I Bought My First Home 2 Years Ago. Here Are 5 Things I Did Right

by Natasha Gabrielle | Published on Sept. 18, 2021

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A couple smiles as they enter their new house carrying moving boxes.

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I made plenty of mistakes when buying my first home, but here's what I did right.

Buying a home is a big decision that changes your life and impacts your finances. My husband and I bought our first home two years ago. It was a significant learning experience for both of us, and we made some mistakes during the process. But along the way, we also made some smart moves.

Here are five things that we did right when buying our first home.

1. Invested in a home inspection

I wasn't about to purchase a home based solely on our tour, which only gave a surface-level picture of the property's condition. I knew that a home inspection was a must. If we found any serious red flags, we could back out of the deal.

I'm glad we did a thorough home inspection because we went into homeownership with a better idea of what to expect over the next few years. We knew we'd likely need to replace the furnace and water heater within the first five years of ownership, and we've already had to replace the heating system. As for long-term repair expenses, our home inspection let us know we'll eventually have to replace the roof, and we've already started a separate savings fund for that large expense.

2. Purchased a home within my financial means

We had a feeling our mortgage lender would approve us for a loan amount that was higher than what was comfortable for us. So we set a comfortable limit and stuck with that throughout the home search process. We bought an affordable home so that if one of us suddenly were unable to work, the other would be able to continue making the mortgage payments without financial worry.

Now, two years later, I'm still glad that we did that. We have more room in our budget to save up for future expenses and prioritize other purchases. It feels good knowing that we're not stressed about the cost of our mortgage payment or property taxes.

3. Prepared for closing costs

I made sure that we received an estimate of our closing costs as early in the lending process as possible. After our offer was accepted, I wanted to have as much time as possible to prepare for the financial aspect of closing day. Having an estimate in advance was helpful because it made it easier to make other financial decisions in our day-to-day life.

Plus, when the closing day rolled around, we had plenty of money in our bank account to make our down payment and pay all of our closing costs without added stress. When making what may be the biggest purchase of your life, it's wise to be well prepared.

4. Paid off most debts before buying a home

During the lending process, your lender will look at your debt-to-income ratio, which measures how much of your income goes toward paying your debts. A lower debt-to-income ratio will increase your odds of getting approved for a mortgage. If you have significant debt, it may make more sense to pay off debt before buying a home.

When going into the home-buying process, we didn't have a lot of debt and made sure to have zero credit card debt. We only used our credit cards for regular, inexpensive monthly purchases and paid them off in full. We did have one car loan and two other loans left. But ultimately, the minimum payments for these loans weren't significant. So not only was our debt-to-income ratio small enough to get a mortgage, but we felt more comfortable taking on the financial commitment of buying a home.

5. Avoided credit inquiries during the buying process

When going through the lending process, you're told to avoid opening new lines of credit until after closing day. The reason behind this is any action that results in a credit pull or opening a new line of credit can impact your credit score. If you open a new credit card or get a new personal loan during the lending process, your credit score could change, which may impact your chance of securing a home loan at the rate you expect.

We made sure to avoid credit inquiries. Even though it was tempting to open a new rewards credit card to earn a great bonus offer, we didn't want to risk our credit situation changing. Since we followed this rule, we were approved for our loan, and everything went great on closing day.

We didn't do everything right during the home search and home buying process, but we did make some smart choices. If you're thinking of buying your first home, make sure you're ready for this life-changing decision. Check out our first-time homebuyers guide to learn more about the process.

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