The home-buying process may be a bit overwhelming for those who are shopping for their first home; they don’t know what to expect yet. However, there are plenty of resources to help you out, including your Realtor.
12 Months Before
- Check your credit score. The three credit bureaus (Equifax, Experian, and TransUnion) are required to give you one free credit score per year. Sometimes there are mistakes, (and that’s why you want to request your credit score so far ahead of time) so be sure to check for these.
- Figure out what you can, and want to, afford. Lenders usually want to ensure your debt-to-income ratio, which includes your mortgage and all other debts, is not higher than 43%.
- Ensure what you can pay for the down payment. There are various plans and loan types available, so don’t feel too scared to figure it all out.
9 Months Before
- Make a checklist of priorities you want met in your new house. If you can keep these at the front of your mind when you start searching for a home, you’ll be able to weed out what you don’t want, and communicate what you do want with your Realtor better. If you’re making these decisions with a partner or spouse, be sure to establish the things that each of you won’t bend on, and also the things that you can compromise on. It could become a point of contention later on, if it’s not established early in the game.
- Research areas, neighborhoods, school districts, etc. (But don’t forget that your Realtor will know all of this info too as well!)
- Start saving for extra home-buying expenses. Buying your first home might present more miscellaneous costs than you previously thought, so be aware early on. Also, It’s always beneficial to have extra money set aside for emergencies or unexpected needs that may arise. Create a home maintenance funds account for that.
6 Months Before
- Gather your paperwork for the loan. This will include your W-2’s and personal tax returns from the past 2-3 years, bank statements, your most recent pay stubs, credit card and loan statements, addresses from the past 5-7 years, and most recent retirement account statements (like a 401K.)
3 Months Before
- Get pre-approved. Meet with your lender, and he/she can inform you of how much you can afford, after looking at your credit score.
- Meet with your chosen Realtor. Once you discuss the amount you were pre-approved for and what you want in a house, you can start shopping for your first home together.
2 Months Before
- Make an offer on a house. It usually takes around 4-6 weeks to close, so this will give enough wiggle-room just in case.
- Get a home inspection. Anything that is discovered unexpectedly can delay closing, or at least make things a bit more complicated in terms of costs.
One Month Before
- Ensure all your financial documents and lending paperwork are correct, and in perfect order.
- Get home insurance, and bring proof of it to the closing.
- A couple days before closing, do a final walk-through to make sure everything looks the same as agreed upon.
- Make sure you have the required funds to bring to the closing, such as wired money, cash, or a cashier’s check.
Congratulations on your new home!