How To Prepare To Buy Your First House: Follow These 6 Steps

April 17, 2019 by Elisha. This post may contain affiliate links. 60 Comments

When I bought my first house I was so excited. It definitely wasn’t a choice I took lightly. You have to be ready to be a homeowner.

Do you feel you have matured enough to handle the responsibility that comes with managing and owning a house? Are you planning on living there for at least 5 years? Are you prepared for the financial changes that come with homeownership?

Once you have answered these questions and you know the answer in your heart of hearts you are ready to buy your firsts house—what’s the next step? How do you actually prepare to buy a house?

As a homeowner myself and a former mortgage processor these are some of the steps you should consider when approaching the decision to purchase your first home.

1. Educate Yourself With A First Time Homebuyer Program In Your Local Area

Take a free course in your community on homeownership to help educate and familiarize yourself with the entire process of buying a house. A class like this actually helps when you are completely new to the entire home buyer journey. A one day class like this truly helped me when I bought my first house.

In order to qualify for some mortgage loans, it’s a requirement that you take a homeowner education class. Most cities offer this service for free and some charge a small fee. Basically in the class you learn how the home buying process works from beginning to end.

Check online, community centers and your local library for information about such classes offered in your area.

2. Work On Improving Your Credit and Raising Your Credit Score

Start working on your credit very early in the game. Like 2-5 years before you make the decision to buy your first house. However, that rule can be bent a little if your credit score is in pretty good shape already.

You want it to be around 650 or above.

Of course, the best way to improve your credit is to eliminate debt. Another way? Pay your creditors on time.

A secret to increasing your credit score fast is to use your credit card every month then pay it in full at the end of the month. Repeat this process for at least 6 months to see the increase in your score

3. Save For The Down Payment Plus Various Other Expenses

A nice size down payment does wonders for lowering your initial monthly payments. In addition, if you are able to save 20% of the purchase price you can avoid PMI payments all together.

In addition to saving for your down payment also save money for the earnest pay (deposit you will need to hold the house), closing cost, moving expenses and any other expenses that may pop up before the closing.

Related: 8 ways to save for a house

Related: 10 ways to save

4. Get A Mortgage Payment Equal To Your Rental Payment or As Close As Possible

Most people are excited to get pre-approved for a mortgage. This tells them what they are qualified for and they are elated.

Now just because you are preapproved for a $300,000 loan doesn’t mean you have to go out and buy a $300,000 house. The bank said you can afford this. But, only you know what price truly fits your budget.

The best way to determine a good monthly payment is by looking at your current monthly rental payment. Whatever you pay in rent make sure you get close to that or lower for your house payment. Don’t forget to account for escrow—your taxes and insurance that will be added onto your mortgage payment.

You can search for a house on your own or ask your realtor for a listing. Which takes us to the next step.

5. Research Realtors And Real Estate Agents To Find The Best Fit For You

Researching a realtor can be intimidating. What do you look for? Do you already know someone? Ask around, ask family and friends who they have used. Maybe someone will come highly recommended.

Another way to find a good realtor…check your mailbox. Before I bought my house, I was living in an apartment and I received direct mail (post cards, newsletters, etc.) from realtors all the time. I found my agent that way and she turned out to be the best fit for me.

You can always google realtors in your area or visit realtor.com.

Furthermore, you will need a lender, inspector, appraiser, attorney and a few others I may be leaving out. Obtain your own if you like but, usually the realtor has connections and can help.

6. Find A Mover And Other Last Minute Prepping

Look for a mover early. However, be mindful that your closing date can change. Buying a house involves tons of paper work and a number of people working together in different areas of the buying process.

More likely than not something will come up at the last minute and your closing date will be pushed to the next month or couple of weeks. So, just keep this in mind when scheduling a mover.

Definitely start packing early and prepare to arrange to have your utilities transferred over. Remember to inform your rental office/landlord of your moving date. When possible you may want to switch to a month-to-month lease. This way you won’t have to break your lease or move out before your closing date and not have a place to live in the interim.

Closing

These steps cover most of what to expect when you’re in the process of buying your first house. I have mapped them out to make a giant journey a little easier to follow.

I hope they turn your dream of homeownership into reality.

Add in any additional prepping you think you will need personally. Write up a plan and go. Make it happen. You got this!