About 75% of Americans claim buying a home is one of their top priorities. About 32% of Americans plan on purchasing a home within the next five years. Another 15% have purchased one in the past half-decade.

Unfortunately, the process isn’t always easy, especially for first-time buyers. 

With this home buyers checklist, you can make the process a little easier on yourself. This home buyers guide can help you plan for the road ahead. You can avoid any missteps that might impact your ability to buy a home, too.

Discover how to buy a house with these seven easy steps today. 

1. Pay Off Debts and Save

It’s important that you start with this step on your home buyers checklist as soon as possible. Most people don’t realize the expense involved until they start crunching numbers.

It’s true that your monthly rate will look cheaper than your current monthly rent. However, you need to consider upkeep and maintenance costs as well. You’ll also need to consider every expense of buying a home.

Sit down and start crunching the numbers with your significant other. Recognizing the expenses involved will help you maintain realistic expectations. It can also help you determine if you have the money for buying a home.

First, make sure you’re debt-free. Start paying off as many debts as possible, starting with ones with higher interest rates first.

Once you pay off your debts, try to remain debt-free, too. 

Next, start building your emergency fund. Build a nest egg for buying your home as soon as you can.

Become a savvy shopper this year, too. Try to find new ways to save money. Then, put those savings into your home-buying nest egg. 

2. Establish a Budget

Don’t start shopping around for homes just yet! After all, you don’t want to fall in love with a property, only to realize you can’t afford it. Instead, take the time to determine how much you can spend.

Determine your monthly budget, along with housing costs like HOA fees, taxes, and insurance.

Make sure the costs don’t exceed 25% of your current monthly take-home pay.

Consider working with an insurance company or real estate agent during this phase in your home buyers guide. They can help you calculate the cost of homeowner’s insurance and property tax rates.

With professional help, you can make sure you can afford to buy a home. If purchasing doesn’t suit your current budget, consider a rent-to-buy home instead. 

3. Prepare for a Down Payment

For some people, saving enough money to pay cash for the total price of a home isn’t realistic. Try to save for a down payment of 20% or more instead.

Having your down payment ready could help you avoid private mortgage insurance (PMI). PMI is added on top of your monthly payments. It could have a major impact on your overall budget.

You should also try to avoid low-to-no down payment mortgage options. For example, you might want to consider FHA loans and VA loans. Avoid adjustable-rate mortgages (ARMs) as well.

Instead, look into a fixed-rate conventional mortgage. Try to find a 15-year option with a 20% down payment.

This term will create a higher monthly payment. You can pay off your mortgage in half the time with a lower interest rate. As a result, you might save thousands in interest. 

4. Consider Closing

As you work through your home buyers checklist, make sure you’re considering closing costs as well. These expenses include:

  • Appraisal
  • Attorney fees
  • Homeowner’s insurance
  • Home inspection fees
  • A credit report check

Saving for these expenses ahead of time can help you avoid debt. Usually, these expenses equate to 3 to 4% of the final purchase price. 

You can work with a lender to calculate a more precise value.

Start saving for these expenses as soon as possible.  

5. Get Pre-Approved

Once you’ve saved enough to cover the closing costs and 20% of your home, contact a mortgage lender. They can help you gather the remaining 80%.

Try to get pre-qualified for a loan as soon as possible. If you’re pre-approved, sellers will realize you’re serious and capable.

They might choose you over other home buyers who didn’t think to get pre-qualified.

Your lender will first need to verify your financial information. They’ll review your income and taxes.

Then, they’ll need to submit your loan for preliminary underwriting.

Make sure you’re debt-free before undergoing this process! Lenders tend to prefer buyers who don’t have debts.  

If you’re unable to get approved for a loan or get denied due to bad credit, consider renting to own instead. You can learn more about the rent-to-own process here.

6. Start Searching

Once you’ve gained pre-approval, you can start the exciting process of looking at homes.

The majority of buyers find their homes online (51%). However, 34% choose to work with a real estate agent instead. Choose the option that suits your needs. 

Before looking at homes, make a list of your “wants” versus “must-haves.” You’ll have an easier time narrowing down your options once you list your priorities. Your real estate agent will have an easier time helping, too.

If you decide to work with a real estate agent, they can use the MLS to find homes that meet your criteria.

Look for homes that are within your price range and start exploring each neighborhood. Make sure you consider the property and the area.

Research nearby schools, venues, and crime rates, too. Otherwise, consider commute times. 

Start attending open houses or touring with your agent to find your dream home. 

7. Make an Offer

The last step on your home buyers checklist is often the most exciting. Once you find your dream home, make an offer. Receiving pre-approval can help simplify the process.

Consult your real estate agent to determine the best strategy.

If the homeowner accepts your office, you can start the closing process (which takes about 43 days).

Your Home Buyers Checklist: Start With These Steps Today

Working through this home buyers checklist is easier with a plan. Start working on these steps to learn how to buy a house. Remember, there are always alternative options if buying a home doesn’t work out.

Want to talk to a professional about finding a rent-to-buy home instead? We’re happy to help. 

Contact us today to find rent-to-own homes in Texas available near you.