First-Time Homebuyer Checklist

Make Buying Your First Home a Reality with These Steps

Download the Freedom Mortgage First-Time Homebuyer checklist for a helpful hard copy and check out even more detail about each step in the article below

Buying your first home is an exciting milestone. It can also be complicated because there are many steps you'll take along the path towards homeownership.

This first-time home buyer checklist will guide you through the basics. The specific details of your transaction will vary depending on your situation, but here are some general tasks you'll likely need to do.

The home-buying checklist is broken down into parts to make it easier to find the tasks to complete various phases in the home-buying process.

1. Prepare to Buy

Your “buying a house” checklist begins with early preparation because there are many things to accomplish before actually purchasing a home. These tasks help you ensure eligibility for an affordable mortgage and find the right property that meets your needs.

Here's what you should do to get started:

• Save money: Do your best to save enough money for a down payment, closing costs, and other homebuying expenses. Saving for these expenses now will help you more accurately know which homes you can best afford.
• Review your credit report: Know your credit score and make sure that your credit reports are accurate. You can get a free annual credit report through AnnualCreditReport.com. This is important because lenders will consider your credit in deciding if you are eligible for a loan and what rate you will pay.
• Research neighborhoods: Check out communities where you may want to buy your new home. Location impacts property values and potentially your happiness in the home, so finding the right place to focus your home search is essential.
• Make a wish list: Compile a list of features you want, including the type of home, its age and condition, the number of bedrooms and bathrooms, a yard, a garage, local schools, commuting distance, public transportation, shopping, community safety, and more. This will help you narrow your property search and allow you to see if there are homes that meet your needs within your budget.
• Get prequalified: Prequalification can help you estimate the price of homes you can afford and avoid spending time looking at properties that are out of your price range. It also makes it faster to get approved for a mortgage when you find a property to buy. You can get prequalified online with Freedom Mortgage.

2. Shop for a Home

The next part of the home-buying checklist focuses on shopping for a home. There are typically many properties available for sale. It usually takes time and effort to find one that meets your needs and is affordable.

Here are the best steps to take when looking for your new house.

• Search online: Most homebuyers begin their search online. You can see what homes are for sale, review their features, look at photographs and videos, and more. Searching for homes online will give you a sense of what is available in your desired area and within your price range.
• Go to open houses: Visiting homes in person is the best way to decide which homes you want to buy. These also give you the chance to conduct an initial, personal home inspection. Open houses both help you find properties you are interested in and help you to understand what kinds of homes are available in your price range and desired location.
• Work with a real estate agent: A real estate agent can help you find homes, prepare offers, negotiate with sellers, and avoid issues when you close. Working with an agent allows you to get professional advice throughout the process so you can make more informed choices and maximize the chances of getting the home you want.

3. Make an Offer

The next part of the home buying process checklist is to make the offer. Getting an offer accepted by a seller is the only way you can purchase a home. You should make sure your offer protects your interests; while also encouraging the seller to accept it so you can move forward with the buying process.

Here are the steps involved in making an offer.

• Choose a purchase price: Once you find a home you want to buy, you'll need to offer to buy it for a fair price. Choosing a purchase price is the most important part of your offer because it determines what amount you will pay for the property.
• Consider contingencies: These are conditions that need to be met before the sale closes. You can make your offer contingent on the results of the home appraisal and property title search, the house passing an inspection, and more. Contingencies protect you because they ensure you don't have to go through with buying if the home turns out to be worth less than expected or if there are major problems with the home's condition.
• Include earnest money: Your offer should include a cash deposit (usually referred to as “earnest money”) that shows that you are serious about buying the home. This payment is also called a “good-faith deposit.” Including an earnest money deposit makes it more likely that a seller will accept your offer since the deposit protects them and ensures you can't just walk away from the transaction for no reason.
• Provide prequalification and proof of funds letters: You can make your offer stronger by including documents that prove that you can afford to buy the home. Sellers want to verify that you have a mortgage company willing to work with you before they change the status of the home (so it is no longer an active listing).

4. Apply for a Mortgage

Any checklist for first-time homebuyers should include a section on getting a mortgage. While some people pay cash for houses, most people borrow -- especially first-time buyers who don't have profits from the sale of a prior house to use for their purchase.

Here are the steps involved in applying for a mortgage that belong on your first house buying checklist, so you are prepared for the borrowing process:

• Complete an application: You'll need to fill out a mortgage application and submit it to your chosen lender to begin the mortgage approval process. You can't get a mortgage without submitting a formal application, so this is a necessary step if you're borrowing to buy your home. You can learn more about how to apply for a mortgage to get this process underway.
• Provide income and financial documents: Your lender requires you to submit current copies of documents that verify your income, assets, debts, and credit. This is always required to get approved for a home loan because lenders need to check your financial credentials to approve your mortgage.
• Sign disclosures: To move forward with your loan application, all borrowers will need to sign the loan disclosures that your lender sends to you. Lenders are required to send these disclosures (so you know your rights), and you are required to sign them to show you have received them and been informed about your loan.
• Understand home appraisals and title searches: An appraisal determines the fair market value of the home. A title search confirms that the seller is the legal owner of the house and that there are no liens against it. Both are necessary to ensure the home is valuable enough to serve as collateral for the mortgage and to ensure you will own it free and clear.
• Get a home inspection: A home inspection looks for problems within a home's structure, its electrical, plumbing, and mechanical systems, and much more. You should get an inspection to make sure the home is structurally sound with no major issues that affect its value.
• Shop for homeowners insurance: Lenders require you to put insurance in place when you buy a home since the home is collateral for the loan. It's important to make sure that there is insurance money available in case of damage or destruction so the home can be repaired or rebuilt.

5. Close on Your New Home

The final steps on your first-time homeowner checklist focus on closing on your home. This is the last step in the process as ownership officially changes hands during closing.

Here's what's involved in closing on a property and becoming the new owner:

• Close your loan: Once you've been approved for a mortgage, you'll need to attend the closing. This is where you sign the papers that make the transfer of ownership official. Find out what you can do to avoid delays in closing on your mortgage.
• Pay closing costs: Closing costs often include lender fees, discount points, taxes, and insurance. You may need to pay some of these costs via wire transfer at the time of closing. You also may be able to roll some of these closing costs on to your mortgage amount. Paying closing costs is required to close on your loan, as your lender requires these fees and expenses to be paid to release the mortgage funds to the seller.
• Get your keys and move in: Now you're ready to move into your new home, and your home buyer checklist items have been completed. Don't forget to include moving expenses within your homebuying budget.

Final Thoughts: Stay on Track with a First-Time Homebuying Checklist

As you can see from this first-time home-buying checklist, there are several important steps to take towards becoming the owner of your own property.

Don't panic, though, as your real estate agent and mortgage loan provider will help you complete everything on the checklist for purchasing your perfect home.

Contact Freedom Mortgage today to connect with a mortgage loan professional to get started.