Buying a home is an exciting time, but it can also be a little scary. There are so many decisions to make—from the type of house you want to buy to the neighborhood, and even which lender you choose. The following tips will help guide you through the process of buying your first home.

Down payments can be lower than 20 percent

You don't need to put down a 20% down payment. Instead, you can get a mortgage with as little as 3% down. This is called an FHA loan and it requires private mortgage insurance (PMI). PMI protects the lender in case you default on your loan--and it's not cheap! You'll pay about $50 per month for every $100,000 borrowed if your down payment is less than 20%, so keep that in mind when considering how much house you can afford without dipping into savings, or taking on other debt like student loans or car payments.

Shop around for a mortgage lender or broker

When you start shopping for a mortgage lender or broker, look for one who is a member of the National Association of Mortgage Brokers (NAMB). NAMB members have proven their professionalism and experience. They also must adhere to strict guidelines concerning how they conduct business.

Make sure that your potential lender/broker has a strong track record of providing mortgages for people like you in your area. This means that if you are buying an apartment building in an urban setting, it's important that he or she has done similar deals before--and has done them successfully!

Consider an adjustable-rate mortgage (ARM) if necessary

If you're a first-time homebuyer and want to buy a house, but don't have enough cash in the bank to cover the down payment, consider getting an adjustable-rate mortgage (ARM).

An ARM is similar to a fixed-rate mortgage in that it has fixed monthly payments over time. However, unlike with a traditional 30-year fixed rate loan where your interest rate stays the same for the duration of your loan term (30 years), with an adjustable rate mortgage (ARM) your interest rate can change after some period of time--usually after one year or five years depending on what type of ARM you get. This means that if rates rise during this period then your monthly payment will increase as well!

Pros: You get lower initial payments because they are based off of today's low rates; this allows more flexibility when making large purchases such as furniture or appliances, since these expenses can be paid off over time without impacting current cash flow too much. It also helps manage unexpected expenses like medical bills, without having them affect current budgeting decisions negatively.

Look into the cost of Homeowner’s Insurance

Once you’ve found your dream home, it's time to think about homeowners insurance. Insurance can be confusing and expensive, but it is essential if you want to protect yourself against unexpected events like theft or damage to your home.

The first step in understanding how much homeowners insurance costs is meeting with a professional. They will give you information on what coverage you can get that will help pay for repairs such as after a flood, which would be helpful if these occur in the area where you live. You should also check out any exclusions on what types of damage are not covered by their policies, as some won't cover certain types of disasters such as earthquakes, because they're considered acts of God rather than man-made events (and therefore ineligible for compensation).

Once you know what kind of protection is offered under their plans and what kind isn't included in its terms and conditions, calculate its total cost based on several factors: location (near fault lines?), age/style/condition of home (older homes are often less expensive), size/number bedrooms upstairs + basement level, etc.

Make sure to get preapproved for a loan first

Preapproval is the first step in the home buying process. It does not require you to put any money down, and it can be done without even looking at houses. If you're serious about purchasing a home, then it's worthwhile to get preapproved for a loan before starting your search.

It's important that you work with a lender who specializes in helping first-time homebuyers. They will understand your situation and know what questions to ask so they can give accurate information about what type of mortgage works best for you, based on your income level and debt ratios (debt-to-income ratio).

Conclusion

As you can see, buying a home is not as difficult as it may seem. The most important thing is to make sure that you are ready for this big step in your life and that you have done all of the research necessary so that everything goes smoothly when it comes time for closing. It is also very important to have the right Realtor on your side. I can help you with your home search, as well as finding you the best mortgage loan officer in Sonoma County. Reach out to me today to get started!