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The First-Time Homebuyer’s Essential Checklist


If you’re in the process of buying your first house, you’re in for a memorable time. As exciting as this can be, though, you might also feel a little stressed and overwhelmed. That’s why it’s vital to make a plan to help ensure everything goes smoothly from A to Z. Your focus can then be more on the experience.

It’s always important to know your stuff — especially when making what’s likely the biggest purchase of your life. Luckily, you can access so much information to help you get set up correctly. Here’s an essential checklist for first-time homebuyers that should make things go smoothly.


Step 1: Calculate Your Budget

You can’t buy a home without money. The average person has to take out a loan to buy a house, so it’s not like you need £250,000 cash — but you do want enough to cover your down payment. You also might require a few hundred pounds for related fees.

The budget you create will indicate how much house you can afford. This figure should encompass what total monthly payments make sense for your situation. Can you manage a £1,200 mortgage with £100 for water, heat and electricity? Remember that you also need to pay for home insurance and property taxes. 

Take a hard look at your financial situation. You should calculate the debt-to-income ratio for your household so you know what mortgages are available to you. If you feel like you aren’t ready to get a loan, you can take steps to boost your savings.


How to Save Enough Money

It’s essential to make sure you have a substantial savings account. A part of increasing your savings is paying down your debt. If you can eliminate your credit card debt, you’ll be better off financially. Actions like earning more money and reducing certain expenses will help. For example, you can:

  • Sell furniture you don’t need.
  • Pick up a side gig.
  • Look for better phone plans, car insurance and other monthly expenses.
  • Eliminate recurring subscriptions, including Netflix and Spotify.
  • Reduce unnecessary costs, like ordering takeout.

If you’re moving from a condo or house, you should make sure your current space looks and feels ready to sell so you can get the best price. The extra money you get from that sale will add to your budget. Be sure to factor this number into your plans.

In general, your budget will be all about ensuring you have enough cash to cover the down payment and closing costs for a home you can afford.


Step 2: Seek a Loan Preapproval

It’s now time to get preapproved for a mortgage. This loan will ensure you have enough money to buy your first home. There are various options for mortgages. As a result, you should have a few to explore before you make a decision.

If you’re unsure how to navigate the mortgage process, you’re not alone. Here’s a quick breakdown to help you know what to expect during the loan preapproval step.

1. Choose a Mortgage

There’s a wide array of loans available for homebuyers. It’s also possible to find mortgages that apply to specific occupations or situations. For example, you might be able to qualify for a home loan for veterans. Be sure to explore your options thoroughly.

Remember your budget as you weigh each choice. Those figures will help you determine which loan makes the most sense for your financial situation. It’s essential to have that information organized to help the lender during the preapproval process, too.

2. Look Around for Rates

Try not to pick the first mortgage you find. If you start applications at the same time, you won’t hurt your credit score. There’s no reason not to look at various lenders to ensure you get the best deal.

3. Get a Prequalification Letter

The preapproval process will grant you a letter. This document outlines that you’ve been accepted for a specific mortgage. As a result, you should look more serious to sellers. You don’t need to wait to look at homes before getting your letter, but it’s best to pursue one before making an offer.

Remember that you don’t have to get a loan from the lender who granted you a prequalification letter. You can always reconsider. It’s simply a good idea to have this documentation when you make an offer.


Step 3: Start Your House Hunt

You can start your house hunt whenever you like. It’s best to have your budget outlined and your preapproval ready — but there’s nothing stopping you from shopping around right away. In any case, you’ll soon find there are multiple ways to look for a home.

The easiest option is searching online. You can browse various websites and apps to find houses that work for your budget and tastes. That said, it’s still possible to find homes organically. Take a walk around your chosen neighborhood to see what’s for sale. You can then contact the listed estate agent.

Optional: Hire an Estate Agent

If you’re struggling to find houses, you can always hire an estate agent. There’s a difference between those professionals and others, so you should think about which expert could help you the most. These specialists will work with you to help you locate the perfect home. They’re also extremely beneficial when it’s time to make an offer.

You don’t necessarily have to hire an estate agent. You can do everything yourself. That said, you’re going to need some help as a first-time homebuyer. They’re a great option unless you have friends and family with expertise — or, of course, you’re an estate agent yourself.

