Buying a home can be an incredibly exciting process! If you’re embarking on this journey for the first time however, it can seem a little intimidating and even overwhelming. But fear not, first time home buyer–although there’s a lot to consider and several steps to take when buying a home, careful planning and educating yourself ahead of time can help make things go smoothly. 

Even if you’ve bought a home before, this post can help refresh your memory and maybe even open your eyes to new, positive changes that have taken place in the world of real estate and home financing. We’ll review some basic preparation tips that any home buyer can benefit from, plus give you a link to our handy home buying guide (which you can download for free).

So without further ado, let’s dive in and talk about what it takes to prepare for the home buying process.

Timing is Everything

Not everyone is in a position to just jump right into the home buying process as soon as they decide it’s what they want. Damaged credit, employment challenges or other roadblocks could make it difficult for would-be buyers to get a home they love at a price they want and with financing that works for them. That’s why it’s important to consider timing when you do decide to become a homeowner.

Is your credit in good shape? If not, it might be wise to spend some time working on building it back up so you’re more likely to get a great interest rate. Are you thinking about quitting your job soon or starting your own business? Mortgage lenders typically don’t like to see major changes to your employment status right before you apply for a loan. If you think you might be making changes to your income or your job, it may make more sense to wait until you are secure in the new position for a few years before you take out a mortgage.


Determining a home buying budget that is realistic and affordable is a key step in preparing for a home purchase. Although you may feel confident that you can get approved for a hefty mortgage amount, that doesn’t necessarily mean you can realistically afford it. That being said, these days mortgage lenders are much more strict about ensuring borrowers can afford the loans they offer–the 2007/2008 recession led to some major changes in the lending industry to protect both consumers and banks. Therefore, take some time to get down to the nitty gritty of your household budget, debts, bills, savings and other expenses. Our Home Buying Guide has a great worksheet that can help you figure out your budget step-by-step. This will help you have a working idea of what you can realistically afford, then once you become pre-approved for a mortgage, you’ll have official confirmation.

Getting a Mortgage

The mortgage process is another vital piece of the home buying puzzle, at least for buyers who don’t plan to pay for the home out of pocket (which is most buyers). Getting to know the steps involved in home financing, as well as the options available in today’s mortgage marketplace, can help buyers feel more confident when they start shopping for a loan.

Before you get a mortgage, you’ll likely want to get pre-approved. Pre-approval is not the same as pre-qualification, although the terms are often incorrectly used interchangeably. Pre-qualification is based on just a few pieces of financial information that the applicant provides to the lender. This information is not verified by the lender so the information could be inaccurate. With pre-approval (sometimes called credit approval), the lender receives more in-depth financial information and has an underwriter verify it for accuracy. The lender then provides a written document stating that the borrower is pre-approved to borrow a specified amount based on the information provided.

Another aspect of the mortgage process to consider is finding a loan program that suits your needs. The traditional 30-year fixed rate mortgage is very common; however, it’s not the only option out there and it may not be the best choice for everyone. Consider looking into other loan options like low and zero money down programs or Simple Access home loans (ideal for non-traditional borrowers).

Finding The Right Agent

A great real estate agent not only knows the business, but they are excellent communicators, great at listening to their buyers’ needs and concerns and can provide valuable insight and advice specific to your local market and your unique scenario. When selecting an agent to work with consider the following:

  • How many years’ experience do they have?
  • If they’re new to the business, can they provide professional references?
  • How long have they been working in the area?
  • Do they have a niche market such as investment property, foreclosures, luxury homes, etc.?
  • Are they affiliated with any professional groups such as the National Association of Realtors or the Residential Real Estate Council?

Let the Search Begin

Once you’ve hammered out the details of timing, budget, loan pre-approval and partnering with a great agent, you can begin the most exciting part of the process–hunting for the perfect home! It may be tempting to start your search first, but this strategy can be fraught with pitfalls. You might get attached to a home only to find out later that you can’t afford it. Or you may fall head over heels for a home and then discover you aren’t able to secure a mortgage at the rate or terms you prefer. Therefore, be patient and don’t neglect the preparation process. It can really pay off in the long run!

Once you are ready to start our house hunt, keep a few things in mind. First, your pre-approval letter. This is a document that essentially tells you what you can afford. This will help you narrow your home search and avoid the temptation to look at homes priced beyond your budget. Next, make a list of features that are “must-haves” and another list of “nice-to-haves.” This will help narrow your search even more and give your real estate agent a clear idea of what you’re searching for.

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