From Dreaming to Owning: 8 Essential Steps for First-Time Homebuyers
Quick Summary
Making the move from just dreaming about being a homeowner to actually making the move takes more than just mindset. It takes careful financial planning and thinking about the future. This 8-step guide provides insights to help you prepare for making your dream become a reality.
Navigating the path to homeownership doesn’t have to be overwhelming. Follow these nine steps for a smoother journey.
Start saving early.
You’ll need to save for:A down payment (0-20%, depending on the loan).
Earnest money deposit (1–3% of purchase price).
Closing costs (2–5%) and moving expenses.
Immediate home improvements.¹
Meet with a loan officer. A mortgage expert can help you understand how much you qualify for, what additional costs to expect and how to use our calculator to compare the homes you love.
Determine how much you can afford.
Try an affordability calculator to analyze your debt-to-income ratio and create a realistic monthly housing budget that includes mortgage, taxes, insurance and maintenance.
Improve your credit.
Before applying for a mortgage:Review your credit report for errors.
Reduce your outstanding debt.
Avoid new credit applications.
Maintain on-time payments for at least 6–12 months.
Get preapproved for a mortgage.
The preapproval process shows sellers you're a serious buyer with verified financing. It also helps you understand your budget before house hunting.Hire a real estate agent.
The right agent can:Negotiate effectively on your behalf.
Identify potential issues.
Guide you through paperwork.
Connect you with trusted inspectors and contractors.
Get a home inspection.
Invest in a comprehensive inspection to uncover potential problems before closing on your new home. A few hundred dollars spent now could save thousands in future repairs.Prepare for additional costs.
Factor into your budget:Recurring expenses like property taxes (0.3–1.9% of home value annually).²
Homeowner’s insurance (about $2,500 annually).³
Regular maintenance (1–4% of home value per year).⁴
HOA fees (if applicable) and utilities.
Consider future expenses.
To protect your investment:Build an emergency fund that covers 3–6 months of housing expenses.
Review your insurance policy annually to make sure your property is covered adequately.
Ready to take the first step to homeownership? At Mountain America, we’re committed to helping you every step of the way. Connect with our experienced mortgage services team to explore your options and start your journey today.
