Purchasing a home is one of the biggest investments you will ever make. The process can be both exciting and overwhelming, especially for first-time buyers. However, if you plan ahead, do the research, and enlist the help of industry experts, you can eliminate potential headaches. 

12 Months Out

Planning ahead is key for a smooth home buying experience and giving yourself at least a year is an excellent timeline, if possible. During this time, check your credit score, determine how much you can afford and make a down payment plan.

Melanie McNamara, REALTOR® with Community Realty, says that this is also a good time to enlist the help of an experienced REALTOR®. 

“I think it is beneficial to develop a connection with a REALTOR® early in the process,” she said. “A buyer consultation is a great way to go over your ‘must have’ list, discuss a potential budget, and answer any questions you may have. A REALTOR® can then watch for new listings and keep you informed of what is going on with the local market.” 

McNamara suggests thinking through your “non-negotiables” and what type of home best suits your needs – number of bedrooms, neighborhood/location, open concept, fixer upper, etc. You can also do a preliminary search online and drive through some neighborhoods or swing through a few open houses to get a feel for homes in different areas. 

Bryan Clark, senior vice president of mortgage banking with Dart Bank, says the one-year mark is also a great time to connect with an experienced lender. 

“A preliminary discussion with a mortgage lender is a great idea,” he says. “Together, we can walk through the mortgage process so you know what to expect. We can also pull your credit report and determine if anything needs to be addressed, and discuss how much you can afford and what your potential monthly payment might be.”

If there are any credit issues, Clark says most lenders will have tools in place that can help a client determine what they can do to improve their score. In addition to addressing credit issues, it is also a great time to start saving for your down payment and other expenses. 

“Make it a priority to set aside extra money every month,” said McNamara. “It is best to have as much of a cushion as you can so you are prepared for any costs that come up throughout the process.” 

6 to 9 Months Out

In addition to the advice above this is a good time to start a home maintenance account to take care of potential repairs and/or emergencies after you move in. The website also suggests collecting necessary loan paperwork – W-2 forms or business tax returns if you are self employed, personal tax returns from the past few years, pay stubs, credit card and loan statements, bank statements, etc. 

“It is important to remember that most financial information is good for only 120 days,” said Clark. “It is great to have all of this information readily available, but keep in mind that some of it may need to be updated. Your lender can walk you through the specifics.” 

0-3 Months Out

As you get further along in the process, it is imperative to get officially pre-approved for your loan. If you have been preparing over the past nine months, you should be in a good financial situation and have all of your necessary paperwork ready to go. Once you are pre-approved, Clark says it is important to not change anything until you officially close on your home. 

“A negative hit on your credit, an increase in your debt, or any changes in employment or income can affect your qualification,” he says. “It is possible to be denied even after pre-approval, so don’t make any big financial decisions without first talking it over with your lender.”

You should also begin actively shopping for your new home, if you haven’t already. Most likely, you will have developed a relationship with a trusted REALTOR® and they will be able to target homes in your budget that meet your needs. Once you have chosen a home, your REALTOR® will assist you in negotiating the entire purchase process.

“I would suggest actively looking at least three months out, if not more, depending on when you need to be in the home. Be sure to allow additional time for any delays that may arise during the transaction,” McNamara said. 

In the final stretch you should prepare yourself to get a home inspection, acquire homeowners insurance, do a final walkthrough of the home, triple-check all of your financial paperwork, and review all lending documents before closing. You will also want to get a cashier’s check or bank wire for cash needed at closing. Your REALTOR® and lender will help guide you through these important steps.  

If you are planning on purchasing a home in the next year, visit the Greater Lansing Association of REALTOR®’s website at www.lansing-realestate.com to find an experienced REALTOR® and mortgage lender in the area.