Ultimate First Time Home Buyer Guide 2024

Credit Karma reports more than half (54%) of American renters don’t believe they will ever be able to own a home. 

The desire to become a homeowner is still alive despite the amount of competition among home buyers in Albany County NY.

An unknown author said, “If you want something you never had, you have to do something you have never done.”

Do not be discouraged by reports about the struggle of the home buyer.

I believe having a positive mindset will set you in the right direction to homeownership.

Know that you are connected to a resource to help guide you along your journey to accomplishing your dream of homeownership.

The Ultimate First Time Home Buyer Guide is your resource to discover tips for first time home buyers in Albany NY.

What are the tips for first time home buyers in 2024?

The road to homeownership

The road to homeownership will have many twists and turns along the process. The best way to prepare yourself is to understand the process and reduce the number of surprises along the way.  I say reduce because there will be surprises along the way to buying a home.  As you move along the journey you may have feelings of excitement, nervousness, stress, and anger.

You may be pleased when you make the decision to become a homeowner. Then fear could set in because of the current housing market conditions. Questions about finding a home or qualifying for a home could create nervousness. These emotions are completely normal and understandable during this process.  Having a better understanding of these emotions can help you manage them during the homeownership journey.

Rent or buy a home

Deciding to rent or buy a home can be complicated because of the housing market conditions.  There are many reasons to consider when making this significant decision. Making a quick decision and jumping into buying a home can create buyer’s remorse.

Assess the following elements when making a decision to purchase a home.

1. Financial - mortgage rates fluctuate and will have an impact on your ability to purchase a home.  Another aspect is saving for the down payment. As well as the cost of property maintenance.

2. Lifestyle considerations - other common considerations include getting married, starting a family, or retiring. There are more people working from home which creates flexibility in where they live.

3. Personalization - the pandemic has transformed how and where we work. People are interested in modifying their homes to meet the needs of working from home.  Applying a personal touch to your home such as upgrading kitchen appliances to renovation projects are important to many people. When you own a home then you will have the freedom to unleash your creativity. 

Rent vs. Buy Calculator

Make certain that you are prepared

Remember the hidden costs as you evaluate your goal to purchase a home. You risk underestimating how much you can afford to pay each month. The cost of taxes, insurance, utilities, fees, and closing costs are some of the costs that must be included in your evaluation. A major cost is maintenance and repairs.

How much can I afford

Buying a home may be the largest investment decision you will make. Ensuring your finances are in order is essential as you move along your journey to homeownership.

The affordability calculator can help you estimate a mortgage that fits your budget.

Affordability Calculator

Your debt-to-income ratio and credit score are two factors lenders will use during the mortgage application process.

Your debt-to-income ratio will affect the size of the mortgage loan and interest rate. The debt-to-income calculator will determine your debt-to-income ratio based on your annual income and monthly debts.

Debt-to-Income Calculator

Your credit score helps the lender decide if you qualified for a mortgage loan and the conditions of the loan. A higher credit score can give you a lower interest rate but a low credit score could give you a higher interest rate. You can research your credit score and credit report at one of the three main bureaus: Equifax, Experian, and TransUnion.

Free Credit Report

Design a plan for the down payment on a home

Your down payment is an important part of the home buying process.

A down payment is a percentage of the purchase price that you pay upfront when you close your mortgage. For example, if your home costs $200,000, a 3.5% down payment would be $7,000 and 5% is $10,000.

You can save money for your down payment by paying yourself first and setting aside at least 10% of your income each month. You should also avoid spending money on items that do not directly contribute to your savings goal such as going out or eating out too often and take advantage of any matching 401K contributions from your employer.

A plan for the down payment on a home should include the following:

a. Saving up money to cover the down payment, closing costs, and other expenses

b. Finding a lender to help with financing

c. Setting a budget for monthly mortgage payments

First time home buyer programs

The first time home buyer programs are designed to help first time home buyers with their mortgage financing. These programs are generally state and federal sponsored and provide a great opportunity for first time buyers to get into the housing market.

