Buying a home for the first time can seem overwhelming and exhausting while even at times frustrating. Knowing the steps can help you breeze through the process. Here are some wise financial decisions and home-buying advice you can implement right away to get you started on the road to homeownership.

The first tip I give you is to check your credit report about 12 months out. Pull your credit score from all 3 reporting agencies (Equifax, Experian, and TransUnion). Always be sure to check your report for any errors, and past-due accounts that have been placed in collections.

If you need to repair your credit, concentrating on debt repayment and maintaining low credit card balances is an excellent place to start. Keep in mind that the better your credit score, the lower your mortgage interest rate will be.

Additionally, you should make sure that you pay all of your bills on time because missed payments may lower your credit score. Your available credit, including credit card limits, overdraft protection levels, and any other credit lines you may have, as well as how much of that credit you are currently utilizing, play a significant role in determining your credit score.

6-8 months out you want to think about a budget. How much can you afford in ongoing expenses after you’ve bought your home? The three main monthly costs of homeownership are the mortgage, insurance, and property taxes, but you’ll also have to pay for utilities and maybe HOA dues. It’s also a good idea to set aside some cash on a regular basis to handle maintenance and unforeseen problems.

Another great tip is to consider your needs and wants. Begin this process at different times during the day and night this will help you decide what you like and don’t like in neighborhoods. It can take longer than you think to find the perfect address and location, so start exploring areas as soon as possible.

Now is a good time to specify your preferences for the house itself along with the neighborhood. What kind of home are you seeking? What are you willing to give up? What are the stumbling blocks? Consider the aspects of your present home that you enjoy; this can help you make a list of your requirements and wants.

2 months out, you can determine whether now is a good time to lock in your rate by comparing mortgage rates from various lenders and mortgage types. It’s also a good idea to concentrate on all of the mortgage’s terms, not simply the rates you’re being quoted. What late fees are there? What is the anticipated cost of closing? Is there a fee for early payment? Will you receive a better deal if you can obtain a mortgage from the bank where you currently have accounts?

Get pre-approved. Once you have chosen a lender preapproval is a formal letter from a lender outlining the exact amount of credit they will offer you, as opposed to prequalification, which is a prediction of the size of the loan you might be able to acquire.

When you submit an offer to purchase a home, having a preapproval will provide you a significant advantage. It will also make the process easier once your offer has been accepted and you are ready to submit your loan application.

Now look for down payment assistance. There are numerous first-time homebuyer and down payment aid programs, including at the municipal, regional, and federal levels, that can help cover your down payment or closing fees.

First-time homebuyer programs by state
First-time homebuyer grants

The next stage for a first-time home buyer is to work with a real estate agent when they have their finance sorted out and a preapproval letter in hand. You can get advice on market conditions and if the homes you wish to make offers on are priced fairly from an experienced real estate agent who is particularly familiar with the area you’re trying to purchase in.

1 month out, put contingencies in writing. Be specific about any conditions that will allow you to back out of the deal when you identify a problem. These can involve your mortgage approval failing or the home inspection finding expensive concerns. You will have a way out if the transaction doesn’t go as anticipated and will also obtain your earnest deposit returned provided these parameters are specified in writing with deadlines.

Before closing, acquire quotes from contractors for any repairs or improvements the house might require if there is a problem.
One last thing to keep in mind, you don’t want to make any last-minute large purchases before closing the deal on your home. You don’t want to be buying a new car, hiking up store credit cards, etc. You don’t want to do anything to risk having your loan declined at the last minute.

Even with a preapproval for a mortgage, nothing is guaranteed. Just before closing, lenders examine your credit, bank accounts, income, and job to make sure you can still make the payment. Completion accounts, making significant purchases, taking out new credit lines, or even just opening new ones can all delay or prevent the closing of your loan.

Following these few simple pointers can help lessen the stress for first-time home buyers.
Happy home hunting!