Buying a House Checklist: 15 Things to Consider

Rose Morrison

Dec 28, 2022

buying a house

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Do you have a dream house checklist? What about a checklist for steps to buying your first home?

Buying a house is an exciting time. If you’re a recent graduate, it may be your first real home. Suppose you have a larger family. You may want to upgrade to a larger space. Also, if you’re now working remotely, you have more flexibility to move. 

Whatever the reason, purchasing a house can be a complex process. There are multiple things to consider. Here is a buying a house checklist you should follow.

1. Prepare Financially and Emotionally 

Buying a house is a big financial investment. The first step is to understand how much you can afford. Using a home affordability calculator can help you determine your budget. Search online sites, like Zillow or NerdWallet, to find these resources. The tools ask for information such as your income. 

Another thing you should determine is your debt-to-income ratio. It’s all your monthly payments divided by your monthly income. In many cases, you need to have a lower than 43% ratio to qualify for a mortgage. Determining a budget up front prevents you from overspending. 

Also, have these finances saved up before purchasing the home. In addition, check your credit scores. Having a higher score can help you get a lower mortgage. Paying bills on time and lowering debt will improve your credit score. 

Along with financial readiness, you want to be emotionally prepared. Buying a home is a big commitment that comes with outside stress, like maintenance. Also consider if it’s the right time by determining your long-term goals. For example, are you starting a family? Then a larger space may make more sense. However, if you may have to relocate for work sometime soon, it is best to wait. 

2. Determine How to Pay For the Down Payment 

Saving for a down payment is a critical item on the buying a house checklist. A downpayment is an upfront cost using all cash. So, you want to figure out how much of a down payment you can afford. Many homeowners make a 20% down payment.  

The down payment impacts the kind of mortgage you qualify for and how much money a lender will give you. For example, a larger down payment may lower your interest rates. However, it’s important that you still stay on budget. You’ll  still need to have money set aside for expenses down the line, such as closing costs. 

There are also first-time buyer programs if you need more financial assistance. For example, CHFA lender is a program for those in Connecticut. 

3.  Build a Wish List

Once your finances are in order, you can figure out your must-have items. For example, do you want a detached house or an attached unit? If you want a backyard and your own space, a single-family home is a good option. 

Suppose you prefer less maintenance. A condo or townhouse may be better. It’s also important to determine how many rooms you want. For example, if you like to entertain, an extra bedroom is essential.

Another important factor is location. Take a chance to look around the neighborhood. Is it close to your work? Also, if you have kids, finding a well-established school district is critical. 

Here are some more items you should consider when buying a house:

  • The size of the house
  • The number of floors
  • The amount of storage space
  • The outdoor features
  • The quality of kitchen utilities and appliances 

4.  Take Out a Loan

The type of mortgage you select impacts your qualification for a loan. Choosing the right loan can help you get approved faster. However, there are multiple types to choose from. 

Some are backed by the government, such as FHA loans, and are easier to qualify for. Although, they may have stricter requirements for mortgage insurance. To be eligible for an FHA loan, you must have a credit score of at least 580 for a 3.5% down payment.

Here are some of the other loans available:

  • Conventional loans: These are not guaranteed by the federal government and offer lower down payments. 
  • VA loans: They come from the Department of Veteran Affairs and are for military members. 
  • Jumbo loans: Jumbo pans are for properties more expensive than the lending limit. They often need larger down payments and higher credit scores.
  • Renovation loans: These allow you to wrap the cost of home improvements into the total amount of the loan. 

5. Remember to Get a Mortgage Pre-Approval

Once you find the right loan, start shopping for mortgage lenders. You can choose to form a variety of companies, such as a traditional bank or credit union. 

First, ensure the lender offers the type of loan you want. Then compare the company’s sample rates to today’s mortgage rates. It’s also important to ask about what closing costs you have to cover. 

You can find this information on the website or talk with a loan officer.  Speak with multiple lenders and compare rates to find the best deals. In addition, read the fine print carefully. Make sure you have a good credit score before seeking approval. 

Work with a mortgage lender to determine your budget. The pre-approval can give you concrete numbers to estimate your monthly expenses. Also, a mortgage pre-approval can provide you with an edge over the competition. 

6. Work With a Real Estate Agent

Working with a real estate agent makes the home buying process less stressful. They know the ins and outs of the market and can help you find your dream home. You want to  interview multiple agents. Ask friends who have recently bought a house for referrals. It’s also a good idea to ask for references and research potential candidates. 

