The Home Buying Checklist: The Ultimate Guide for 2024

Mortgage Dove

The Home Buying Checklist: The Ultimate Guide for 2024

Are you thinking about buying a home? Here's your chance to learn more. Buying a home is a decision that depends on your financial and personal circumstances.

Reality TV shows make buying a home look easy, but the process can be very complex. You'll probably make the most expensive purchase of your life, so it's normal to have questions, especially if you're a first-time home buyer. But there's good news: you don't have to feel overwhelmed.

Our home-buying checklist will help you successfully manage and complete every step of the process.


1. Find out how much home you can afford.

It is best to determine your budget before you begin your search. Doing so will give you a clear idea of your price range, and you can confidently begin your search. To determine your buying budget and set realistic goals, you should get preapproved early in the house hunt.

How to determine your true affordability of a home:

  • The debt-to-income ratio measures your monthly expenses versus your monthly income. The debt-to-income ratio includes all your monthly expenses divided by your gross income.
  • Whenever you consider your debts, include recurring obligations like student loans, auto loans, and child support payments - anything you pay monthly.
  • You need a DTI of at most 43 percent to qualify for most mortgages. However, be aware that this is only the "outside" number you can spend - not necessarily what you should pay.

Do you know what it means to be “house poor ”? As a result, you have so many expenses to cover that you won't have funds left over for other things, like eating out or traveling, or even the many costs accompanying your mortgage.

You'll need furniture, fresh paint, and plants for your new patio pots. Besides routine maintenance, consider large items such as a new water heater that may need to be replaced unexpectedly.

Your new home can be enjoyed with less financial strain if you budget a little more. This handy affordability calculator can help you get started.


2. Put aside money for a down payment.

A sizable down payment will help you save a good chunk of money over the life of your mortgage. Here's how you can do it:

  • You will not need private mortgage insurance (PMI) if you have a down payment of 20% or more. PMI is typically required with a down payment of less than 20%. PMI costs vary according to risk factors, such as your credit score and DTI. It is one expense that most homeowners want to avoid paying.
  • You will typically pay a lower interest rate if you make a more significant down payment because a lower loan-to-value ratio (LTV) is less risky for your lender.
  • Borrowers could save thousands of dollars over the life of the loan by making a large initial payment against the principal.
  • As your home loan balance decreases, your monthly payments will be smaller.
  • If you have a smaller monthly mortgage payment, you'll be more likely to qualify for a car loan, credit card, or other type of loan in the future.

A Few Savings Tips

If you know that you can save more over the life of the loan by having a more significant down payment, keeping a home won't be as painful. Here are some tips:

  1. Set up a budget: Saving money is difficult when you need to know where your money is going. Making life changes to save extra money is easy if you develop a budget and track your outflow.
  2. Create automatic savings: “Pay yourself first” is common wisdom. You won't even be able to see the money you're saving if you set up automatic savings through your bank account.
  3. Earn a side income: Whether it's tutoring children or delivering food for nearby restaurants, there are likely things you can do to earn some extra money. Taking advantage of this opportunity might also help you build your bank account 24/7 with some "passive income" opportunities.

By taking these steps, you can also increase your credit score, making getting a better mortgage rate easier.


3. Hire a reputable real estate agent.

Most home buyers find it valuable to work with a REALTOR or real estate agent, whether browsing online listings or attending open houses.

They can not only assist with scouting out potential houses but can also share their expert knowledge of the market. As a result of their expertise, they can assist you with:

  • An appropriate asking price
  • Comparing homes' pros and cons
  • Neighborhoods with high growth potential
  • Preapproval and mortgage applications
  • Bidding wars and negotiations
  • Closing documents and procedures

The right agent will help guide you through many of the later steps on the home-buying checklist because they are on your side. They will look out for your best interests, which will help you manage your emotions while buying a home.


4. Choose a lender and get a mortgage preapproval.

It can be helpful to shop around for mortgage lenders before you even start looking at houses. It may also help to hire a mortgage broker to do the shopping for you. In today's housing market, the seller wants to have confidence that you can buy the house if you make an offer, which is why you need to get pre-approved.

