Buying a home is daunting, even if you’ve done your homework. From making a wish list (and a more realistic “must have” list), to getting a mortgage and finding the right real estate agent, the process takes time and patience. To cut down on stress and help navigate the complex road to buying a home, follow this step-by-step checklist, which is broken down into the five main phases of the buying process.

RESEARCH AND PREPARATION

1. Make a wish list and a reality checklist in order to balance your housing needs and wants. Figure out what you want in your next home (everything from the neighborhood to the type of kitchen countertop, number of bedrooms and size of backyard) and what you need (everything you can’t live without). In other words, you might want four bedrooms, but absolutely have to have three.

2. Decide where you want to live by researching different neighborhoods and the home prices in those neighborhoods. Don’t forget to research other factors that could influence your quality of life, including school districts and distance to your family, friends, house of worship and work.

3. Check your credit reports and credit scores. Pull copy of your credit report and scores from each of the three national credit reporting agencies. Carefully comb through your credit reports to make sure the payment history, balance amount and account age are correct for each of your credit lines. You’ll also want to double check that your personal information—such as your name and address—is accurate, and that all negative credit information has fallen off your credit reports after the appropriate amount of time has elapsed. Determine if there are steps you could take to improve your scores, such as paying off or paying down debts, lowering your credit utilization, etc. And finally, remember that errors on your credit reports could translate to lower credit scores, which may mean you’ll dish out more in both interest and fees on a home loan. If you find errors that could negatively impact your scores, file a dispute.

FINANCING

4. Figure out how much you can afford to spend—comfortably. Most mortgage lenders agree you can spend between 28 and 36 percent of your gross monthly income on all of your monthly debt payments (called “total debt service”). This means that your mortgage principal and interest payments, real estate taxes and homeowners insurance premiums, along with your other debt payments such as a car loan, student loans and personal loans, shouldn’t exceed 36 percent of your gross monthly income. If your household earns $60,000 per year, that’s $5,000 per month (gross monthly income), so no more than $1,800 each month should be used to pay for your mortgage, taxes, insurance and debt payments.

5. Evaluate the total cost of homeownership. Your total cost of homeownership will consist of more than your monthly mortgage payments, real estate taxes and homeowners insurance premiums. You should also add some extra cash for regular home maintenance and unexpected repairs, like blacktopping the driveway every year or a blown water heater.

6. Decide how much money you can put down. The standard down payment is 20 percent of the home’s sale price, which will allow you to buy a home without private mortgage insurance (PMI). But there are other mortgage options that will allow you to put down much less.

7. Organize your financial paperwork. Before applying for a loan, you’ll need to get all of your paperwork in order, including copies of your W-2, savings, checking and retirement account statements, proof of any additional assets and loans, as well as your personal tax information. If you are self-employed, you’ll need much more paperwork, including a current year profit and loss statement and tax returns for yourself and your business for the last two years.

8. Determine which type of mortgage is best for you. Different types of mortgages are available for homebuyers, including fixed-rate mortgages, adjustable-rate mortgages and, occasionally, interest-only mortgages. You’ll also need to decide if you qualify for a conventional loan, a low down payment loan or a government-backed loan, like FHA, VA or USDA.

9. Check your credit reports and credit scores, again. Review your reports and scores, especially if you disputed errors. Check your reports to see if the errors have been removed and the impact on your scores. If you opened new credit accounts, your scores could be impacted. And remember new information is consistently added to your reports, and that information could impact your scores. Your scores will determine the interest rates lenders will offer you. Pull copy of your latest credit report and score from each of the three national credit reporting agencies.

10. Shop around for a mortgage. Speak with at least five different types of lenders, such as a bank, credit union or mortgage broker to make sure you are getting the best loan at the best rate. (Don’t be afraid to negotiate with each lender in order to get the very best deal.)

11. Apply for your mortgage. Depending on what’s happening in the mortgage market, a mortgage approval could take several weeks. And once you’re approved, it could take six to 10 weeks to close.

PUTTING TOGETHER YOUR HOMEBUYING TEAM

12. Connect with a reputable real estate agent. While the Internet can help you kick off your home search, nothing beats the experience—especially in your favorite neighborhoods—that comes with a seasoned real estate agent. Be sure to interview at least three agents from three different firms.

13. Visit numerous homes for sale. Your real estate agent can help you understand the relationship between price, condition and value in the neighborhoods where you are looking.

14. Identify homes in your top neighborhoods that meet at least some of your wants and most or all of your needs. If you are not finding what you are looking for, go back to step 1 and refine your wish list and reality checklist in light of what is available in your neighborhood of choice at your price point.

15. Assemble the rest of your homebuying team. Your real estate agent can help you put together the rest of your team, which should include a home inspector and insurance agent and may also include a real estate attorney.

MAKING AN OFFER

16. Understand your maximum offer for each prospective property. Your initial offer should be based on how much other homes in the area have sold for. But understand what your limit is so you don’t wind up falling in love with a house you can’t afford.

17. Negotiate, if necessary. If your first offer is declined by the seller’s team, be prepared to make a counteroffer—or walk away if the deal is no good.

18. Secure a home warranty. If you are buying a new home, ask the developer to provide a new home warranty. There are also warranties for previously owned (also known as “existing”) homes.

19. Get your would-be home inspected. Within the timeframe of the inspection contingency, be sure to have a professional conduct a home inspection. A home inspector will spot defects in the building’s structure and systems, including the roof, plumbing, and heating and cooling systems.

TAKING THE FINAL STEPS

20. Prepare for the move. Schedule movers, pack and set up utility accounts at your new house. Don’t forget to shut off your utilities at your old residence as of the morning of your move.

21. Close on your home. The closing is where cash (in the form of a mortgage plus the good faith deposit and any additional cash necessary) is exchanged for the keys to the property. Make sure you buy title insurance (both an owner’s and lender’s policy).

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