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9 Things You Must Do Before Buying a House

buying a house

If you've decided that you'd like to buy a home - congratulations!

Real estate is one of my favorite investment types, and having purchased 3 homes at the time of writing this, it's been one of my best-performing assets.

Whether you're thinking of buying a house to make a home or solely as an investment, here's a top-level checklist on what all goes into the home-buying process.



Let's assume you don't have hundreds of thousands of dollars just lying around to throw at a home purchase 😉

The first thing you'll want to do is make sure you can get approved for a loan - and the way to do this is to have a good credit score (target a credit score of mid-700's or above; check your credit score for free at


  1. If you don't have a bank account, set one up. In my experience most banks are similar in the various options they offer, so I've always just picked a location that's physically close to my house in case I need to go in. You can also search for 'bank account promotions + your zip code' to see if any are offering cash or other incentives to open an account with them.

  2. Once you have a bank account, you'll want to keep it in good standing, with consistent income.

  3. Apply for a gas card, which may be easier to obtain than other credit cards and typically have a lower credit limit. Whatever credit limit you receive, only spend about 10% or less of that per month... if you need to use more of it, absolutely do not spend over 30% of your limit. Most importantly, pay off your entire balance every single month.

  4. Apply for a secured credit card, which works like other credit cards, but requires a 'collateral amount' (which just means you'll have to provide some money up front, rather than providing the money after you've used the card).

  5. Consider a co-signer or co-applicant, which may help you get better credit terms, especially if you can't qualify for any cards on your own.


Once you've got a credit card or two, every month spend about 10% (and absolutely no more than 30%) of your credit limit, and pay off the entire balance.

For example, if your credit limit is $1,000 per month, spend around $100 per month on the credit card (and absolutely no more than $300/month), and then pay off the full amount using your bank checking account.

Keep doing this every month, and be patient; it takes time to improve your credit score. Patience is key.

If you need help staying organized, check out my FREE Budget Calculator, which provides a framework where you can track all your expenses in one place.


If you have existing debt (loans or credit cards), and are making payments each month, put as much as you can afford toward those payments to get those paid off as quickly as possible (pay more than the minimum amount, and prioritize those with high balances and high interest rates first).

Make sure you never miss a payment, and make sure you always pay on time. If you can automate your payments, even better.

If you need help figuring out how much you can afford to put toward your existing debt payments, check out my FREE Budget Calculator, which provides a framework where you can compare all your expenses against your income in one place.


Most experts advise spending no more than ~30% of your monthly gross income (what you make before anything's taken out) on your mortgage payment ('mortgage' just means your home loan).

So, let's say your annual salary is $87,000, which means your monthly gross income is $7,250. In this scenario, you should be spending no more than $2,175 per month on your mortgage payment - at the absolute maximum.

You can use tools like Zillow's Affordability Calculator to get a feel for the general price range you can afford - just be sure to set the debt-to-income percentage to 30% or less.


Before making an offer on a home, you'll need to have your down payment ready - and using the Affordability Calculator above, you can get a feel for what kind of down payment you'll need to save.

(A 'Down Payment' is a lump sum cash amount you make at the beginning of a home purchase before making the monthly payments on your loan).

To save for your down payment, I suggest setting up a monthly auto-draft from your checking account to your savings account or even somewhere else like an investment account if you feel comfortable doing that.

If you need help figuring out how much you can afford to save each month, check out my FREE Budget Calculator and if you need some realistic ideas on how to save more money, check out my FREE Money Saving Cheat Sheet.

Remember: patience is key.


Before even looking at houses, you'll want to get pre-approved for a loan. No home seller will talk to you until you've got this because it's essentially the proof that you can pay for the home.

If you have friends or family who have had good experience with a lender, explore those options.

Alternately, you can do an internet search for "top home lenders + city where you plan to buy a home + current year".

I suggest comparing at least 3 different options. Look at the criteria that matter most to you - mine were interest rate, down payment, and overall cost of the loan.

For the mortgages that I've taken out, I've selected the 30-year fixed-rate conventional loan, and here's why:

  • 30-year - the longer 'horizon' (loan length) keeps my monthly payments lower, so I can use my extra money in other investments

  • Fixed-rate - this keeps the interest rate the same throughout the life of the loan, allowing for the predictability of a consistent monthly payment, which is important for my planning purposes

  • Conventional loan - I found the overall costs of the conventional loan to be lower than other options, and I could afford the minimum down payment

Once you decide on the criteria that matter most to you and select your loan type, apply with at least 3 lenders to get your pre-approval. This allows you to find out if you're getting the best deal and gives you leverage to negotiate. I don't suggest applying with more than 3 because it could negatively affect your credit score.


You don't have to have a realtor to buy a house, but I've found it to be helpful and cost-effective because, in my experience, most of the realtor fees come from the seller, not the buyer.

Additionally, the realtor will handle a lot of the tasks for you and can often find you better deals because they have tools and data that show up-to-date information on home values.

If friends and family have worked with someone they like, use them. Otherwise, similar to what you did for the pre-approval on your loan, do a quick online search for best realtors in your area, and compare about 3 of them before making your decision.

Look for responsiveness, attention to detail, and professionalism.


Now for the fun part - selecting your house!

Your realtor can help send you a list of homes within your budget, and you can also browse sites like Zillow and Redfin.

If the market allows for it, I suggest viewing the house in person. Take the time to explore the area surrounding the house, as well, and really give thought to imagining yourself living there.

What would life look like? What would your drive to work look like? To the grocery store? If you have kids, what are the schools like? Are there neighborhood amenities? How long does it take to get to all your regular 'spots'?

What would cleaning the home look like? What about yard upkeep?

It may seem like a lot to consider, but it could really save you in the long run.


Lean on your agent for this one. They'll know how to structure the best offer, and can suggest the proper amount of earnest money to put down depending on what's custom in your market.

(Earnest money is an initial payment you make with the offer to show you're serious about the purchase.)

If you're buying in a competitive market, ask your agent in advance what type of amount you should have ready for the earnest money, and be prepared to write a check or wire it as soon as you make the offer.


You can move forward with one of the lenders you sought pre-approval from, or go with someone else.

You'll already have provided most of the information in the pre-approval, but the full application will require some additional details.

During this time, you'll also want to make sure you have the home inspected (which will tell you if there are any major issues you'll need to repair, and can help with negotiations, or in some cases, the decision to walk away from the home), and appraised (which will help you confirm if you're paying a fair price for the home).

Your realtor and lender can help coordinate the inspection and appraisal.


Between the mortgage application and closing day, for you (the buyer), it's mostly a waiting period as the mortgage company processes the loan and writes up the terms, but be on the lookout for any questions they send you and respond as quickly as possible. Your realtor can also help with this.

Once that's done, you've made it to your big day: closing!

Prepare yourself for a giant stack of paperwork and a lot of signatures.

You'll make your down payment, pay your part of closing costs, and receive your keys.

And, just like that, you're a homeowner!


I realize this process can feel like a lot, but I encourage you to push past the overwhelm and get started today - even if interest rates are high. It takes time to get ready for a home purchase, so maybe by the time you're ready, rates will have gone down. And even if they haven't, you can refinance for a lower rate later.

You're going to have to live somewhere, so you'll either be paying rent, or paying a mortgage (a.k.a. putting money toward owning a house, which is an asset).

I urge you to find a way to do the latter!




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