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Home Buying Checklist: 10 Steps to Buying a House

Kelly Kennedy Updated: December 14, 2023 • 6 min read
happy couple sitting on couch in living room of new home

Key Points:

  • Anything you can do to make the home-buying process easier on yourself is worth doing.

  • Before buying a house, you must determine how much you can afford.

  • We'll break it down into easy-to-digest steps you can refer to at any point in the home-buying process.

Anything you can do to make the home-buying process easier on yourself is worth doing. That includes understanding from A to Z and knowing the general steps or path you'll follow. And fortunately, Lendstart has your back in all of this. We'll break it down into easy-to-digest steps you can refer to at any point in the home-buying process.

Your credit score is a factor in determining your ability to secure a mortgage.

Home Buying Checklist

Before jumping into the exciting homeownership world, let’s take a moment to cover three basics: budgets, credit scores, and down payments.

pros icon Determine Your Budget

Before buying a house, you must determine how much you can afford. This involves investigating your income, expenses, and savings to view your finances fully. Remember to factor in additional costs such as property taxes, insurance, and maintenance.

pros icon Check Your Credit Score

Your credit score is a factor in determining your ability to secure a mortgage and the interest rate you'll receive. Check your credit score and address any issues before applying for a loan.

We discuss the power of a good credit score in this article.

pros icon Save for a Down Payment

Saving for a down payment often feels daunting, but it's an inevitable part of buying a house for most. The general rule is to aim for at least 20% of the home's purchase price. However, there are also options for lower down payments, such as FHA loans.

Head here next to read more about the standard for first-time homebuyers and down payments.

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Step 1: Financial Considerations

Now, let's talk about the dollars and cents component of home buying. 

Before making any decisions, thoroughly examine your financial situation. Consider the house's purchase price and ongoing expenses like property taxes, insurance, and maintenance costs. 

Assess how much you can comfortably afford to allocate towards your dream home, ensuring your budget accommodates all these aspects. Carefully examine these factors to equip yourself better to make an informed decision.

You'll also need to prepare to keep up with monthly mortgage payments, utilities, unexpected expenses, and home furnishing!

Step 2: Understanding Mortgages

Most of us can't buy a house with cash, so a mortgage is a ticket to homeownership for most American homebuyers. 

Let's look closer at this process and explore some of the intricacies involved.

What is a Mortgage?

Beginning with the most basic question, a mortgage is a loan designed for buying real estate. It allows you to borrow money from a lender (which tends to be a bank or mortgage company) to purchase a home. In return? You agree to repay the loan over a set period, typically 15 to 30 years, along with interest.

Types of Mortgages

There isn't a one-size-fits-all mortgage.

Here are a few common types of mortgages most homeowners turn to in the United States:

  • Fixed-Rate Mortgage: With this type, your interest rate remains unchanged throughout the loan term, providing predictability and stability in your monthly payments.
  • Adjustable-Rate Mortgage (ARM): An ARM has an interest rate that can change occasionally, usually after an initial fixed-rate period. It might start with lower rates but carries the risk of future rate increases.
  • FHA Loan: These are backed by the Federal Housing Administration, and FHA loans often require lower down payments and are suitable and accessible for borrowers with lower credit scores.
  • VA Loan: These are meant for eligible veterans and active-duty military personnel. VA loans usually require no down payment and have competitive interest rates.

Mortgage-Related Articles

Step 3: Getting Pre-Approved for a Mortgage

Regarding doing whatever you can to make the home-buying process easier for yourself, we can't skip over the benefits of getting pre-approved for a mortgage. This involves giving your financial information to a lender to determine the amount of money you can borrow.

There are several benefits to doing this:

  • Budget Clarity: Getting pre-approved can help you establish a realistic budget for your home search. This means you won't waste time looking at properties out of your price range.
  • Negotiation Power: Sellers often favor buyers with pre-approval because it shows that you're serious and financially capable of closing the deal. This can give you an advantage in a competitive market where multiple offers are being made on a property.
  • Faster Closing: Pre-approval can expedite closing once you find the right home. This is because your lender has already verified your financial information and determined how much they are willing to lend you—this makes it easier to finalize the loan.

