First-Time Homebuyer Tips

You’ve decided to buy your first home. That’s great! This is a big financial decision that likely took a lot of time and energy to make. With this decision comes an investment opportunity, more responsibility and a chance to make a home.

Before diving into the numbers, take a moment to think about the emotional side of homebuying. It’s natural to feel both eager and anxious. Remember that your first home doesn’t have to be your forever home, and balancing “wants” vs. “needs” can help reduce stress.

As a first-time homebuyer, you’ve probably received a lot of advice from friends and family, and you may have even started talking to a realtor. We’d also like to provide you with some advice about what you should know as a first-time homebuyer.

How can you tell if you’re financially ready to buy a home?

Before you even start looking at houses, you need to have in-depth knowledge of your finances. You should know what your current financial situation is and how it will look to mortgage lenders. Go into the process knowing how much debt you have, what your total household income is, how much you have saved and what your credit score is.

Beyond knowing your own numbers, it’s helpful to connect them to the reality of today’s housing market. In Wisconsin and Minnesota, consider factors like:

• Average home prices in the specific area you’re looking.
• Competition levels: homes in some neighborhoods may sell above asking price.
• Community differences: rural and small-town markets often look very different from metro areas.
• Local guidance: a Forward Bank mortgage lender can help you align your budget with real market conditions.

How much should you put down and what can you afford monthly?

As you think through this step, don’t forget about programs designed specifically for first-time buyers. These can make the difference between waiting years to save or stepping into a home sooner. Some options include:

• WHEDA Loans: The Wisconsin Housing and Economic Development Authority offers programs with reduced down payment requirements and flexible credit standards, created to support first-time buyers.
• Down Payment Grants: Some statewide and community-based programs provide grants that don’t have to be repaid, helping ease the upfront cost of buying.
• Local Assistance Programs: Cities and counties across Wisconsin and Minnesota sometimes offer funds or forgivable loans to encourage homeownership in their communities.

Based on the type of loan you qualify for, your current savings and your current income, you can figure out what your down payment and monthly payments should be.

What documents do you need to get pre-approved for a mortgage?

It’s a good idea to get a jump on the mortgage process before you find the house of your dreams. Have the following documentation ready so you can get prequalified and pre-approved for your mortgage:

• Two years’ worth of tax returns: lenders use these to verify your income history.
• Recent W-2s: helps confirm your current employment and income.
• Pay stubs from at least the last 30 days: shows your most up-to-date earnings.
• Bank account statements: provides a snapshot of your savings, spending, and cash available for a down payment.
• Other assets statements (like retirement accounts): shows additional financial stability and backup resources.

Tip: Keeping both digital and printed copies on hand can speed up the process.

What are the key steps in the homebuying process?

Working with realtors, inspectors, and lenders who know the Wisconsin and Minnesota housing markets can help you navigate the process with confidence . Knowing what’s ahead can help you feel more confident and prepared.

Here are some of the key steps you’ll move through once you find a home you love:

1. Get pre-approved: strengthens your position as a serious buyer.
2. Make an offer: submit your bid and negotiate with the seller.
3. Inspection & appraisal: confirm the home’s value and condition.
4. Option period & repairs: request needed fixes and finalize terms.
5. Final walkthrough & closing: sign documents and receive your keys.

What comes next after you buy your home?

Your journey does not end at closing. In many ways, it is just beginning. The first year of homeownership can bring new responsibilities, but with a little planning you will feel confident managing them. Here are a few important things to keep in mind:

• Budget for ongoing costs. Beyond your mortgage payment, plan ahead for property taxes, homeowners insurance, and utilities. Setting aside a monthly cushion makes these expenses easier to manage.
• Save for maintenance. Homes need regular care. A good rule of thumb is to save 1 to 2 percent of your home’s value each year for repairs and upkeep. Even small things, like replacing a water heater or fixing a roof leak, can add up quickly.
• Stay insured. Your homeowners policy protects your investment, but your needs may change. Review your coverage annually to make sure you are protected against unexpected risks.
• Plan for the future. Think ahead about long-term goals, such as building equity, refinancing when rates drop, or saving for your next home.

Final Thoughts

Buying your first home is a big milestone, and you do not need to take the journey alone. If you would like help getting your finances in order, visit a Forward Bank location near you. Our team will walk you through the paperwork, answer your questions, and help you make decisions that set you up for long-term success.