Agents will of course be incentivised to sell you one of their listed properties. This is very much so that they can obtain their estate agent fee from the seller


Step 4: Visit and Compare Homes

You’ve collected a few listings. What happens next? It’s time to schedule appointments to visit those homes. During COVID-19, you might be limited to seeing houses virtually at first. There are ways to see homes in person safely, but it’s important to remember this point.

Try bringing a notepad with you as you tour spaces. You’ll want to write down what you like and don’t like while walking around. These notes should make your decision easier because you can compare everything side by side. Be sure to take photos, too.

You need to ask a few questions during the tour, as well. The estate agent has endless information that can make or break your decision. You never want to be hit with surprises because you forgot to inquire about something.

It’s also smart to keep your perspective in check. A well-staged home might seem enticing, but you have to look beyond that initial layer to see what’s going on behind the scenes. The same idea applies to fixer-uppers. There could be a hidden gem behind that dated flooring.

The house-hunting experience can take anywhere from one week to several months. That’s why you need to be patient. There’s a significant chance you’ll need to look at many homes before you find one that ticks each box and matches your budget. If you manage your expectations, it’s going to be a lot less stressful.


Step 5: Write an Offer Letter

Did you find a house you love? That’s a big feat. It’s now time for a more complicated, time-consuming process where you submit an offer to buy your chosen home. This part can involve many ups and downs, so you should be prepared for anything.

If you have an estate agent, they’ll be able to help you through each step. You’re essentially going to propose your offer price, potential contingencies and the closing timeline for the home. The seller will either accept, modify or reject the offer. There’s often some negotiation involved.

Here’s an overview of what your offer might include:

  • The price you want to pay for the house
  • The down payment amount
  • Any contingencies you’d like to add
  • Your mortgage preapproval letter
  • The offer’s expiration date

Keep in mind that your offer letter will be legally binding. Therefore, you need to check everything you write against your state’s laws. If it’s accepted, you might be able to make changes later, but you should be fully confident you can deliver on whatever you’ve outlined.


Tips for a Steller Offer Letter

The best offers are submitted quickly and confidently. You want to have faith yours can stand against the competition. Plus, you have a chance to close faster when you don’t wait around. There’s no telling who else wants to buy that house, too.

If your offer isn’t quite what the seller desires, you’ll likely receive a counter offer. They might want you to reduce how many contingencies you included or move up the potential closing date. It’s up to you whether you accept that second offer or send them another counter.

A reasonable offer is subjective. For instance, you and your estate agent might think the seller wants too much for the home. It’s smart to make a quick offer, but you need to do your research first. Don’t offer anything that makes you second guess yourself.

The Bottom Line

In any case, you should be ready for both the best- and worst-case scenarios. If they accept your offer, it’s time to seal the deal. If they choose someone else, you simply have to keep looking. Try not to let a disappointing offer experience dampen your search.


Step 6: Get an Inspection and Appraisal

This step will be the last thing you do before closing. It happens between the seller accepting your offer and the final closing date. An inspection will uncover any problems and ensure the house is safe and up to code. Additionally, you can only get a mortgage when you get a professional appraisal. 

Be sure to hire certified professionals for these two jobs. You don’t want anything questionable to interrupt the process. Is the seller paying for the inspector? Check that they’ve chosen a reputable third party to complete the inspection. The appraisal will happen afterward so they can factor in your future home’s condition.

If you find something wrong with the house, you need to bring that information to the seller’s attention. You can then figure out who’s going to pay for specific repairs. There’s a chance that you won’t reach an agreement. That’s when you might end up walking away from the deal completely.


Step 7: Close the Sale

It’s closing day. That means you’re going to sign the dotted line on your first home! This meeting will involve reviewing and approving various documentation regarding the house. These items include everything from the home’s deed to the settlement statement. Your estate agent should be present throughout the process.


Where Does This Meeting Occur?

The meeting usually happens at an office. You’ll meet there to complete the paperwork alongside a few other professionals involved in the process. If you’re wondering whether you can move in afterward, it’s going to depend on your situation. The seller might be staying for a few more weeks so they can finalize on a new home. In other cases, you could get the keys right away.


Enjoy Your Next Chapter as a First-Time Homebuyer

It’s no secret that buying a house can be tricky. That’s especially true when you’re a first-timer. Fortunately, you can access many resources to make your experience less stressful. As long as you prepare, you can navigate this process with ease from beginning to end.

Use this guide to make sure you’re checking off each step the right way. This information should ensure you’re knowledgeable and ready for anything. Once you’re prepared and feel confident, the homebuying experience will be the memorable experience you were hoping for.

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