5 Smart Money Moves to Make Before Buying a Home
Buying a home is one of the biggest financial decisions you’ll ever make—right up there with deciding whether to splurge on the fancy guacamole at a restaurant. Unlike guacamole, though, a house comes with a lot more fine print and a much bigger price tag. So before you start mentally arranging furniture in a home you don’t own yet, let’s make sure your finances are actually ready for this adventure.
1. Check Your Credit Score (Before the Lender Does)
Your credit score determines if lenders see you as a responsible borrower or a financial disaster waiting to happen. The higher your score, the better your interest rate. If yours is looking rough, take some time to pay down debt and make payments on time. You know, responsible adult things.
2. Save for a Down Payment (Yes, You Actually Need One)
Unless you’re going the 0% down route (VA or USDA loans), you’ll need some cash upfront. Aiming for 20% will help you avoid private mortgage insurance (PMI), but if that’s unrealistic, there are low-down-payment options available. Just know that the less you put down, the more you’ll pay over time. Math is fun like that.
And while you’re saving for that down payment, don’t forget about closing costs. These are the fees that show up at the end of the homebuying process—appraisals, title fees, lender fees, taxes, insurance, and more. They typically run between 2% and 5% of the purchase price. So no, 0% down does not mean $0 at the closing table. Budget for it now and thank yourself later.
3. Get Pre-Approved (So You Don’t Fall in Love with a House You Can’t Afford)
Looking at homes before getting pre-approved is the financial equivalent of trying on wedding dresses before knowing your budget. Sure, you can dream, but reality will hit hard when you realize what you actually qualify for. Pre-approval helps you set realistic expectations and makes sellers take you seriously.
4. Avoid Major Purchases (Step Away from the New Car)
Lenders like stability. If you suddenly buy a car, open a new credit card, or finance a bunch of furniture, your debt-to-income ratio will take a hit. And nothing says “risky borrower” like someone who just bought a jet ski right before applying for a mortgage.
5. Build an Emergency Fund (Because Life Happens)
Owning a home is expensive—there’s no landlord to call when the water heater explodes. Having a solid emergency fund (3-6 months’ worth of expenses) can save you from financial panic when unexpected repairs pop up. Because they will pop up.
Final Thoughts
Buying a home is exciting, but it’s also a financial commitment that deserves proper planning. Get your money in order first, and you’ll avoid the kind of stress that turns homeownership into a regret instead of an achievement.
If you need help figuring out if you’re mortgage-ready, let’s talk before you start touring houses outside your budget.
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