1. Make sure you’re (really) ready
- You have a stable job.
- You can see yourself living in the same town for the next five to ten years.
- You’re prepared for the extra work that comes with homeownership.
2. Create your home wish list
- Determine what’s most important to have right now – e.g. location, number of bedrooms, a yard.
- Check out different neighborhoods, home styles and listings online to get a feel for what’s most important to you.
3. Figure out what you can afford
- Request your credit report from all three credit bureaus (Equifax, Experian, and TransUnion). Fix any errors right away.
- Determine a down payment amount (ideally 20 percent to avoid paying private mortgage insurance).
- Calculate how much you’ll need in an emergency fund (for unexpected maintenance or repair costs).
4. Gather necessary documents
- Collect proof of employment, including pay stubs and past tax returns.
- Print out bank and investment account statements from the past 30 days.
- Compile your previous addresses and current landlord’s contact information.
5. Research mortgages
- Request quotes from multiple lenders and comparison shop for loans.
- Get pre-qualified for a loan (many sellers won’t even consider a bid unless you’re pre qualified).
- Obtain a pre-approval letter (requires a credit and background check, but it can make you a stronger candidate).
6. Assemle your team
- Find a real estate agent you trust and communicate well with (check out agent profiles on Zillow and Trulia).
- Ask a friend or family member for second opinions as you go through the buying process.