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.
Have you thought about how overwhelming homebuying can feel? This checklist is super helpful for first-timers! Don’t forget to connect with a reliable real estate agent for insights and consider joining some workshops for added confidence. It’s an exciting journey, and you’ve got this!