Buy Your First Home in One Year: A Step-by-Step Guide - The Mistake-Proof Guide to Home Buying

9 Months Out

Prioritize what you most want in your new home. What's most important in your new home? Proximity to work? A big backyard? An open floor plan? Being on a quiet street? You'll make a much better decision about what home to buy if you focus on your priorities. If it's a joint decision, now is the time to work out any differences to avoid frustration and wasted time. Perhaps most important: Know what trade-offs you're willing to make.

Research neighborhoods and start visiting open houses. But now's when the fun begins, too. Use property listing sites, such as HAR.com, to find out about neighborhoods, public transport, and cost of living.

Start visiting open houses to get an idea of what kind of homes are in your price range and what neighborhoods appeal the most. Seeing potential homes will also keep you motivated to continue reducing your debts and saving for your down payment.

Budget for miscellaneous home-buying expenses. Buying a home has some miscellaneous upfront costs. A home inspection, title search, property survey, and home insurance are examples. Costs vary by locale, but expect to pay at least a few hundred dollars. If you don't have the cash, start saving now.

Start a home maintenance account.  Speaking of saving, start the good habit now of putting a little aside each month to fund maintenance, repairs, and home emergencies. It's bad enough to have to call a plumber. It's worse if you're paying credit card interest on that plumbing bill.

6 Months Out

Collect your loan paperwork. Banks are very particular when it comes to mortgage loans. They demand a lot of paperwork. What they'll want from you includes:

• W-2 forms or business tax return forms if you're self-employed for the last two to three years
• Personal tax returns for the past two to three years
• Your most recent pay stubs
• Credit card and all loan statements
• Your bank statements
• Addresses for the past five to seven years
• Brokerage account statements for the most recent two to four months
• Most recent retirement account statements, such as 401(k)

If you start collecting these documents now, it'll lessen the stress when it's time to get your loan. Bonus: Looking closely at your loan documents each month will also help you stay focused on saving for your down payment and keeping your debt-to-income ratio low.

Start interviewing REALTORS®, specifically buyers' agents. A buyer's agent will work in your best interest to find you the right property, negotiate with the seller's agent, and shepherd you through the closing process. Your agent also can be instrumental in finding a lender who's familiar with first-time home buyer programs. Ask me for more details: https://www.har.com/web/ChekiterEsther  or (281) 794-8703.

Even better, look for a mortgage broker, who will shop for a competitive loan rate for you among multiple lenders, unlike a bank, which can only offer its own products.

3 Months Out

Get pre-approved for your loan. At this point, if you've been following this timeline, your credit score, paperwork, and down payment should be on track. You've done your research on lenders and buyers' agents. Now it’s time to start working with them. First you'll need to get preapproved for a mortgage.

Make an appointment with your lender or mortgage broker and bring all your paperwork. They'll run a credit check on you and tell you how much of a loan you're approved for. It often makes sense to borrow less than the maximum the lender allows so you can live comfortably. Draft a budget that accounts for mortgage payments, insurance, maintenance, and everything else you have going on in your life.

Start shopping for your new home. One you're preapproved, the buyer's agent you've chosen will be able to target homes that meet your priorities in your price range. This way you won't waste time looking at homes you can't afford.

2 Months Out

Make an offer on a home. It usually takes at least four to six weeks to close on a home. So if you have a firm move-out date, allow enough time to deal with any hiccups that can delay closing.

Get a home inspection. After an offer is accepted, one of the first things you'll want to do is have a home inspector look at the property. A home inspector finding something that needs repair is a common example of something that can delay closing.

In the Last Month

Triple-check that all your financial documents are in order and review all lending documents before closing. You're in the home stretch! If you've been keeping your documents up to date, and your down payment is in reserve, these final steps are the easiest. Reviewing the mortgage documents is probably the most difficult. Your agent can help guide you through them.

Get insurance for your new home. Don't forget to secure insurance before closing. You'll need to bring proof of insurance to closing.

Do a final walk-through. Do a final walk-through of your new home, usually a day or two before closing, to make sure the home is in the shape you and the seller have agreed upon.

Get a cashier's check or bank wire for cash needed at closing. Make sure you get an exact amount of cash needed for closing. You'll get that number a few days before closing so you can secure a cashier's check or arrange to have the money wired. Regular checks aren't accepted.

That's it. Congratulations!