Ultimate Home Buyer’s Checklist
A Step-By-Step Guide to Purchasing a Home in One Year
Buying a home can be overwhelming. From getting pre-approved for your loan to closing the deal, there’s a lot of steps that go into finding your dream home. So where do you begin? Take a look at this simple step-by-step guide to purchasing a home in only 12 months and avoid common mistakes that most first-time home buyers are privy to:
12 Months Before You Buy a House
Check your credit
- Before applying for a mortgage, it’s beneficial to know your credit score. Get your free credit report at annualcreditreport.com or check with credit bureaus like Equifax, Experian, and TransUnion.
- Check your report for accuracy and dispute any errors if necessary. Incorrect credit scores can lead to higher loan rates.
- The higher your credit score, the better loan you’ll qualify for and the more money you’ll save in the future.
Track your budget
- Figure out exactly how much you can afford on your new home. One of the first steps to getting your finances in shape to buy a home is tracking your income and expenses each month. Use the next year to budget and save for your dream home.
Create a savings strategy
- The thought of a down payment may seem daunting, but it doesn’t have to be. Start saving early so you can pay off the down payment on your mortgage and save money with a better interest rate.
- Keep in mind that the funds in your bank account should be stable 60-90 days out from applying for a loan.
9 Months Before You Buy a House
Create a home buyer’s wishlist
- Before looking at homes, prioritize your home wants and needs to figure out what’s really important. If you are making this decision with other people, take the time to work out any potential differences you may have.
- Consider the following: neighborhood, location, size, style, and layout
Visit open houses
- The best way to find out what you want or don’t want in a home is to see some properties with your own eyes. Contact realtors, browse through online listings, research neighborhoods, and visit open houses to get a better idea of what kind of homes you can afford.
Keep on saving
- Continue lowering your debt and saving for miscellaneous expenses (i.e. home inspections, insurance, maintenance repairs, unexpected emergencies). Saving a little bit now can go a long way in the future.
6 Months Before You Buy a House
Gather your loan paperwork
- Have the following items ready to go to make the mortgage process even smoother:
- W-2 forms (or business tax return forms) the last 2-3 years
- Personal tax returns for the past 2-3 years
- Most recent pay stubs
- Credit card and loan statements
- Bank statements
- Addresses for the past 5-7 years
- Brokerage account statements for the most recent 2-4 months
- Most recent retirement account statements, such as a 401(k)
Find a real estate agent and mortgage lender
- Buyer’s agents and mortgage lenders will be your best friends throughout the home buying process. They can help you find the right property, conduct negotiations, and create solutions to financing your dream home.
3 Months Before You Buy a House
Get pre-approved for a mortgage
- Make an appointment with your mortgage lender to find out what kind of loan you qualify for. Don’t forget to bring all the paperwork you collected.
Edit your budget
- Look at your original budget and savings strategy then make the necessary changes. Take into consideration your new mortgage payments, upcoming fees, and expenses.
Go house hunting
- Once you’ve been pre-approved for your mortgage and altered your budget accordingly, you can finally choose a new home that fits within your price range.
2 Months Before You Buy a House
Make an offer
- Give yourself a minimum of 4-6 weeks to close a deal on your ideal home.
Order a home inspection
- After your offer is accepted, hire a home inspector to look at the property before closing. Keep an eye out for things like: mold, damp basements, and plumbing issues.
1 Month Before You Buy a House
Review all documents
- During this final month, double check to make sure all your financial documents are ready to go. Mortgage documents can be confusing so contact your agent for help.
Acquire home insurance
- Take the necessary steps to secure insurance because you’ll need proof before closing.
Perform a final walk-through
- In the last few days leading up to closing, do a final-walk through to make sure everything is in order and ready to go.
Get the cash needed for closing
- At closing, you’ll need the exact amount of cash or a cashier’s check, so give yourself a few days before closing to get that prepared.