First-Time Home Buyer Checklist

The mistake most people make: jumping to house hunting before their finances and paperwork are bulletproof. Lenders reject applications because of surprise debt, credit score drops, or missing documents—after you've already found "the one." Get your foundation solid first.

Phase 1 — Financial Foundation (3–6 months before applying)

• Check your credit score: Get free reports from annualcreditreport.com (federal requirement). Aim for 620+ to qualify; 740+ unlocks best rates. Dispute errors immediately.
• Pay down debt: Lenders calculate your debt-to-income ratio (DTI). Aim for under 43% DTI. Paying off car loans or credit cards now reduces your monthly obligations and strengthens your offer.
• Build savings: Collect 3–20% down payment (depending on loan type) plus 2–5% for closing costs. A 20% down payment avoids private mortgage insurance (PMI), saving $100–300/month on a $300k loan.
• Don't make large purchases or open new credit: Each hard inquiry or new account tanks your score 5–10 points. Wait until after closing.

Phase 2 — Paperwork & Pre-Approval (2–3 months before)

• Gather documents: Last 2 years of tax returns, last 2 months of pay stubs, 2 months of bank statements, employment verification letter (from HR), list of debts and monthly payments.
• Get pre-approved (not just pre-qualified): Pre-approval means a lender has verified your finances. Pre-qualified is just an estimate. Pre-approval is your power in offers.
• Shop multiple lenders: Compare 3–5 banks, credit unions, and online lenders. Rates vary 0.25–0.5% (= $25k–50k over 30 years on a $300k loan). Bundle hard inquiries within 14 days to minimize credit hit.
• Choose a loan type: FHA (3.5% down, easier qualify), VA (0% down, if eligible), Conventional (5–20% down, often better long-term), USDA (0% down, rural areas). FHA has lower upfront costs but higher PMI.

Phase 3 — Home Search & Offer (2–4 weeks)

• Hire a real estate agent: They're free (seller pays commission). They know comparable sales, neighborhood trends, and negotiation tactics you don't.
• Get a home inspector before you commit: Budget $300–500. Catches foundation issues, roof age, electrical hazards that cost $5k–50k to fix after purchase.
• Order a title search: Confirms the seller owns the house and there are no liens. Done by your title company (part of closing).
• Make an offer contingent on financing and inspection: Protects you if the appraisal comes in low or major repairs surface.

Phase 4 — Closing (30–45 days after accepted offer)

• Final walkthrough: Verify repairs promised in the offer were done. Check that appliances/fixtures stay if negotiated.
• Review closing disclosure: Lender sends this 3 days before closing. Compare loan terms, interest rate, closing costs to your pre-approval offer. Don't ignore discrepancies.
• Bring ID and cashier's check for down payment + closing costs: Wire transfers are common but confirm with your escrow agent (never wire before they confirm the account).
• Sign documents: 15–30 pages. Ask what each one does. Don't rush.
• Get homeowner's insurance: Lender won't close without it. Lock it in before final walkthrough.

Quick Checklist (Print & Check Off)

• Credit score checked: ___
• Debt paid down to DTI <43%: ___
• Down payment + closing costs saved: ___
• Documents gathered: ___
• Pre-approved by lender: ___
• Offer accepted: ___
• Home inspected: ___
• Title search ordered: ___
• Homeowner's insurance locked in: ___
• Closing disclosure reviewed: ___
• Closing completed: ___

Pro tip: Request a lower interest rate 1–2 days before closing. Market shifts happen; lenders re-quote if rates drop. A 0.125% cut saves ~$40/month on a $300k loan.