Step 4: Your Down Payment

We've already mentioned that the general rule for a down payment on a home is to aim for at least 20% of the home's total purchase price. However, there are some cases where you may be able to put down less or have other options for financing your home purchase.

pros icon Low Down Payment Loans

Some lenders offer loans that require a lower minimum down payment than the traditional 20%. For example, FHA loans only require a minimum of 3.5% down; certain conventional loans may allow for as little as 3% down.

pros icon Down Payment Assistance Programs

Certain programs are also available that provide financial assistance for first-time homebuyers or those who meet specific income requirements. These programs may offer grants or low-interest loans to help cover your down payment.

pros icon Gift Funds

For some, it's also possible to receive a gift from a family member or friend for your down payment. However, be aware that there may be restrictions on how much of your down payment can come from a gift, and you will likely need to provide documentation to prove the funds were gifted.

pros icon Using Retirement Funds 

If you have a retirement account, such as a 401(k) or IRA, you can take funds without penalty for your down payment. However, keep in mind this should only be done as a last resort and can have long-term implications on your future retirement savings.

pros icon Taking on a Co-Signer

If you have a family member or friend with good credit and a stable income, you may be able to use them as a co-signer on your loan amount. This can help lower the down payment requirement and improve your chances of loan approval.

pros icon Government Programs

Certain government programs, such as FHA loans, allow for lower down payments for first-time homebuyers. Do your research—carefully!—and see if you qualify for any of these programs, as they can significantly reduce the upfront costs of purchasing a home.

Keep in mind these are just options worth mentioning. Each one has profound implications that should be carefully considered before deciding. 

Moreover, a solid understanding of the current property market and values in the area you are looking to buy will serve you well. This helps you determine how much you need for a down payment and if utilizing any of these options makes sense for your circumstances.

Head here next to read about the best mortgages for first-time home buyers.

Step 5: Find a Real Estate Agent

Consider your real estate agent like your trusty GPS in the home-buying journey. They know the local market, negotiate on your behalf, and guide you through the process. Find an experienced agent who understands your needs—choose wisely!

Step 6: House Hunting

Time to explore—for many, this is the most fun part of home-buying! Visit potential homes, attend open houses, and consider what features are non-negotiable for you. Make a checklist of your must-haves and nice-to-haves, and use that to narrow down your options.

Consider the location, school district, and community amenities. These factors can greatly impact your quality of life and potential resale value in the future.

Step 7: Make an Offer

Found "the one"? Your agent will help you draft an offer they think gives you the best chance of it becoming yours. Be prepared for negotiations with the seller. Don't forget to include contingencies like a home inspection and financing approval.

Step 8: Home Inspection

Before you seal the deal, get a professional home inspection. This step ensures no nasty surprises await you upon moving in.

Step 9: Closing the Deal

Congratulations, you're almost there! It's time to complete the paperwork, secure your financing, and close the deal. Your agent and mortgage lender will guide you through this process. It will involve signing lots of documents and paying closing costs, but once that's done, the home is officially yours!

Step 10: Moving In

You've got the keys, and it's time to move into your new home! Plan your move carefully, update your address, and celebrate this exciting milestone somehow. Book your movers, enlist friends and family for help, or take a moment to appreciate all your hard work paying off.  

Summary: Your Home Buying Checklist

Armed with this checklist, you're closer to acquiring your dream home. The journey isn't known for being easy, but the reward of homeownership can be worth it. 

Along with this checklist, the Lendstart blog has other helpful articles to guide you through home-buying. From budgeting tips to understanding mortgage terms, we've got you covered. 



Can I buy a house with bad credit?

Bad credit tends to make it much more challenging, but buying a house with a bad credit score is not impossible. Usually, it's helpful to work on improving your credit score before attempting to purchase a home.

How long does the home buying process take?

This answer varies, but on average, you can expect it to take 30-50 days from start to finish. Keep in mind there are plenty of variables that can impact the timing. For example, a competitive market may have a longer timeline, while buying a new construction home may take longer due to the building process.

Do I need a real estate agent to buy a house?

It's technically not a requirement, but having a real estate agent can save you time, money, and serious headaches by guiding you through the process. They also have access to resources and expertise that can be incredibly valuable during your home search. Home buying is known to be a tricky process. Navigating it without the help of someone who operates in that industry all day, every day, will be more complex than it needs to be.

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Written by Kelly Kennedy linkedin-icon

Kelly is an accountant, college accounting and finance instructor, entrepreneur, and freelance finance and business writer. He has a Bachelor of Management, an MBA, and a CPA. In his free time, he enjoys endurance cycling, and his only claim to fame is that he once rode his bicycle across Canada – 7,000+ km over 64 days.