Year 1: Laying the Foundation
Get a Goal! You've likely been looking on Zillow and Realtor.com. Pick a house to give you a starting point. Is it a $300k house? $400k? $250k? Pick One.
Month 1-3: Assess Your Financial Situation
- Check Your Credit Report. Get a free credit report and check for errors.
- Create a Budget. Track your income and expenses to assess your financial health and identify areas for savings.
- Create a Document Hub. Whether it's a folder, a scan to a hard drive, or a drawer, keep your last two years' W2s, Tax Returns, and paystubs in one place.
Month 4-6: Start Saving for a Down Payment & Closing Costs
- Get your baseline. Log your savings and checking account totals.
- Open a Savings Account. Set up a dedicated savings account for your down payment.
- Set Savings Goals. Set your goals to be 3.5% at least for FHA minimum, 10% for a healthier downpayment, and 3% for closing costs.
Month 7-9: Reduce Debt and Improve Credit
- Get your baseline. Log all of your debt totals and the corresponding minimum monthly payments. Total those minimum payments.
- Pay Down Debt. Focus on paying off high-interest debt, such as credit card balances, while keeping the balances low.
- Student Loans. Look into an income-based repayment plan if the payments are too high.
- Avoid New Debt. Refrain from taking on new loans or credit cards.
Month 10-12: Research and Educate Yourself
- Learn About Mortgages. Understand different types of mortgages and their terms.
- Attend Homebuyer Workshops. Many local organizations offer free workshops for first-time homebuyers.
Year 2: Getting Ready to Buy
Month 13-15: Build Your Homebuying Team
- Find a Real Estate Agent. Look for an experienced agent who understands your needs.
- Consult a Mortgage Lender. Start the pre-approval process for a mortgage to know how much you can afford.
Month 16-18: Start House Hunting
- Identify Your Needs and Wants. Make a list of must-haves and nice-to-haves in a home.
- Visit Open Houses. Start visiting homes to get a feel for what's available in your price range.
Month 19-21: Make an Offer
- Finalize your Pre-Approval. Update your mortgage documents and get a final Pre-Approval Letter from your mortgage lender.
- Choose a Home. Once you find the right home, work with your real estate agent to make a competitive offer.
- Negotiate. Let your Real Estate agent guide you through the best ways to negotiate the price and terms with the seller.
Month 22-24: Finalize the Purchase
- Home Inspection. Hire a professional to inspect the home for any issues.
- Close the Deal. Work with your lender to finalize the mortgage and complete the closing process.
Close
By following this 2-year plan, you'll be well-prepared to buy your first home. Remember, an educated buyer is a confident buyer. We hope this guide gets you one step closer to confidence.
Close on Your New Home with Leaders Credit Union
Are you ready to begin the two-year journey to homeownership? Reach out to our Mortgage Champions, who can help you navigate the steps you need to take for your dream home to become a reality. Be sure to check out our free Get Pre-Approved for Mortgage Guide.