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Your Best Home Buying Checklist

March 04, 2024 9-minute read

Author: Miranda Crace


Want to make a move? The good news is that there is no “right” or “wrong” time to buy a home – it all depends on when you’re personally and financially ready.

Be prepared: While reality TV shows make home buying look like a snap, in real life it can be an involved process. And it’s normal to have questions, especially if you're a first-time home buyer; after all, you’re probably preparing to make the most expensive purchase of your life. But the great news is that you don’t have to feel overwhelmed.

Why’s that? Because we’ve prepared a checklist designed to help you successfully manage and complete every step of buying a house.

1. Determine How Much Home You Can Afford

Determining your budget is a smart way to start. By identifying a realistic budget, you can embark on your search with a firm understanding of your price range. Getting preapproval early on in the house hunt can help you figure out what your buying budget is and help you set realistic goals.

Here are some ways to help determine how much home you can truly afford:

  • Calculate your debt-to-income ratio (DTI), which is your monthly expenses versus your monthly cash intake. This includes all the bills you have to pay, divided by your gross monthly income.

  • When you consider your debts, include any recurring bills such as student loans, car payments, child support payments – anything that you pay on a monthly basis.

  • To secure a qualified mortgage from most lenders, your DTI should be no higher than 43%. But remember, that’s the “outside” number you can spend – and it doesn’t mean that you necessarily should.

Have you ever heard of being “house poor”? That means that you spent so much money on your home that you don’t have funds left over for activities, such as eating out or traveling, or even the many expenses that will come on top of your mortgage. You’ll want to budget for furniture, fresh paint and plants for your new patio pots. Also, consider routine maintenance and even unexpected big ticket items like a new hot water heater.

By building some breathing room into your budget, you’ll be able to enjoy your new home with less financial stress. This handy home affordability calculator will give you a great place to start!

See What You Qualify For


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2. Save For A Down Payment

Your mortgage payment is only one piece of the puzzle. It’s also important to make a sizable down payment, which will save you a good chunk of money over the life of your loan. Here’s how:

  • A down payment of 20% or more will exempt you from private mortgage insurance (PMI). PMI is typically required with a down payment of less than 20%. The cost of PMI coverage is based on risk factors, such as your DTI and credit score. It’s an expense that any homeowner would prefer not to have.

  • A bigger down payment will often result in a lower interest rate; that’s because a lower loan-to-value ratio (LTV) decreases your lender’s risk.

  • The bigger the initial payment against principal, the less interest a borrower will pay over the life of the loan, potentially saving thousands of dollars.

  • A bigger down payment results in smaller monthly payments because you owe less on the house.

  • Smaller monthly mortgage payments could positively influence future borrowing power, which means you’re more likely to qualify for a car loan, credit or other financing.

Tips For Saving

Knowing that a bigger down payment will result in paying less over the life of your loan can make it less painful to save up for buying a home. Not sure where to start? Here are some ideas:

1. Build a budget: It’s hard to save money when you don’t even know where it’s going. By developing a budget and tracking your outflow, it’s easy to see where you can make some life changes to save extra money.

2. Set up automatic savings: You’ve heard the adage “pay yourself first.” By setting up automatic savings through your bank account, it can be easier to save that money because you’ll never even see it.

3. Get a side gig: Whether you can tutor kids or deliver food for nearby restaurants, there’s likely something you can do to earn some extra cash to put towards that down payment. This also could be a good time to find out about some “passive income” opportunities that can help you build your bank account 24/7.

These steps can also increase your credit score, which can help you get better mortgage terms.

Take the first step toward the right mortgage.

Apply online for expert recommendations with real interest rates and payments.

3. Find A Real Estate Agent You Can Trust

While you might want to do some looking on your own, whether you’re browsing online listings or attending open houses, most home buyers find value in working with a real estate agent or REALTOR®.

Not only can they help scout out prospective homes, but they can provide expert knowledge on the market. Their expertise can help guide you on:

  • Whether an asking price is appropriate
  • Sizing up the pros and cons of homes
  • Which are the up-and-coming neighborhoods
  • The mortgage and preapproval process
  • Negotiations and bidding wars
  • Paperwork and the closing process

A good agent is imperative to guiding home buyers through many of the later steps on the home buying checklist. They are the ones on your side, watching out for your best interest – all of which helps take the stress off you and help you manage the emotions of home buying.

4. Get A Mortgage Preapproval And Choose A Lender

Before you even start looking at homes, it can help to shop around for mortgage lenders. You can also consider letting a mortgage broker handle the shopping for you. In today’s housing market, the seller wants to have confidence that you will be able to purchase the house if you make an offer, and that comes through preapproval.

One simple and effective way to seek an approval – and, eventually, a lender – is through Rocket Mortgage®. They do much of the paperwork upfront – they pull your credit report, decide (at least tentatively) on a preapproval amount, and help you choose your home loan type (fixed-rate, conventional, etc.) and loan term or length (15 years, 30 years, etc.) that’s right for you.

Remember, a letter of preapproval does not imply a commitment to a particular lender. In fact, it’s in your best interest to ask a variety of potential lenders to compete for your business, allowing you to find the loan that’s most financially advantageous.

