Buying your first home?
Oh, it’s so exciting! Gotta love those moments when your Pinterest board finally jumps off the screen and turns into real walls, floors, and yes, an actual front porch.
I’ve been there with so many clients, and I get it… the emotions are real. And sometimes, they can feel overwhelming. Maybe you’re in that spot right now?
If so, my advice is simple: prepare yourself.
Before you start scrolling Zillow or scheduling open houses, let’s make sure you’re truly ready and set up for success! This article will walk you through my step-by-step checklist to get your credit and finances in top shape so that when the right house comes along, you’ll be ready for it!
Step 1: Know What Lenders Will See (Check Your Credit Report)
No surprise here, but checking your credit report is the first step—for good reason!
Not just because I’m biased (though I am a credit coach), but because it’s the most important piece of the puzzle when it comes to your financial readiness.
It takes five minutes and zero dollars. And I promise, it’s less scary than it sounds. Think of it this way, it’s far better to spot any issues now than have a lender spot them later.
What to do:
- Pull your FREE report here: https://myfreescorenow.com/en/creditsnapshot/user/register/11725?source=default#
- Look for late payments, collections, or errors
- Flag anything that might hurt your chances of approval
Step 2: Boost Your Score (+ Why It Matters!)
Your credit score is so much more than just a number, it can affect your mortgage approval and interest rate in a big way!
- A score of 620 is often the minimum for conventional loans.
- 580 might get you approved for an FHA loan.
- 700+? That’s where the real magic happens—lower rates, lower payments, and more financial breathing room (yes please!)
More room in your budget means more freedom. Whether that’s cozy throw pillows for your new living room or an enhanced emergency fund, it’s there for you!
If your score isn’t where you want it to be, don’t panic! Just give yourself time to work on it. That’s what credit coaching is for *wink wink* (check out how we can work together here: https://jeannekelly.net/ )
Step 3: Tidy Up Those Credit Blemishes
If you know my story, you know I wasn’t always a credit expert. I’ve been where you might be now—overwhelmed, confused, and staring at a credit report full of things I’d forgotten about or didn’t realize were a big deal. Even small mistakes can have a big impact. But here’s the good news: they’re fixable.
Start here:
- Dispute anything inaccurate through the credit bureaus.
- Pay down high balances to reduce your credit utilization ratio.
- If you have late payments or collections, make a plan to address them
Step 4: Keep Your DTI in Check (Lenders Love This)
Your debt-to-income ratio (DTI) tells lenders how much of your monthly income goes toward debt. The lower the ratio, the more confident lenders feel that you can take on a mortgage.
To improve it:
- Pay off credit cards and personal loans.
- Avoid taking on new debt (no new high-ticket furniture just yet!).
- Hold off on co-signing anything until after closing
Step 5: Pause the Credit Moves…For Now
There’s a time to play the credit game, and a time to press pause. Right before buying a home is not the time to:
- Open a new credit card
- Finance a car
- Jump into a “buy now, pay later” deal
Lenders often pull your credit again right before closing. A new account could raise questions, or worse, cost you the loan. So hang tight until the ink is dry and the keys are in hand.
Step 6: Prep Your Home Fund
Credit is important, but so is cash. Think of your down payment as your entry fee into homeownership, and your closing costs as the cover charge.
Ideally, you’re saving in a separate account that’s not tied to your everyday spending (especially those late-night online shopping temptations—we’ve all been there!).
Typical down payments include:
- 3% to 5% for conventional
- 3.5% for FHA
- 0% for VA or USDA (if eligible)
Don’t forget closing costs, which typically run 2% to 5% of the home price. Start contributing regularly to your “Home Fund”, even small, consistent deposits add up.
Step 7: Get Pre-Approved Not Just Pre-Qualified
Pre-qualification is a casual estimate. Pre-approval is the real deal, and proof to sellers that a lender has reviewed your finances and you’re seriously ready to buy.
To get pre-approved, you’ll need:
- Pay stubs
- Bank statements
- W-2s or tax returns
- Proof of assets and debt
Pre-approval makes you competitive in today’s market! Sellers will take your offer more seriously and prioritize it.
Step 8: Budget Like a Boss
Just because the bank approves you for a $400k loan doesn’t mean you should spend it all.
Factor in:
- Property taxes
- Homeowners insurance
- HOA fees
- Repairs and maintenance
Use an online mortgage calculator to run different scenarios and find a number that fits your life, not just the lender’s limits.
Step 9: Choose a Realtor Who Gets You
This part is so important, and often overlooked.
You want someone who:
- Specializes in first-time homebuyers
- Respects your budget
- Educates you along the way
- Doesn’t pressure you to go beyond your comfort zone
A great realtor is a guide, advocate, and sometimes even therapist. Choose someone who truly has your back.
Step 10: Play the Long Game (It’s Worth It!)
Buying a home is a huge step, but it doesn’t have to be a stressful or scary one. The more prepared you are, the smoother it goes and the more you’ll enjoy the process!
As your credit coach, my best advice is this:
Start early, stay consistent, and don’t let anyone rush your timeline.
Final Thoughts
Becoming a homeowner is a milestone worth celebrating, and it starts with smart, intentional steps that you can start making today. If you’re not sure where your credit stands, or you just want a credit coach in your corner cheering you on—I’ve got you!
- Follow me on Instagram: @creditjeanne
- Listen to the podcast: Credit Over Coffee
- Check out more resources: jeannekelly.net
- Download the app: https://www.creditbosslady.com/
Let’s get you ready to unlock that front door!
