Short Answer
Start by checking your credit report and addressing any errors. Pay down credit card balances to improve your credit utilization. Save for a down payment and closing costs, typically 3% to 20% of the home price plus 2% to 5% for closing costs. Get pre-approved by a lender to know exactly what you qualify for. Avoid opening new credit accounts or making large purchases during the process. Build an emergency fund of three to six months of expenses.
Getting your finances ready should begin six months to a year before you plan to buy. Start by pulling your credit report from AnnualCreditReport.com and reviewing it for errors. Dispute any inaccuracies. Pay down credit card balances to keep your utilization below 30%, ideally below 10%. This can quickly improve your credit score. Do not open new credit cards, take out car loans, or make large purchases on credit in the months before you apply for a mortgage. Lenders will pull your credit again right before closing. Save, save, save. Your down payment and closing costs are just the beginning. You also need cash for moving expenses, immediate repairs or furnishings, and an emergency fund. Lenders want to see that you have reserves after closing. Get pre-approved early so you know your budget and can shop with confidence. A pre-approval also shows sellers you are a serious buyer.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
The best first step is a conversation. Let us sit down and review where you are financially. I can connect you with a lender who will pull your credit, give you honest feedback, and create a plan to get you ready. Do not worry if you are not perfect today. The goal is to have a roadmap. I have helped plenty of buyers go from not ready to ready in six months.
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