Becoming a homeowner for the first time is exciting! Here are some easy first steps to take when planning to purchase your first home.

Review your finances

As a first-time homebuyer, consider talking to a financial counselor before starting your search for a mortgage loan. A professional can

• help you evaluate your financial situation
• point out things to work on (e.g., too much debt or poor credit)
• share what costs factor in when buying a home

Now is the time to reduce or eliminate unnecessary spending. You may find you can afford the down payment and monthly payments, but closing costs and potential home repairs could stretch your home-buying budget.

Get pre-approved

Ideally, you want to get pre-approved for a mortgage to help you manage your purchase expectations. For example, you may be looking at homes in the $400,000 range, but the amount of debt you have in comparison to your gross monthly income — your debt-to-income ratio — might tell lenders you can only safely borrow $200,000. Take away the surprise and calculate how much home you can afford before you start looking.

How much can you afford?

Getting pre-approved for your dream home does not mean you have to spend that much. To keep your financial security strong, think about whether you want to keep looking and see if you can find a less expensive home that still meets your needs (and wants!). It might be worth it to spend less on a home today and save for upgrades later.

Find the money to buy your home

First-time buyers may qualify for Civic’s First-Time Homebuyer Loan. You choose a fixed- or adjustable-rate mortgage (ARM) and you do not have to pay the industry-standard 20% down payment.

Keep in mind that many ARM loans start with rates lower than fixed-rate loans. After a period of time, your ARM loan interest rate may change, as will the amount of your monthly payment. If approved for an ARM, be sure to keep a little extra in your emergency fund in case your payment increases.