Getting Ready to Buy a Home: Where to Begin

Scrolling through listings is fun, and it is a natural place to start dreaming. But buyers who do a little groundwork before they tour homes tend to have a smoother, less stressful experience. Think of it as setting the table before the meal. Here are the steps that make the biggest difference.

Get Your Finances Ready

Buying a home touches nearly every part of your financial life, so this is the place to begin.

• Check your credit. Pull your credit reports, look for errors and get a sense of your score. Paying bills on time and bringing down card balances can help your score improve over a few months.
• Build your savings. You will need money for a down payment and closing costs. How much depends on the loan. Some programs allow as little as 3% down for eligible buyers on a conventional loan, 3.5% on FHA with a 580 or higher score, or even $0 down on VA loans for those with full entitlement.
• Plan for ownership costs. Property taxes, homeowners insurance, maintenance and possibly association dues all come with owning. Keep a cushion for repairs so a broken water heater does not become a crisis.
• Look at your monthly budget. Decide what payment feels comfortable, not just what a lender may approve. Our mortgage calculator can help you test different price points.

Talk to a Lender Early

Getting pre-approved before you start touring is one of the most useful things you can do. A loan officer reviews your income, assets, debts and credit and lets you know how much you may be able to borrow. The resulting letter is not a final loan approval, but it tells sellers you are serious and ready to move.

Pre-approval helps you in other ways, too:

• You learn your realistic price range before you fall in love with a home.
• You discover which loan programs may fit, from conventional to FHA or VA.
• Much of your paperwork is already gathered, which can help the full application move faster once you are under contract.

If you are new to the process, our first-time home buyer page covers the basics, and you can compare loan programs to see how they differ.

Build a Wish List That Works

Once you know your budget, define what you are looking for. A simple way to organize your thinking is to sort features into three groups:

1. Must-haves: the things you truly cannot live without, such as a certain number of bedrooms, a reasonable commute or a particular school zone.
2. Nice-to-haves: features you would love but could compromise on, like a pool, a second living area or a newer kitchen.
3. Deal breakers: anything that rules a home out, such as a busy road, major foundation concerns or an association with rules that do not fit your lifestyle.

Writing this down keeps you focused when you are standing in a beautifully staged living room and tempted to overlook a long commute. Share the list with your partner, family or anyone else involved in the decision so everyone is on the same page.

Bring in Your Team

Buying a home is a team effort. Along with your loan officer, you will likely work with a real estate agent, a home inspector, an insurance agent and a title company. Give your agent your wish list and budget so they can focus on homes that truly fit. A good agent will also help you spot issues you might miss and give honest feedback when your list and your price range do not line up.

Taking these early steps can turn a stressful process into an exciting one. When you are ready to talk about pre-approval, reach out to FLO Mortgage and one of our loan officers will help you get started.

This article is for general education and is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines and program availability. FLO Mortgage, Company NMLS #1835856. Equal Housing Opportunity.