If you’re on the hunt for your first home, you’re sure to have a lot of questions. From budgeting to understanding the paperwork to finding the right house, the process can be overwhelming. But the good news is that you’re not alone. Buying a house is one of the most important investments you will ever make, and it’s important to be informed and prepared throughout the process. In hopes to ease some of the stress with buying your first home, we have compiled a 12-month checklist on what to expect when making this investment. As always, if you have any other questions feel free to contact us!
12 Months Until Move-In
Check your credit score: Get a free copy of your credit report through Equifax, Experian, or TransUnion. Look for errors in your report and correct any of these mistakes. Be sure not to check your score long before you’re planning to make an offer as your score can always fluctuate.
Determine how much you can and want to afford: When setting a budget, it’s good to keep in mind that lenders usually look for a debt-to-income ration no more than 43% of your gross monthly income. This ration includes things like your future mortgage, car or student loans, or revolving credit cards. There are also plenty of online calculators to help you determine this number.
Think about your down payment plan: the FHA offers loans with only a 3.5% down payment however, we highly recommend that you put down 20%. This higher down payment helps get rid of unnecessary fees like mortgage insurance while also providing a better interest rate.
9 Months Until Move-In
Prioritize what you most want in your new home: Focus on your priorities! Location, floor plan, number of bedrooms/bathrooms, back yard size are all qualities you should consider when looking into homes. You will have a much easier time if you compile a wants vs needs list. What are your deal breakers?
Research neighborhoods and start visiting open houses: Using different property listing sites to research cost of living, different neighborhoods, or public transportation to see what kinds of homes fit your wants/needs and budget. This is our expertise!
Budget for miscellaneous home-buying expenses: Buying a home comes along with several different costs. Some you should be aware of are a home inspection, title search, or property survey. Although they aren’t too expensive these costs do start to add up, so we recommend having a couple hundred dollars saved up as these costs arise.
Start a home maintenance account: Something to also think about is life after buying your first home. Maintenance for the house is bound to come up so it’s a great idea to start putting away money for this as well!
6 Months Until Move-In
Collect loan paperwork:
- W-2 forms (2-3 years)
- Personal tax returns (2-3 years)
- Your most recent pay stubs
- Credit card and all loan statements
- Addresses for the past 5-7 years.
- Brokerage accounts statements for most recent 2 – 4 months
- Most recent retirement account statements (401k)
Research lenders and REALTORS®: Start researching, contacting, and interviewing realtors. Your agent and lender are going to be your biggest asset throughout this whole process!
3 Months Until Move-In
Get pre-approved for your loans: First you will need to get preapproved for a mortgage. Set up an appointment with your lender or mortgage broker, bring all your paperwork, and they will run a credit check which tells you how much of a loan you are approved for. Determine a budget accordingly.
Start shopping for you new home: Once you have been preapproved you and your agent will be able to find homes that meet all your needs while also staying in your determined price range.
2 Months Until Move-in
Make an offer on a home: Normally, it takes around four to six weeks to close on a home. Meaning if you have a set move-out date you may want to allow some leeway before finalizing on this date.
Get a home Inspection: Once you have made an offer and it has been accepted, you should start looking into a home inspection. This step is crucial in finalizing the deal and could potentially delay closing. The sooner, the better!
1 Month Until Move-In
Triple-check that all your financial documents are in order and review all lending documents before closing: You’re almost there! Review the mortgage documents with you agent to make sure everything looks right.
Get insurance for your new home: You will want to secure insurance before finalizing the deal and closing on a property. You will need to proof of this insurance to close.
Do a final walk-through: Make sure your new home is in the condition you and the seller agreed upon.
Get a cashier’s check or bank wire for cash needed at closing: Make sure to get the exact amount of cash needed for closing. Regular checks are not accepted!
Move In Day
Congratulations You Just Bought Your First Home!