Before You Buy

Home Buying Checklist

Check Credit and Budget

Before looking into a mortgage and a home, you should be sure to check your credit score. There are a variety of resources you can use to view and improve your credit. This will have a large impact on the quality of loan you will be able to obtain. Generally speaking, the better your score,  the more favorable the terms of your loan. With these factors in mind, you can use an online mortgage calculator to determine your month-to-month costs. Make sure to include money needed for down payments, closing costs, and other fees. Twenty percent is the most common down payment, but there are other options, as low as 3%. Make sure to connect with an experienced home loan expert to help walk you through your options.

Figure Out What You Can Afford

It’s a good practice to budget no more than 30 percent of your gross monthly income to home expenses and to try out the financial obligation prior to signing your mortgage. Calculate the difference between current home expenses and projected home expenses, then deposit the difference into a savings account on a monthly basis. This will give you a good idea of what your mortgage will feel like and allow you to make adjustments before the commitment.

Save for Down Payment, Closing Costs

While situations and programs vary, a down payment is somewhere between 3 and 20 percent. Closing costs can vary based on where you live and the type of mortgage. Make sure to consult with your lender, so you can have an idea of what you’ll need to budget. Closing costs can sometimes be covered by the seller upon negotiation. It would also be of benefit to search for down payment assistance programs, which are frequently available for first-time home buyers. Other programs may be available by location.

Build Up Your Savings

You should be saving above what you need for closing and down payment costs. You will be a much more attractive prospect to a lender when you have a hefty savings to cushion your mortgage payments. Above that, you will need to have savings in order to prepare for potential home maintenance costs. We recommend budgeting between 2.5 to 3 percent of your home value for maintenance costs, annually. If you’re buying a $200,000 house, that means $415 – $500 a month in savings.