Being eager to buy your first home is understandable, but it’s not something you should rush into. Before you even begin looking at homes for sale, there are several steps to take to make sure you’re prepared for this major purchase. 

Lower Your Debt

Lenders will want to see a low amount of revolving debt, so it’s important to reduce what you owe. If possible, try to completely pay off credit cards. If you can’t, at least pay your bills on time to boost your credit score. Make sure you look over your credit report to see what your score is and check for any errors that could lower it. 

Build Up Savings

After you’ve paid off or significantly lowered your debt, focus on building up savings for a down payment. If you have rough estimate of how much you can afford to spend on a home, aim to save a minimum of 20 percent of that for your down payment. This helps you avoid having to pay even more each month for private mortgage insurance.

Establish a Budget and Stick to It

Come up with a reasonable budget that won’t put you under financial strain. Take into account that buying a home is a long-term investment. During that time, you might switch jobs or even be out of work. Your budget should allow you to cover all of your payments and be able to set aside money for home repairs and maintenance.

Choose the Right Home Loan Length

While many people choose 30-year mortgages, there’s no rule that you have to. If you’re able to make higher mortgage payments, you could choose a 15-year home loan instead. Your home will be paid off sooner, and you won’t pay as much in interest over the years.

Get Your Paperwork Ready

Lenders will ask to see several different documents to determine if you should be approved for a home loan and for how much. Start getting these documents, such as pay stubs and income tax records, ready ahead of time.

Think About Location

Compare different neighborhoods in the town or city you want to live in. Look for ones that have the amenities you want, such as good schools or close access to work. Just make sure you can afford to buy a home in the neighborhoods you’re interested in before you start looking at homes for sale in these areas.