Buying your first home? These 3 first time home buyer tips can help you prepare, from your credit report to preapproval.

Tip 1: Buy a home to live in, not mainly as an investment

A home can build equity over time, but it is first and foremost a place to live. Home values can rise, and they can also fall, so it is risky to buy a house only because you expect it to gain value quickly.

Instead, focus on a home that fits your budget, your daily routine, and your plans for the next several years. Think about your commute, how much space you need, and how much upkeep you are willing to handle. A home that works well for your life is easier to keep, even when the market changes.

It also helps to plan to stay a while. Buying and selling both come with costs, and staying several years gives your equity more time to grow.

Tip 2: Stay on top of your credit

Your credit has a big effect on whether you qualify for a loan and what interest rate you pay. Before you apply, take these steps:

• Check your credit reports from all three national bureaus at AnnualCreditReport.com, and dispute any mistakes.
• Pay every bill on time, because recent late payments can hurt your score.
• Keep your card balances low compared with your credit limits.
• Avoid opening new accounts while you are preparing to buy and until after you close.

If your credit needs work, give yourself a few months to improve it before you apply. Even a modest improvement can help you qualify for better terms.

Tip 3: Get preapproved for a mortgage

A preapproval tells you how much a lender is willing to lend and shows sellers that you are a serious buyer. To get preapproved, a lender will check your credit and review documents such as your pay stubs, tax returns, and bank statements. The CFPB explains how preapproval differs from prequalification.

It is smart to talk with more than one lender. Each lender must give you a Loan Estimate, which makes it easier to compare rates and fees. Ask each lender about loan programs and any down payment assistance you may qualify for. In Georgia, the Department of Community Affairs runs the Georgia Dream homeownership program, and your lender can tell you whether you are eligible.

Build your home buying team

Buying your first home is easier when you have the right people helping you:

Julie's preferred vendors page lists local lenders, inspectors, and other professionals.

Common first-time buyer myths

Many first-time buyers wait longer than they need to because of a few common myths:

• "I need 20 percent down." Some loans allow much less, and some allow no down payment for eligible buyers. Mortgage insurance usually applies when you put down less on a conventional loan, as the CFPB explains in its guide to private mortgage insurance.
• "I need flawless credit." You need credit that meets your loan program's rules, and some programs are more flexible than others.
• "Renting is always cheaper." Sometimes it is and sometimes it is not, so compare the full cost of owning with your rent.

Start your search

When you are preapproved, you are ready to tour. Browse homes for sale in 23 counties, compare condos and townhomes, or look at new construction. Julie's Home Buying Guide walks through every step from your first search to your closing day.

Search homes in Southeast Georgia

These searches cover all 23 counties Julie serves and update daily.

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Sources

• AnnualCreditReport.com
• Prequalification vs preapproval (CFPB)
• Loan Estimate explainer (CFPB)
• What is private mortgage insurance? (CFPB)