5 Steps to Prepare for Buying a Home

January 04, 2022

If you are planning to buy a home, getting educated and organized before you start house hunting can help the homebuying process go more smoothly. From understanding the financial responsibilities of owning a home to finding a team of professionals to guide you along the way, these five steps can help you prepare to buy a home.

Couple reviewing their finances


  1. Understand the Expenses of Homeownership

    The financial obligations of owning a home go beyond saving for a down payment. As a homeowner, you will be responsible for many home-related costs, including:

  2. Get Your Finances in Order

    Before you start house hunting, you need to get a firm handle on your finances.

  3. Gather Your Documents

    Buying a home involves you providing many documents to your lender, and it’s helpful to get organized as early as possible.

    Your lender will need both personal and financial documentation to determine your eligibility for a loan. When applying for a home loan, you will need copies of:

    • Paycheck stubs.
    • W-2 forms.
    • Statements from all bank and investment accounts.
    • Statements for all outstanding debt.
    • Tax returns.
    • Proof of any supplemental income.
  4. Find Your Team

    You don't have to navigate the homebuying process alone. A trusted team of industry professionals can help you through the homebuying journey, as well as save you money in the long run.

    • A housing counselor can help you assess your financial situation, build or improve your credit, and ensure you're well-prepared for homeownership.
    • Your real estate agent will be with you through every step of the process to help you find a home that meets your location, size and price needs.
    • Your lender will evaluate your credit, finances and employment information to determine if you qualify for a mortgage and help you secure the best financing.
  5. Get Preapproved for a Loan

    Getting pre-approved for a mortgage from your lender will tell you the maximum amount you are qualified to borrow for a home loan. Keep in mind that you should only borrow what is comfortable for you and within your budget, making sure not to overextend yourself.

    Having a pre-approval letter allows you to search for a home with greater confidence and alerts sellers that you're a serious buyer.

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