7. Consider a Real Estate Attorney 

The paperwork can seem a little confusing at first. A real estate attorney can help look over purchase agreements and title documents. They can answer any legal questions you have. So, while an attorney adds an extra expense, it can give you peace of mind. The average cost of an attorney is $220-$250.

8. Shop Around

This is one of the fun steps on the buying a house checklist. It’s when you search for houses online or go to open houses. Online sites like Zillow and can help you find properties. The sites allow you to search based on features, like location and price range. 

Looking around will help you figure out what you want. It can also help you discover things you don’t want in your home. During the tours, take photos of the property.

9. Place an Offer on the House

Once you find your dream home, it’s time to make an offer.  During this stage, a real estate agent can help. They can provide information about sales prices for other comparable properties. They may even supply more information about what the seller wants. Also consider other factors, such as how long the house has been on the market. 

To make an offer more competitive, be flexible with your move-in date. Also, consider preparing an escalation clause, which can increase your chances. The clause means that your offer will outbid any others. Paying in cash can also make your offer stand out. However, it’s not all about money. Writing a personalized offer letter can sway the sellers. 

Along with the offer, you’ll need to put down an earnest money deposit. The money will stay in a third-party account until the offer is accepted. Consider paying a higehr earnest money depost to make your offer stand out. 

10.  Take Out a Mortgage 

Start by selecting a mortgage lender. You can go with the one who pre-approved you or someone else. Try using your local bank or credit union. When comparing lenders pay attention to things like interest rates and fees. 

The mortgage process involves lots of paperwork. Mortgage lenders are trying to assess if you can afford to pay them back. They look at factors such as your income and credit score. 

Here are a few of the major documents you may need:

  • W-2 forms
  • Pay stubs
  • Federal income tax returns
  • Recent bank statements
  • Social security number 

After the paperwork is submitted, an underwriter will finalize the process. They will dig deeper into your finances and look at the home you selected. 

11. Apply for Homeowners Insurance

Homeowners insurance is important to protect your house from unexpected damage. It covers expenses for the home’s structure and your personal belongings. It also protects you if someone is injured on your property. Some lenders may want you to have insurance before securing a mortgage. Shop for homeowners insurance on insurance company websites. 

You can also work with licensed insurance agents. State insurance agencies are other valuable resources for finding coverage. Before selecting a plan, understand what is and isn’t covered. For example, most coverage plans don’t include damage from flooding. So, you may also want to take out flood insurance. 

12. Get an Appraisal 

A home appraisal is mainly for the lenders who don’t want to pay more than a house is worth. The assessment determines the market value of the home. It reviews the houses you’re looking at, and comparable houses sold recently. Usually, the lender chooses the appraiser, but you pay. An appraisal typically costs around $312-$419. 

13. Get the Home Inspected 

A home inspection can ensure there aren’t any surprises down the line. A home inspection examines all areas of the property, from the foundation to the roof. Inspectors look at systems such as heating and plumbing. 

Home inspections could catch any repairs that may need to be done, like updating the siding. If you’re worried about specific issues, like mold, get specialized inspections. You can choose an inspector and will cover the expenses. 

Suppose you notice any issues that weren’t in the seller’s disclosure. You can negotiate with the seller and ask them to pay for the repairs or lower the asking price. 

14. Negotiate Credits With a Seller

Most items are finalized in an offer letter, but you can still make a few negotiations. Suppose some repairs came out of the home inspection. You may want to ask for credit rather than the seller to fix the repairs. 

This can help move the transaction along, which can be helpful in a fast-paced market. Then you’ll have some extra cash at closing and can hire the right people to make the repairs.

15. Close On the House

This is the final step in the buying a house checklist. There are multiple documents during the closing stage. The lender must provide you with the closure document three days before closing. Compare it with the loan estimate to see if any costs have changed. The paper also ensures you know how much you will need for the closing. 

Here are a few more closing documents: 

  • The mortgage note
  • The deed
  • Deed of trust 
  • Title documents 
  • Transfer of tax declaration 

You’ll also walk through the house with the real estate agent. It’s your final chance to ensure everything is as agreed upon. 

The Perfect Buying a House Checklist 

As you get ready to move into your new home, it can feel both exciting and stressful. There are many steps to this process. Follow this ultimate buying a house checklist for a successful move-in. 

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