So you’re dreaming of buying your first home! Welcome to the journey that can be both exciting and equally stressful. In order to accomplish this goal successfully, you’ll need to release any thoughts discouraging you from the possibility of being a homeowner.

To help with that, please note my home-buying experience. I bought my four-bedroom single-family home in Chicago in 2018 as a single mom. At the time, I wasn’t married, had thousands in student loans, and my credit score was under 700. In short, if I could do it, so can you! Below, I debunk a few common myths and share a few tips. 

Home-buying myths

1. Buying a home costs too much

Yes, of course, homes are expensive — but they may not be as costly as you’re expecting. You don’t need a 20% down payment as many people have come to believe. There are several loan programs and grants to help assist with costs, some of which are specifically designed for first-time home buyers. I utilized an FHA loan and ended up paying 5% for my down payment. 

2. A high-paying job is a requirement

The amount of money you make isn’t as important as your debt-to-income ratio and the length of time you’ve spent at your job. Working with a reputable mortgage lender at the start of your search will help not only provide you peace of mind to know what you can afford but will also help showcase you as a serious buyer when you start to tour properties. Your lender will provide you with a pre-approval or pre-qualification letter so you know how much you’re eligible to borrow for your home purchase.

3. You need to have good credit

Sure, you can’t have terrible credit and finance a home — but there are loan options for different credit levels. For an FHA loan, the minimum credit requirement is a score of 600. This score is lower than the requirement for many rental properties. You can work on repairing your credit yourself or seek help from a credit repair service.

4. The “home-buying team” is expensive

The home-buying team I’m referring to is your realtor, mortgage lender, and attorney. I very heavily relied on all three to make my home purchase and the process itself went relatively smoothly. I wasn’t required to pay any of the three parties until the close of the home-buying process and everyone was transparent about their payments. You could also ask the seller for credits — and there are other ways to help offset these payments too. 

5. Renting is cheaper than a mortgage

I’m sure in some cases renting is cheaper than a mortgage — but when comparing properties of similar sizes in similar locations, I doubt that would ever be the case. For transparency, my mortgage payment is under $900. You wouldn’t be able to find a four-bedroom, single-family rental under $1,500.

Home-buying tips

1. It’s all about timing

When you’re in the process of buying your first home, one important thing to keep an eye on is the housing market and trending patterns. If you notice a lot of homes in your desired neighborhood are for sale, this could mean the market supply is saturated with options for buyers but it isn’t the best time to sell. If you notice a low number of homes for sale in your desired neighborhood, that could indicate low supply and signal it’s a better market for sellers.

When you pull comparative properties (properties similar to yours that are either for sale or recently sold), you can get a better idea of market trends. If a property has been on the market for a long time (90+ days), that could mean there aren’t a plethora of potential buyers or more specifically could show the area isn’t drawing in many buyers.

2. Finding the right agent is key

One of the most vital pieces in the home-buying process is working with an experienced and knowledgeable agent. They’ve gone through the process before and they’ll be able to guide you along the way. They also know what to look out for and what questions to ask when you’re on the home search journey.

Your agent should be well-versed in the current state of the housing market. When it’s a sellers’ market, your agent will work with a sense of urgency when there’s a property you’re interested in and they’ll help you determine a competitive offer. When it’s a buyers’ market, they’ll help you negotiate and leverage an offer to get the property you want for the best price.

3. You’ll want to have some extra reserve funds

From my experience and the experiences of family members and other BIPOCs, you’ll need more money in the home-buying process than what was initially communicated to you and what was expected. In my journey, I was asked to showcase an additional $10K in “reserve” funds after my lender had access to all my bank accounts and knew I had no additional funds.

I was able to source the money as a “gift” from family. My parents had the exact same experience when purchasing their homes decades ago. I’d recommend keeping some funds separate from what you disclose to your mortgage lender in the event they ask for additional reserves.

4. Buy something you can grow into

During the home-buying process, I was constantly reminded of a couple things. The first was that you can make any physical changes to your home that you want, aesthetically and operationally. You can’t, however, move the location of your home — so ensure you’re in a place that’s comfortable for you.

The second reminder: Buy bigger than what you need at the time/something you can grow into. If two bedrooms would be just enough space for you or your family right now, buy a three-bedroom or larger. You have options on what to do with the extra space.

The bottom line: Whether you’re married or single or you plan to move in the next few years or decades, your home will build equity, which can positively affect you in a plethora of ways. Take your time, do the research, and make the choices that are right for you!