, got two more for $18k and $15k that I went through. Then things like changing the locks was $500, electrical work was $2k. Basically it’s pretty tough to even get someone to show up to your house for less than $500 it seems these days. Especially as a new homeowner without a contractor network you know

Find a loan officer that has been in the business over 10 years. Keep your debt down, don't make any large purchases. They will pull your credit before closing. You can ask the seller to pay for some closing costs. Shop around for homeowners insurance. Check out first time homebuyer grants.

All the costs associated with home ownership that no one ever tells you about. Closing costs in the transaction, taxes, insurance, water, cable, gas, lawn and garden maintenance, money to be spent on keeping things in good working order and there seems to be a new one every day. If you can, buy a new construction home ... one with a good home warrenty and look for a home that a builder has been sitting on for some time and you will be able to negotiate the price and the closing costs. Many offer first time home buyer programs...that would be my opinion.

I think the biggest surprise to me during my first mortgage was that your monthly payment generally goes up every year as your property taxes and home owners insurance change. When I was prosecuting cases and paying my loans back, my income was pretty tight and I was unprepared to discover that the amount I had to pay to escrow was going to go up.

Be prepared for your mortgage to increase bc of taxes and insurance. Mine started at $1750 and after two years was nearly $2300.

Real estate people and inspectors cannot be trusted. My realtor did nothing to protect me, just hungry for the commission even though she worked for an old, established firm and lived in a $800,000 house. Though my house passed everything, the city inspector let me know my wiring had to be redone - $20,000.

If you can GO TO THE HOME INSPECTION and then ASK QUESTIONS! If you don't know a lot about houses or what to look for ask for someone who does to tag along and give them permission to ask questions. Home buying is very stressful but very rewarding and exciting! CONGRATULATIONS

I agree with the above insights and opinions. For me the biggest misunderstanding (as it was my first time) was just how much “closing costs” can actually end up being. This also depends on your lender but it can easily be 12k. Just be aware and do your research on your lender..they can offer different fee amts.

One note is, think about whether you're in for the long haul. When I was a mere renter, I went from place to place with ease. I got married & figured our first starter home would be 5 to 7 years max, after which we'd scale up. After having kids, my (ex) felt differently and we stayed for 25 years. So don't assume how long you might actually be there, esp if you have kids! You're buying a home with all of its unique oddities, plus the neighborhood, the neighbors, the school district... "whole enchilada"

The actual buying a home part was way easier and simpler than people make it sound. It was what came after that I wasn’t prepared for - I spent $85k on completely unexpected issues in the first year. I would suggest you save a very healthy emergency maintenance budget - don’t just think about the down payment, you need way more than that saved. Remember - the mortgage is the FLOOR of expenses, while rent was the ceiling.

If you can take a first time home buyers class locally. You can hear all the programs offered.