First Time Home Buyer's Guide
Boise, Idaho


Pursuing the American dream of homeownership is a big deal and many consider it a step into adulthood. And now that millennials are joining the party—the average first-time home buyer in the U.S. is 31 years old. But before you buy, here are some things to do.

1. Assess your need

You don’t want to be buying a home just because you turned 31 or because your friends have started doing it. Be sure to buy a house that suits your lifestyle and needs.

2. It's a math question

Many people focus on the down payment when they think about buying a home. Yes, the down payment is usually a large chunk of money. But there are other upfront costs you need to think about—taxes, property insurance, and closing costs for example. More information is further down this page.

3. Get pre-approved

In most cases, you will need a government-issued ID, a credit report (you can get free copies every year), a verification form from your employer, W-2 forms, federal tax returns, and bank and asset statements.

4. Retail therapy

A house is likely the largest purchase you’ll ever make, so treat it like other large purchases. That means you want to shop around as you would for a car, TV, or couch.

5. Be prepared to walk away

If you aren't comfortable with the purchase, you may have to walk away and leave the house for someone else to buy. You want to have full confidence in your decision. If you don't feel confident, it's not meant to be.

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Top reasons to get pre-approved before looking at houses

The one thing you should absolutely do before you look at houses is get pre-approved for a home loan. Shopping for a home without a pre-approval is like shopping at a high-end store without understanding how much money is in your bank account.


1. Sellers want buyers that are pre-approved

Nobody wants to waste time, including the sellers. They do not want to spend time with buyers who have not made the proper arrangements to be able to buy their home. They want to know that you are capable and have taken the time to arrange financing to buy a home. Without a pre-approval in hand, they are taking your word for it. How do they know that you can afford the home? The pre-approval letter from your lender provides proof that you can purchase the home. Read more about the mortgage pre-approval steps here.

2. You can stay within your home buying budget

Why waste time shopping for a home you cannot afford? It is also much more enjoyable to know what your home purchasing parameters are. This will inevitably help prevent any type of letdown when you realize that you can’t afford the home you thought you fell in love with. Also, you’ll find a home faster by not looking at things you cannot purchase.

3. You’ll know if you have any barriers to loan approval

You won’t know until you apply if there are problems for you to solve prior to getting the loan closed. When the lender pulls your credit, they may notice issues that will prevent you from securing approval. You can use this time to find out what’s wrong with your credit and see what you need to do to fix it. Sometimes it’s not your credit, but other things like your debt to income ratio, lack of assets, or inconsistent employment that prevents you from getting approved. By getting pre-approved, you can work on fixing those issues immediately rather than when it is too late.

4. It can give you an edge in a bidding war

In a seller’s market, you could wind up in a bidding war. When there is high demand for a specific home, buyers may try to outbid one another. Having the pre-approval can:

  • Help you know your budget constraints when bidding on a home
  • Help the seller take your bid seriously

If you don’t have that pre-approval letter, you may find a seller that takes an offer lower than yours because that buyer has a pre-approval letter. It holds a lot of weight in the eyes of the agent when present your offer to the seller. Getting a pre-approval before you shop for a home is one of the best decisions you can make. Pre-approvals also help you get your bearings so you’ll know what you can afford and what conditions you have to satisfy to get the home loan. Sellers will have more respect for your offer and you may stand a better chance of buying the home you really want!

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10 Tips to make the home buying process easier

1. If you can't stay put, don't move

If you can't commit to remaining in one place for several years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner—even in a rising market. When prices are falling, it's an even worse proposition.

2. Get your credit and finances aligned so you can get a loan

Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct and fix any problems you discover. A mortgage professional can help with this.

3. Buy something you can afford to enjoy

The general rule of thumb is that you should aim for a house that costs about 2½ times your annual salary. Try Build Idaho's free mortgage calculator to get a better estimate on how your income, debts, and expenses affect what you can afford.

4. Many banking institutions require 20% down. However, there are programs that allow for less.

There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a small down payment. More down payment information here.

5. Search for homes in a good school district

In most areas, this advice applies even if you don't have school-age children. The reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many homebuyers, thus helping to boost property values. The schools in Boise are well-known for their quality of schools, test results, and staff. Check out our Boise-area schools breakdown.

6. Get a professional real estate agent to help

The Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.

7. Mortgage points vs interest rates

When picking a mortgage, you usually have the option of paying additional points—a portion of the interest that you pay at closing—in exchange for a lower interest rate. If you stay in the house for a long time (more than five years) it's usually a better deal to take the points. The lower interest rate will save you more in the long run.

8. Get pre-approved

Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt, and credit history.

9. Do your homework before making an offer

Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you may consider making an offer that's about eight to 10 percent lower than what the seller is asking.

10. Home inspection

Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own licensed home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.

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