16 Tips for First-Time Homebuyers in Portland

You're a first-time homebuyer. You have a million questions. And you don't really know who to ask or where to even begin. 

Don't sweat it! We've worked with a ton of people exactly where you are now. Here are our top 16 tips for getting started as a first-time homebuyer in Portland.

See also: Curious about buying a home in Portland? Here's what you need to know.  

1. Don’t obsess over a 20% down payment.

A lot of first-time homebuyers think a 20% down payment is a golden rule for getting in their first home. But the truth is, you don’t have to drain your savings or wait forever to save up for a down payment.

A conventional loan allows you to put down as little as 3%. Like the benefits of an FHA loan? You can put down as little as 3.5%! The best thing you can do is have a chat with your real estate agent to find out what’s possible… 

2. Find a real estate agent who specializes in first-time homebuyers… 

Speaking of real estate agents, find one who specializes in first-time homebuyers that can guide you through the process without overwhelming you. You'll have a million questions throughout the process, and that's okay! Your real estate agent should be patient, knowledgeable, and, most importantly, your fiercest advocate.    

3. …And a real estate agent you actually like!

You will be calling, texting, and spending a decent amount of time together. Make sure you partner with someone you don’t mind hanging out with. 

4. Start building the relationship early.

Reaching out to a real estate agent doesn’t lock you into anything. A good agent understands it’s your timeline, not theirs. They are just there to answer questions and advise, so don’t feel bad about asking for help!

5. Get pre-approved as soon as possible.

If you even think you might be ready to buy a home, go ahead and get pre-approved. The Portland housing market moves FAST. Your pre-approval shows sellers you're serious and helps you move quickly should something perfect pop up. Plus, it's best to know exactly what you can afford before you go around falling in love with houses.

Keep in mind that a good lender can do a soft credit pull with zero impact on your credit. That way, you can work up custom numbers and you don’t have to worry about a credit hit if you decide to wait after having an initial lender consultation.  

6. Claim all of your income on your taxes. (Including tips!)

Your lender has to see your actual income to figure out how much you can borrow. That means claiming everything (even cash tips) on your taxes. I know it’s tempting to keep a little off the books here and there, but claiming more actually works in your favor. 

The more income you report, the stronger your financial profile looks. It can lower your debt-to-income (DTI) ratio, which is one of the key factors lenders use to calculate your pre-approval amount. A lower DTI ratio shows you have more income relative to your debts, making you a less risky borrower.   

7. Don’t freak out about mortgage insurance.

You’ve probably seen some scary numbers if you’ve ever Googled mortgage insurance. In reality, it’s not that bad. 

For example, for a $500,000 house with a small down payment, your mortgage insurance might be as low as $85 a month—not hundreds like some sites make it seem. 

A good lender will break this all down for you. But for now, here are a few things to understand about mortgage insurance:

• It’s temporary: Once you hit 20% equity in your home—whether by paying down your loan or through your home appreciating in value, mortgage insurance can go away. Some loans even let you buy it out upfront or refinance to eliminate it later. 

• It’s a tool, not a penalty: Think of mortgage insurance as a stepping stone—it’s what allows you to buy a home without needing that fat down payment. 

• You’ll still come out ahead: Even with mortgage insurance, owning a home helps you build wealth over time. The small extra payment each month is an investment in your future!

8. Avoid any other big purchases during the buying process.

Play it safe with your credit score during the buying process. Don’t go out and buy a new car or make another expensive purchase, as this could affect your DTI ratio and make it harder for you to get pre-approved. 

Keep in mind that this only applies to financed purchases. If you’ve got cash on hand and can afford the big purchase, go for it. 

9. Be flexible!

You likely won’t find a home that checks every box. That’s why it's important to figure out where you can compromise. 

Prioritize your must-haves — number of bedrooms, distance to work or school, a yard for your dog, and so on. Try to keep the list short and realistic. 

Then, decide where you can bend. Maybe you’d love a modern kitchen, but you’re okay with a dated one if the location is perfect. Having some flexibility really opens up your options. 

10. Consider a duplex.

Buying a duplex (or another multi-family property) is one of the smartest ways to get into real estate investing with less money upfront. By living in one unit and renting out the others, you qualify for owner-occupied financing—which means you can buy with as little as 5% down instead of the 15%-20% typically required for investment properties.

Then, when you’re ready to move out, you can keep the property as a full rental, using the income from both units to cover expenses or grow your cash flow. Even better? You’ll still qualify to put only 5% down on your next home purchase, giving you more flexibility to upgrade while building your real estate portfolio.

11. Don’t underestimate your buying power.

Homeownership might be closer than you think. A lot of buyers psych themselves out by assuming there is no way they could afford a house, but when they sit down with a lender, they’re often pleasantly surprised. It doesn’t hurt to start the conversation and find out what’s possible. 

12. Commit to the process.

Testing the waters is fine at first, but when you’re serious about buying a home, you need to go all in. Stay engaged with the process and be communicative with your real estate agent. Don't take time off from searching. If your dream home hits the market, you need to be ready to pounce!

13. Old houses have old house problems.

There are a lot of charming old houses in Portland with character and history. But they can also come with challenges. 

Aging systems, maintenance surprises, structural quirks — these are all part of the old house “package.” This definitely doesn’t mean you should avoid old homes, it just means going in with eyes wide open. 

Remember, a real estate agent who knows the ropes will help you understand what you’re dealing with (and whether the charm is worth the challenge). 

14. Don’t wait until ‘after the holidays.’

That’s what everyone says… which is exactly why the holiday season can be a great time to buy a home. When most people hit pause on their home search to focus on holiday plans, you’ll have less competition to worry about. 

15. There is no perfect time to buy a home.

Just keep in mind there’s no “perfect” time to buy a home. Competition might be lower in the winter and around the holidays, but there are fewer houses on the market. In the warm, sunny months, the situation is reversed. 

Don’t wait around forever on lower interest rates, either. Trying to time the dip perfectly is nearly impossible. And even if rates are lower in three years, home prices will almost certainly have increased. 

Just remember that your situation matters more than the market. If you can afford the monthly payments and are ready to take on the responsibility, that’s your signal to move forward. 

16. Your first house is not your forever house.

Your first house doesn’t have to be your forever house—and honestly, it probably won’t be. It doesn’t have to be perfect. It just has to be a good fit for where you’re at in life. 

That said, you’ll want to try to stay in your first home for at least 5 years. Selling a home comes with costs that can eat into your profits if you sell too soon. But staying for five or more years gives you time to build equity and make the investment worthwhile.

Key takeaway: You’re in a better position than you think as a first-time homebuyer. 

Forget (most) of what you heard about the challenges of being a first-time homebuyer. With the right team behind you, the process is a lot easier than you think. 

If you’d like to get more information on what to expect during the process, feel free to reach out. I’m ready to chat when you are!