First Time Homebuyer’s Checklist
Making the decision to purchase your first home is exhilarating, but the process can be trickier to navigate than you may expect! It can be tempting to jump right into searching for your dream home and hiring a decorator, but there are many things you need to consider before the fun part begins; here is the first time homebuyer’s checklist to help you on your journey!
Your home is probably the most expensive thing you will ever buy, so you definitely need to make sure your financial ducks are in a row.
Check your credit score
Visit annualcreditreport.com for your free report from the three credit bureaus: Equifax, Experian, and TransUnion. Check it carefully for any errors and get to work fixing any mistakes that could result in a higher loan rate.
Determine how much house you can really afford
Long-term costs to consider include not just the mortgage and interest, but also property taxes, homeowner association fees, maintenance and utilities. If you are used to renting a small apartment, these costs may not be on your radar. Upfront costs such as a home inspection, title search, property survey, and home insurance should also be factored in. Using an online calculator can easily give you a good sense of what you can afford.
Plan how you will pay for the house
Will you take out a fixed-rate mortgage or an adjustable-rate mortgage?
Make a down payment plan. Some lenders require 20%, but many offer 0% down-5% loans. Always check with your local lenders first before going with national mortgage providers to ensure your secure the best rate for your area.
Check out the U.S. Department of Housing and Urban Development (HUD) for a list of nonprofit homebuying programs by state.
Find out if your employer has an assistance program.
Gather your mortgage loan paperwork
Make an appointment with your lender or mortgage broker and get pre-approved for your loan. You’ll need to bring:
- W-2 forms — or business tax return forms if you’re self-employed — for the last two to three years
- Personal tax returns for the past two to three years
- Your most recent pay stubs
- Credit card and all loan statements
- Bank statements
- Addresses for the past five to seven years
- Brokerage account statements for the last four months
- Retirement account statements, such as 401(k)
Where Do You Want To Live?
It’s all about location, location, location! Scout out exactly where you want to live and prioritize what is most important.
Create a checklist of space-related must-haves for your family
Big backyard for kids and pets to play?
Ample closet space?
Extra rooms for guests?
Open floor plan?
Tons of storage?
Research neighborhoods with property listing sites like realtor.com
What is the cost of living?
Is it a safe neighborhood free of crime?
Are the homes well taken care of?
Is there a neighborhood watch program?
Are the streets well lit?
How close are convenience and grocery stores?
Is there public transportation?
What is the school district like?
Work with a reputable realtor
Start interviewing buyer’s agents. They will advocate on your behalf to find the best property in your price range, negotiate with the seller’s agent, make an offer and guide you through the closing process, protecting against any potential pitfalls. Make sure you vibe with them and that they are in tune with your specific needs.
Congratulations, you’ve found your dream home!
Now you’re in the home stretch!
- Your realtor will guide you through making an offer and deciding what conditions you want to ask for. They will present it to the seller’s agent, who will either accept it as is or counter-offer. You can accept or go back and forth until a deal is reached. Keep in mind that once an offer is accepted it typically will take six weeks to close.
- Get a home inspection to make sure there is nothing that needs major repair and will delay closing. You absolutely need to have a professional inspect the property for quality, safety, and overall condition so you don’t get stuck with a money pit!
- Carefully review the mortgage documents with your agent. Don’t be afraid to ask a million questions until you are confident you fully understand the terms.
- Make sure to secure home insurance and bring proof to the closing
- Do a final walk-through of your new home a few days before closing, to make sure it’s in the condition you and the seller agreed upon.