If you finally think that you are stable and mature enough to own a home, you need to make sure that you have adequate knowledge about the situation that you are about to enter. New home buyers often find themselves overwhelmed with the whole process and if you are feeling the same way, do not worry because it’s normal.

To help you, here are some of the most important aspects that you need to know once you have decided to buy a house:

Down Payment

One of the largest up-front expenses that home buyers need to pay for is the down payment. The down payment is a portion of the property’s full price and in some instances, it is non-refundable. Many lenders set different rates of down payment. Some can be as low as 3.5% while others may cost as high as 50%. In the United States, the average cost of a down payment ranges from 5% to 20% of the house’s total value.

Keep in mind that when it comes to the down payment, the higher you shell out, the lower your monthly loan will be. However, not all aspiring homeowners can afford the full 20% that’s why other institutions can allow you to put a down payment as low as 3.5%.

One example of this is the Federal Housing Administration Loan or also known as FHA. Generally speaking, FHA loans are nationally backed types of mortgage meant for people who have below-average credit scores. To qualify for an FHA loan, your credit score must be at least 580.


A mortgage is a type of loan that you take out to buy a property. It usually runs for 25 years, but there are also shorter or longer terms depending on your financial capacity. Be reminded that when it comes to mortgages, if you can not keep up with the payments, the lending institution has the option to repossess the house and put it back on the market.

As a first-time homebuyer, you need to make sure that you do not over-stretch yourself. There are attractive mortgage plans that you might see as okay for now but can cause you financial struggle in the future. To make sure you are following your budget, use a reliable home mortgage calculator to help you decide which payment plan you can afford, or if you are age 62+ utilize this reverse mortgage calculator provided free by ReverseMortgageReviews.org.

Once you have decided on the amount, the next thing is to prepare necessary paperwork such as your bank statements that will show your credit score. The lenders may also want information about your expenses as a family and household bills. If they deem you unfit to pay a monthly loan, they have the option to decline your mortgage application.

Property Tax

The cost of your property tax is hinged on the assessed value of your house. It is usually determined by an assessor who works in your local government. To compute the rate, the value of your house will be multiplied against the local tax rate in your municipality or state. It is paid to the local government and is usually collected annually or every two years.

In most cases, the cost of the property tax is already included in your monthly mortgage payments. Under this payment method, the property tax will be paid every month by dividing the annual estimate amount by twelve years. That final price will then be added to your mortgage payment every month. Another way to pay for property tax is to send your payment directly to the local tax office.

House Inspection

Some first-time home buyers tend to overlook this part of the process. It is easy to make a decision based on the façade of the house but there are many aspects of the property that you need to check before making a final decision. Generally speaking, a house inspection refers to the examination of the property’s current state. This is also a way to determine whether the house is safe for dwelling or not.

Some of the most important things that need to be looked at during the inspection are the quality of the foundation, walls, and roofs. The inspector also needs to look at the electrical, plumbing, sewage and, heating and cooling systems. Another important factor to look at is to inspect if the house has any rodent or pest infestation.

A new house can be one of the most significant and life-changing investments that you will make. Now that you are aware of the basics, the next thing to do is to enjoy the whole process and look forward to living in your dream home. Alternatively, if you’re not ready to invest in something of your own and deal with the headaches of home ownership, you can consider real estate trust deed investing, which will allow you to act as the bank without dealing with any maintenance issues.