Homeownership is the number one way for Americans to build wealth. Renting, on the other hand, builds no equity and subjects tenants to an inexorable climb in the cost of rent. Before looking for a home, it's important to plan. Six months before starting a home search, check your credit report. Correct any errors and see if you can do anything to improve your score such as paying off a credit card.


Also, avoid financing any big purchases or increasing the balances on your credit cards. As the homebuying season approaches, create a homebuying checklist. This checklist will save time, define a realistic price range and help you find the perfect home.


Here are some important checklist items:


Set a budget


Many homebuyers become emotionally attached to a home only to discover they can't afford it. This wastes time and makes the experience unpleasant, causing them to start again from square one. To avoid this, define a budget based on your current income, then use a mortgage loan calculator to determine the price range that fits.


Remember that the mortgage isn't the only cost of ownership. Be sure your estimate factors in other costs, such as:

  • Utilities.
  • Insurance.
  • Property taxes.
  • Mortgage insurance.
  • Closing costs.
  • HOA dues, if applicable.


Get pre-approved for a home mortgage



Never home shop without a mortgage pre-approval. The pre-approval shows the seller you are serious, which gives you leverage in negotiations. It also defines the maximum price you can consider.


Keep in mind that just because a bank approves you for a maximum amount doesn't mean you can really afford it. You have to look at your own budget, spending habits and upcoming potential expenses that the bank has no way of knowing. For example, if you plan to have children and will need daycare, will the increased costs of child-rearing put you in the red?


Finding the right loan officer makes all the difference. Good loan officers have access to many home loan options and can suggest the right loans for you. For example, HomeTown Lenders' loan officers provide all types of loans, from conventional/jumbo to FHA, VA and USDA.


Hire an engaged real estate professional


HomeTown can help you find a great real estate agent in the area, you can be assured of working with an experienced agent who understands the nuances of the neighborhood and municipality you are considering. Real estate is very local, so you want someone who's plugged into the community.


Define what you're looking for in a home


List what's important, including items such as:

  • Walkability.
  • A garage.
  • The school system.
  • An extra bedroom.
  • A basement.
  • A yard.
  • A pool.

A column for wants and a column for needs work best.


Take your time


The homebuying process takes time and effort, but it's always worthwhile to find the right house. Shopping online, visiting open houses and reviewing suggestions from your real estate agent should all be part of your checklist.


Buying a home can feel overwhelming. Many homebuyers find that getting advice from family members and friends helps them gain different perspectives and identify pitfalls. Organizing important steps in a checklist helps you stay organized and focused on finding your dream home.


HomeTown can help you with each step in the process. Click here to get connected and learn about the HomeTown Advantage.