The following programs are offered:

a. Down payment assistance: SONYMA offers the Down Payment Assistance Loan (DPAL) 3% of the purchase price towards the down payment and closing costs.

b. Low-interest loans: SONYMA's Achieving the Dream Program is generally offered at a below-market interest rate.

c. HUD Good Neighbor Next Door program: the Good Neighbor Next Door program offers HUD homes (FHA foreclosures) at a significant discount for eligible buyers i.e.: teachers, police, fireman, and EMTs.

d. HomeReady and HomePossible: the HomeReady and HomePossible are first time home buyer programs designed to assist borrowers earning less than 80% of the area median income. They offer reduced mortgage insurance premiums and lower costs

e. RemodelNY Program: the RemodelNY program provides competitive financing to first time homebuyers who are buying a house that is in need of fixing.

Types of mortgage loans

A mortgage loan is a loan that is given to a borrower to purchase a property. These are the different types of mortgage loans available:

a. Conventional Mortgage: is not backed by the federal government. Depending on the lender, the down payment requirement range from 5% to 20%.

b. Fixed Rate Mortgage: have interest rates that never change over the life of the loan. This means your principal and interest payment amount is the same per month.

c. Adjustable Rate Mortgage: have interest rates that change according to current market conditions. These types of loans are more complicated because they require borrowers to monitor their monthly payments very carefully or risk paying much more than they had anticipated.

d. FHA Mortgage: is backed by the federal government. This type of loan has lower down payment requirements and more flexible credit guidelines than other types of mortgages.

e. USDA Mortgage: is backed by the federal government. It helps buyers purchase or build a home with no money down in eligible rural areas.

f. VA Mortgage: is backed by the federal government for veterans and active-duty members of the military. The VA loan allows for 100% financing with no down payment required.

Build a wish list

A wish list is an essential tool for a first time home buyer. It can help them to stay realistic about the process and not get carried away by their own imagination. It also helps them to prioritize their needs and wants in order to find the perfect home for themselves. is nothing quite as exciting as searching for your next home.

The first step in building your wish list is figuring out what you need and want from your new home. This includes things like:

a. Location: is an important factor when buying a home. You need to consider if the area offers what you want in terms of commuting to work, schools, amenities, shopping centers, etc.

b. Size: is also important when buying a home. Considering if the space meets your needs and if it will be enough for your family's needs in the future is essential during the planning process.

c. Price: is surely an important factor when buying a home. You need to consider what kind of monthly payments are comfortable for you and how much you have saved up for this investment.

Choose a mortgage lender

It is not easy to choose a mortgage lender when you are first time home buyer. With so many options available, it becomes difficult to make the right decision. You want to make sure you find the best option for your needs.

The first thing you should do is make sure the lender offers loans for first time home buyers. If they do not then you may want to keep researching other lenders.

Next, ask about the interest rates and how much it will cost each month. These two factors are very important when deciding which mortgage to choose.

Finally, ask about what kind of support they offer, such as financial counseling or education sessions on how to manage your money wisely.

Mortgage Pre-Qualification vs. Pre-Approval

Pre-qualification is a process for determining how much a borrower can afford to borrow. Mortgage pre-qualification is not a binding commitment and it does not require an applicant to provide any supporting documents.

Pre-approval, on the other hand, is when the lender has determined an approved amount the first time buyer is approved for. The lender has completed their necessary checks to make a determination.

Getting pre-approval for a mortgage is a crucial step in the process of home buying. It helps buyers determine their budget and find out what they can afford based on the maximum amount they are able to spend on a property.

Choose a real estate agent

When it comes to buying a home for the first time, there are many things to consider. One of the most important is choosing the right real estate agent. Choosing a real estate agent can be a difficult process. Especially if you are a first time home buyer and do not have experience in the field. There are many different factors to consider before making your decision.

