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Homebuying checklist: What steps to take and when to take them

family moving into a new house
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Buying a home can be one of your most complex financial undertakings. Clarifying expectations and preparing your paperwork in advance can help to keep the process streamlined and on schedule. Here’s a guide for knowing what to expect and navigating the experience.

First steps: Getting your finances in order

Pull a credit check.

Your lender will want to run a credit check for a complete picture of your finances as a part of the loan pre-approval process. Doing so can empower you to look honestly at all of your finances and correct any errors in advance.

Apply for a mortgage pre-approval.

This process involves shopping for loans and will give you an idea of what types of loans and interest rates you qualify for and the ballpark budget you’ll want to consider.

Decide on a down payment.

Once you know the price range you’ll be shopping for a home, you can calculate what down payment you can afford. Remember that while the gold standard is 20  percent down, different types of loans accept a lower down payment.

Next steps

Your next steps will likely follow a straightforward path. As you begin shopping, here is what you can expect and what you’ll need to do.

1. Create a wish list

Determine what factors are important to you. Think about yard size, neighborhood and location, the school district, and access to amenities. Next, consider your deal-breakers. For guidance on building a helpful wish list, check out our article on what to look for when buying a house.

2. Find a real estate agent you can trust

Working with an expert real estate agent will ensure you have an advocate and authority to guide you through the buying process. Interview several people to find a good fit. You’ll want someone you are comfortable working with and attentive to the priorities you’ve identified in your wish list.

3. House hunting do’s and don’ts

Your real estate agent can guide you through shopping for a home, but there are specific steps you can either take or avoid to make the experience smooth.

4. Making an offer

Once you’ve found a home that meets your needs, falls within budget, and checks the necessary boxes on your wish list, it’s time to make an offer. Our guide for making an offer will help you through this process.

5. Getting a mortgage

There are many types of mortgage loans to suit different financial situations and life stages. Learn more about your options and what kind of loan may be best for your financial position.

6. Home inspection and appraisal

The inspection and appraisal are crucial in homebuying and can make or break your decision to close. Read more here about home inspections, appraisals, and the difference between them. Be mindful of the pitfalls and discuss the results with your real estate agent, who can alert you to any red flags. The appraisal will clear you for closing your mortgage loan.

7. Hire a real estate attorney

This step may or may not apply to your unique circumstances. A real estate attorney can handle specific legal matters that may be beyond the purview of your real estate agent. If there are issues related to the house’s title or you are buying through an LLC, this is a professional you’ll want to have in your court.

8. Get homeowners insurance

Most mortgage lenders will require you to insure your property. Aside from being mandatory for borrowing, this is a wise investment anyway. Visit our resource center on homeowner’s insurance to learn more about the average costs you can expect, types of policies, and information on how to save costs in this area.

9. Close on your new home

Closing is the final and most exciting step in the purchasing process. You’ll sign legal documents and get the keys to your new home at closing. Expect to have a checkbook ready– you’ll likely need to bring money for closing costs.

Stay organized and enjoy the process

Purchasing a home can be daunting and, at times, stressful. Remember that your real estate agent is there to help you each step of the way and answer your questions. Stay organized throughout the process and educate yourself about the lending and inspection processes.

Many high-quality, free resources are available online, including Bankrate’s home purchase information. In addition, companies like Nolo (legal) and others (financial) can help to break down concepts and explain complex terms in plain English. Finally, the more you research in advance, the more empowered you will be throughout the process.

Once you’ve closed on your new home, enjoy your new living space and make it your own!