If you’re a first-time homebuyer, here’s a simple-to-follow checklist.
1. Financial Assessment
a) Income Verification
- Calculate total monthly income from all sources
- Gather two years of W-2s and tax returns
- Document any side income or freelance work
- Keep recent pay stubs (last 30 days)
b) Credit Check
- Get credit reports from all three bureaus
- Check credit score (minimum 620 for conventional loans)
- Identify and resolve any credit issues
- Avoid opening new credit accounts
c) Savings Review
- Calculate total available funds
- Determine down payment capability (3.5-20%)
- Set aside closing costs (2-5% of loan amount)
- Build emergency fund (3-6 months of expenses)
2. Pre-Purchase Education
a) Loan Types
- Research conventional loans
- Understand FHA loan requirements
- Explore VA loan eligibility
- Learn about USDA rural housing loans
b) First-Time Buyer Programs
- Research state-specific programs
- Check city/county assistance options
- Investigate down payment assistance
- Look into tax credits
3. Mortgage Preparation
a) Documentation Gathering
- Last two years’ tax returns
- Recent pay stubs
- Bank statements (2-3 months)
- Investment account statements
- Rent payment history
- Gift letters if receiving help
- Employment verification letter
b) Pre-Approval Process
- Research multiple lenders
- Compare interest rates and fees
- Submit pre-approval applications
- Understand pre-approval versus pre-qualification
- Get pre-approval letter
4. Budget Planning
a) Monthly Payment Calculation
- Principal and interest
- Property taxes
- Homeowners insurance
- Private Mortgage Insurance (PMI)
- HOA fees if applicable
- Utilities estimate
- Maintenance fund (1% of home value annually)
b) One-Time Costs
- Down payment
- Closing costs
- Home inspection
- Moving expenses
- Initial repairs/updates
- Basic furnishings
- Emergency repairs fund
5. House Hunting
a) Location Research
- School district quality
- Crime rates
- Property tax rates
- Flood zones
- Future development plans
- Commute times
- Local amenities
b) Property Features
- Size requirements
- Number of bedrooms/bathrooms
- Yard size
- Parking needs
- Age of major systems
- Energy efficiency
- Storage space
6. Offer Process
a) Market Research
- Compare recent sales prices
- Understand market conditions
- Calculate maximum offer
- Plan negotiation strategy
b) Offer Components
- Purchase price
- Earnest money amount
- Contingencies
- Closing timeline
- Included items
- Repair requests
7. Home Inspection
a) General Inspection
- Foundation
- Roof condition
- Electrical systems
- Plumbing
- HVAC system
- Windows and doors
- Insulation
b) Specialized Inspections
- Radon testing
- Termite inspection
- Lead paint (pre-1978 homes)
- Asbestos check
- Mold inspection
- Water quality
- Septic system if applicable
8. Insurance Requirements
a) Coverage Types
- Standard homeowners policy
- Flood insurance if required
- Additional hazard coverage
- Personal property coverage
- Liability protection
9. Policy Setup
- Get multiple quotes
- Choose deductible amount
- Set coverage limits
- Understand exclusions
- Plan payment schedule
10. Final Loan Processing
a) Rate Lock
- Understand lock period
- Monitor interest rates
- Lock at appropriate time
- Track lock expiration
b) Final Documentation
- Updated pay stubs
- Recent bank statements
- Explain large deposits
- Source of down payment
- Insurance proof
- Additional lender requests
11. Closing Process
a) Pre-Closing Steps
- Review Closing Disclosure
- Schedule final walk-through
- Prepare closing funds
- Get cashier’s check/wire
- Arrange homeowners insurance
- Schedule utilities transfer
b) Closing Day
- Bring proper identification
- Review all documents
- Get copies of everything
- Receive keys
- Record deed
- Transfer utilities
12. Post-Purchase Tasks
a) Immediate Actions
- Change locks
- Copy all keys
- Set up security system
- Register warranty items
- Take photos for insurance
- Store important documents
b) Administrative Tasks
- Update address:
- Driver’s license
- Voter registration
- Credit cards
- Bank accounts
- Insurance policies
- Online accounts
- File for homestead exemption
- Plan property tax payments
Note: Requirements and specific steps may vary by state and local jurisdiction. Consult with real estate and mortgage professionals for requirements in your area.