If you are looking for someone who has experience with first time home buyers, there are many things to keep in mind. One of the most important things is their knowledge of your area's market and pricing trends. They should have an understanding of what is available and what is not.

Lastly, your real estate agent should be able to provide you with references from previous clients who were first time buyers so that you can get an idea of their work ethic and commitment to their clients' needs.

Time to home shop and schedule showings

The first time you visit a home, it is important to take note of the details. The following tips will help you make an informed decision before submitting an offer:

a. Visually inspect the exterior and interior of the property for any signs of damage or neglects.

b. Check for any potential hazards such as unsafe wiring, mold, or pest infestations.

c. Perform a walk-through to get a sense of how large the rooms are and if they would suit your needs.

d. Check for any evidence that there have been previous floods in the basement or crawl space areas.

e. Inspect appliances and fixtures to see if they are in working order or need replacement.

f. Evaluate whether you can afford to make improvements on the property that would be necessary after purchase, such as repainting walls and repairing leaky pipes.

Make an offer

If you are a first time home buyer, it is important to be prepared with the knowledge of what you need in order to make a competitive offer on a home. A competitive offer on a home is an offer that will not only be accepted by the seller but also one that will be difficult for other buyers to match.

We all want to feel like we are getting a good deal, and in the housing market, this is especially true. The best way to make sure that you are getting a competitive offer on a home is to do your research.

When you are searching for homes, it is important that you know what other homes in the area have sold for recently. This will let you know if there is any room for negotiation or if the property is overpriced. Your real estate agent can help you with this as well.

Attorney approval

The attorney that you have hired to represent you during the home buying process will review the purchase agreement when your offer has been accepted and all parties have signed the contract. Each party will have three days for their attorney to review the contract and receive counsel.

During the attorney approval, your attorney will review the contract and make sure it is legally sound and does contain any errors, inconsistencies, or missing information. Your attorney will provide valuable advice on the legal implications of the contract and how it may affect you.

Hiring an attorney will help you avoid costly mistakes and save you from problems down the line.

Home inspections what to expect

Home inspections are necessary for first time home buyers because they will be able to find out what needs to be repaired or replaced before moving in. Buyers will gain insight into what condition their new home will be in after they move in. The more information buyers have, the better prepared they are for their new home.

In the contract of sale is a home inspection contingency. It is a clause that states that the buyer has the option to cancel the purchase if they are not satisfied with the findings of an inspection. The buyer must pay for this inspection and it is usually done by a certified home inspector.

Clear to close

The mortgage lender will provide a clear to close. It is their announcement to inform each party that the lender and buyer have completed all their requirements. The next step is to schedule a closing date. Also, the home buyer would coordinate with their attorney to finalize outstanding details.

Closing day

Closing day is an exciting moment for first time home buyers. This is the day when you sign documents and receive keys to your home. Making it to this point reveals a dream come true.

Your real estate agent will schedule a final walk through of the property. The property's final walk through is your last chance before you sign the paperwork to inspect the property. Unlike a home inspection, the final walk through inspection is an opportunity to verify there have not been any changes to the home since the home inspection.

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Final Thoughts

Home buyers in Albany County NY are facing many challenges due to the housing market condition. Through many opportunities in the community, they can overcome these challenges.

Homeownership can be a big step for a home buyer. There are many resources available to home buyers along their journey to help them be successful.

Beginning your journey to homeownership should begin early. Homeownership can be a long journey but taking a step in the right direction is invaluable.

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About the Author

Denise Sherman is a Real Estate Salesperson, who specializes in helping first time home buyers in Albany County NY. She is concerned with providing her readers with valuable information to make a good real estate decision. Go here to read her unbelievable story, "Military Veteran Launches Project to Help Families with Autistic Children Age at Home." If you want to send Denise a quick message about your real estate goals, then visit her contact page here.