HOW TO PREPARE TO BUY A HOME

As everyone knows, a house is not an impulse purchase; you can't just waltz in and declare "I'll take it!" Long before you get to making that offer (on paper, through your real estate agent)—and even before going to your first open house—there are a ton of things to do and to prepare. Overwhelmed? Here's a checklist of everything you need to do to get ready to buy a home.

Check your credit score

Do not pass "Go," do not start browsing homes until you have checked your credit score. This is the number that mortgage lenders will look at to determine whether you are “creditworthy,” and thus dictates the rates you will get. The higher your credit score, the lower your interest rate—and that’s what you’re going for. Get a free copy of yours at AnnualCreditReport.com to see where you stand.

Clean up any credit blemishes you can

Any surprises on that report? Credit errors are more common than you might think, so contact the credit bureau to correct any erroneous information. Got credit that's less than stellar? Check our Credit Karma for a free way to help you navigate ways to improve your credit scores. 

Figure out how much home you can afford

Next, make sure you are clear on how much you can afford. Contact our preferred lender to help you determine your monthly mortgage payment, adjusting for variables such as the size of your down payment, your mortgage type, and current interest rates. 

Secure mortgage pre-approval

Once you've found the mortgage that's right for you, you'll want to show sellers that you have what it takes to buy their home. In hot markets, a pre-approval is almost required for a seller to take your offer seriously. That’s because it spells out exactly how much a lender has agreed to loan you, thus assuring the seller that you’re both willing and able.

Save up for a down payment

-Cut that languishing gym membership—at $50 per month, you'd save $600 a year. Go running instead!

-Packing lunch will save you about $60 a month—or $720 a year.

-Bike to work. For a 10-mile commute, biking can save you around $5 a day, according to Kiplinger—or $1,250 a year.

-Start a coin jar. Saving all your loose change can have a big impact—up to $700, according to financial blogger J.D. Roth.

-Turning down your thermostat just 3 degrees could shave almost 10% off your electrical bill, netting you $20 a month on a $200 bill, or $240 a year.

-Curb those dinners and drinks out at restaurants, which can quickly add up. If you typically shell out $40 three times a week, reduce that to one evening a week, and you'll save $80—or $4,160 per year. (Bonus: It'll make those times you do indulge more special!)

Visit open houses

Poring over online listings is one thing; seeing the properties in person is quite another. Take advantage of open houses as a low-stress way to visit several homes in one day. Map your strategy in advance, and while you’re in each home, take photos and notes so they don’t all run together in your mind. (Now, which one had the in-room fireplace again?)

Check out the hood

You’ve undoubtedly heard the adage “location, location, location.” What that essentially means is that you’re not just buying the property you’re looking at; you’re also buying into the whole neighborhood. That’s why you have to be certain that it has the vibe you want. Savvy home buyers know that the best way to find out more about the neighborhood is to meet the neighbors and then visit at various times of the day and night to see what it’s really like.