To get approval – and, ultimately, a lender – Mortgage Dove is an effective and easy way to do so. Their team pulls your credit report, determines a preapproval amount (at least tentatively), and helps you decide which type of loan (fixed-rate, conventional, etc.) and loan term or length (15 years, 30 years, etc.) is best for you.

When obtaining a letter of preapproval, you are not committing to one particular lender. It's in your best interest to consult with a variety of lenders to determine which loan is most beneficial to you.


5. Find your perfect home.

Buying a home can be a daunting experience for some people.

It would help if you also asked your real estate agent for advice. They can help you consider matters you might not have considered, like whether the house is in the right school district or has been on the market for a long time. If you want to get a better sense of your tastes and needs, search by visiting and checking out homes online.

A real estate agent can help you narrow your search once you have seen a wide range of homes by using listings from a multiple listing service (MLS), which tends to have more accurate and timely listings. The disadvantage of the MLS is that it does not include properties for sale by the owner.


6. Provide a smart purchase offer.

Choosing the right home and making a wise purchase offer is where a real estate agent can help. Consult with them before making an offer.

To determine the number of offers you will make, there are a variety of factors to consider:

  • Locally and nationally, how hot is the housing market
  • When was the house listed for sale
  • If the house has already been offered

If the housing market is slow, home buyers can get a small discount off the list price. If the housing market is more competitive, you might be rejected if you offer below the asking price.

A home purchase offer should contain more than just the price. You should also include terms, such as your timeline for moving into the home, and contingencies, such as whether you need to sell an existing home first.


7. Consult a real estate lawyer.

It is a good idea to have a real estate lawyer on hand if you are in a complex legal situation. Some states require real estate lawyers to be on hand.

Real estate lawyers can also help with existing tenants, easements, foreclosures, and short sales situations.

In addition to answering all these legal questions, a real estate lawyer reviews the purchase agreement, title documents, and other paperwork to ensure everything is in order. You might feel overwhelmed at this time, but the peace of mind you can gain from hiring a lawyer can be well worth it.


8. Get a home inspection scheduled.

Before making an offer on the house, it's only possible to judge some aspects of its integrity and fitness. That's where a home inspection comes in.

The home inspection cost is well worth it since you'll know how much "roof life" remains, whether the foundation is failing, and whether your electrical system is functioning correctly.

A home inspector can also reveal minor issues, which is common and isn't necessarily a reason to panic. If you signed an inspection contingency, you can use these issues as a bargaining chip to negotiate seller concessions or a reduced overall purchase price. If appropriate, check with your real estate agent – you don't want to nickel and dime a seller in a hot market.

Besides a general home inspection, you should consider other possible problems, such as radon or mold.


9. Get ready for closing.

Upon closing, assuming the inspection passes muster, you will want to make sure your finances are in order so that they will be liquid when closing costs are due. Additionally, you'll want to keep your credit score as good as possible by avoiding purchasing anything or changing your finances.

An independent third party will appraise your property during this waiting period. A buyer can ask the seller to lower the price or assume some closing costs if the appraised amount is significantly lower than the agreed-upon purchase price.

Buying homeowners insurance is another crucial step. You must present proof at closing if your home is financed with a mortgage. Also, this is a good time to do a final walkthrough.

Plan Your Renovations Now

You can shop around for contractors, painters, carpenters and other trade workers if you intend to ask the seller for repairs to your future home. It can be difficult to schedule this sort of work on short notice and takes time, so you'll appreciate the long lead time.


10. Complete the closing on your new home.

Get ready for the big day now. You'll sign many papers, but don't worry; you'll have time to review them before closing. You'll also need to bring some documents with you to the closing. You will need the following things: your mortgage lender and real estate agent can provide specifics such as identification, proof of insurance, and checks or cashier's checks.

If you need to know what you can afford and are unfamiliar with the steps of the home-buying process, house hunting can be stressful. Buying a house can be simple if you gather the proper documentation, find a real estate agent you trust, and figure out your financial and personal goals.

"Mortgage Dove makes home financing convenient for every American. You can count on us to provide a home buying experience tailored to your personal needs and financial situation. We strive to give you the peace of mind that your home financing goals can be achieved.”


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