The Smart Homebuyer Checklist: Steps to Take Before You Start Shopping

You’ve decided you want to buy a home—but where do you actually start? Do you go to open houses? Call a real estate agent? Look on Zillow?

Before you start touring homes or dreaming about backyard BBQs, there’s some behind-the-scenes prep that can save you time, money, and stress. At Horizon Funding, we’ve helped hundreds of clients buy homes the smart way—and it always starts with getting your financial house in order first.

This guide gives you the full checklist of what to do before you ever make an offer.

✅ 1. Know Your Credit Score

Your credit score plays a major role in what loan programs you’ll qualify for—and what interest rate you’ll get.

What to do:

• Check your score using a free app (like Credit Karma or your bank’s tools)

• Dispute any incorrect information

• Pay down high credit card balances if possible

🎯 Goal: Ideally, get your score above 620 for most loan programs. FHA loans allow for lower scores, but better credit = better rates.

✅ 2. Get a Handle on Your Debt

Lenders care about your debt-to-income ratio—how much you owe each month vs. how much you make.

What to do:

• Add up your monthly minimum payments (credit cards, car loans, student loans, etc.)

• Don’t include things like utilities, subscriptions, or groceries

• Compare this to your monthly gross income (before taxes)

🎯 Goal: Keep your total debts (including new mortgage) under 45–50% of your gross monthly income. We can help you calculate this accurately.

✅ 3. Organize Your Financial Documents

When you apply for a loan, we’ll need to verify your income, assets, and credit. Getting your paperwork ready now makes everything easier later.

What to gather:

• Last 30 days of pay stubs

• Last 2 years of W-2s or 1099s

• Last 2 years of tax returns (especially if self-employed)

• Last 2 months of bank statements

• Valid ID

💡 Tip: Avoid large unexplained deposits—lenders have to verify where funds come from.

✅ 4. Set a Budget Beyond Just the Loan

A mortgage isn’t your only homeownership expense. There are other costs to consider when figuring out your true budget.

Don’t forget:

• Property taxes

• Homeowners insurance

• HOA dues (if applicable)

• Utilities and maintenance

• Emergency savings for repairs

🎯 Goal: Be realistic about what monthly payment feels comfortable—not just what you can qualify for.

✅ 5. Save for Upfront Costs

You don’t always need 20% down to buy a home. But you will need some cash up front.

Typical expenses:

• Down payment (as little as 3–5% depending on loan type)

• Closing costs (2–3% of the purchase price)

• Earnest money deposit when your offer is accepted

• Inspections and appraisal fees

💡 Tip: Ask us about down payment assistance programs or how to negotiate seller-paid closing costs.

✅ 6. Talk to a Lender (Yes, Before a Realtor)

This might sound backwards, but trust us: talking to a lender first will make your home search smoother and more successful.

Why? Because:

• You’ll know what you can actually afford

• You’ll get a pre-approval letter to show sellers you’re serious

• You’ll avoid heartbreak over homes that don’t match your financing

🎯 Goal: Get pre-approved before you fall in love with a house. At Horizon Funding, we make this fast and pressure-free.

✅ 7. Avoid Big Financial Changes

The home loan process rewards stability. If you’re planning to buy a home in the next few months, keep your finances steady.

Avoid:

• Opening or closing credit cards

• Making large purchases (cars, furniture, etc.)

• Changing jobs without talking to your lender first

• Moving money between accounts without explanation

💡 Tip: We’re here to answer “Should I…?” questions before you act. Better safe than sorry.

✅ 8. Build a Realistic Timeline

Home buying can happen quickly—but it’s best to give yourself time to prepare.

Consider:

• How soon you want or need to move

• Lease end dates (if you’re renting)

• School or job changes

• Market conditions (inventory, interest rates)

🎯 Goal: Start preparing at least 2–3 months before you plan to start shopping. The more prepared you are, the more confident you’ll feel.

Final Thoughts

Buying a home doesn’t start with a house—it starts with a plan. At Horizon Funding, we specialize in helping buyers set that plan in motion. Whether you’re a few months out or ready today, we’ll guide you step by step.

✅ No pressure
✅ No judgment
✅ Just clear advice and a roadmap to homeownership

Let’s check a few boxes together—and then go find your dream home.