Rocket can also provide you with a Verified Approval, which can help assure sellers concerned about offers falling through. A Rocket Verified Approval can be a great negotiating tool.

Take the first step toward buying a house.

Get approved to see what you qualify for.

5. Find The Perfect Home For You

For some home buyers, house hunting can be overwhelming.

That’s why it’s smart to ask your real estate agent to weigh in. They often can offer advice on subjects that you might not have considered, such as whether the home is in the right school district for you or if it’s been on the market a while.

But make sure to do your own looking, too, by checking out homes online and visiting them to get a better sense of your own tastes and needs. You can drive around to find appealing homes in your neighborhood of choice or use Rocket HomesSM to find possibilities.

Once you’ve seen a wide variety of homes, your real estate agent can help you narrow your search by using results from a multiple listing service (MLS), where listings tend to be more timely and accurate. Note that one disadvantage to the MLS is that it doesn’t include homes for sale by owner (FSBO).

6. Make A Smart Purchase Offer

Helping you make a smart purchase offer on the right home is where your real estate agent will shine. Make sure to consult with them when deciding how much to offer for a particular home.

Your agent can help put a vast array of criteria into perspective. For example, your offer number will depend on a number of diverse factors:

  • How hot the housing market is, both nationally and locally
  • How long the house has been on the market
  • Whether there are already offers out there on the house

In a slow market, home buyers can reasonably hope for a small discount on the asking price. In a more competitive market, making an offer below asking price might lead to your offer being rejected.

Remember that your offer includes more than just the round number of the home purchase price. You also want to include terms, such as how soon you need to be in the house, and contingencies, such as whether you need to sell an existing house first.

Make Your Offer Stand Out!

Get a Verified Approval with Rocket Mortgage® today.

7. Hire A Real Estate Lawyer

In some states, having a real estate lawyer is required. In other states, they’re not mandated, but can still be good to have in case you end up in complex legal situations.

For example, what do you do if there is an existing tenant or if you have questions about the title or an easement? Foreclosures and short sales are other tricky situations where a real estate lawyer’s advice could be handy.

A real estate lawyer is specially equipped with knowledge to answer all these legal questions, and to review the purchase agreement, title documents and other paperwork to make sure it’s all in good order. While a real estate lawyer adds one more expense at a time when you might feel overwhelmed, the peace of mind can be well worth the investment.

8. Schedule a Home Inspection

It’s impossible to accurately judge every aspect of a house’s integrity and fitness before making an offer. This is where a home inspection comes into play.

Although you’ll bear the fee, it can be well worth it because a home inspection can protect you from unforeseen costs and liabilities. For example, you’ll know how much “roof life” is left, whether the foundation is failing or if the electrical system is up to par.

The home inspector is also likely to reveal minor problems. This is common and not necessarily a reason to panic. Instead, you can use these issues to your advantage as a bargaining chip for negotiating seller concessions or a reduced overall purchase price, given of course that you signed an inspection contingency. Check with your real estate agent to find out if this is appropriate – you’ll want to be wary of nickel-and-diming a seller in a hot market.

In addition to a general home inspection, you should consider ordering specialty inspections for other potential problems, such as for radon or mold.

9. Prepare For Closing

Assuming that the inspection passes muster, you’ll soon be ready to close. This is when you want to make sure your finances are in order so that they are liquid when it comes time to pay closing costs. You’ll also want to avoid making any purchases or financial changes that can affect your credit score.

During this waiting period, your lender will arrange to have an independent third party make their own appraisal of the property. If the appraised amount is significantly lower than the agreed-upon purchase price, buyers can ask the seller to lower the price or assume some of the costs due at closing.

You’ll also want to look into homeowners insurance. While you’ll want it anyway, you’ll likely need to show proof at the closing if your home is financed with a mortgage. This can also be a good time to do a final walkthrough to ensure everything is in order.

Get A Jump On Renovations

If you plan to ask the seller for repairs to your future home, seek their permission to shop around for contractors, painters, carpenters and other trade workers. This sort of work takes time and can be difficult to schedule on short notice, so you’ll appreciate the long lead time.

10. Close On Your New Home

Now the big day is here. Get ready to sign a lot of papers, but don’t worry, you’ll have time to review all of them prior to closing. You’ll also need to bring a few pieces of documentation to your home closing. Your real estate agent and mortgage lender will help you with the specific list, but you’ll definitely need the following:

  • Identification
  • Proof of insurance
  • Checks or cashier’s check to cover closing costs

And then, the magic moment comes when you get the keys to your new home. Congratulations!

The Bottom Line

House hunting can be stressful if you don’t know what you can afford and you’re not familiar with the steps of the home buying process. But it doesn’t need to be. As long as you take the time to gather the right documentation, find a REALTOR® or real estate agent you trust, and determine your financial and personal goals, buying a house will feel like a breeze.

Mortgage preapproval lets you shop smarter while making you a more competitive buyer. If you’re ready to start your house hunt, take the first step and get preapproved today!

Take the first step toward buying a house.

Get approved to see what you qualify for.

Miranda Crace

Miranda Crace is a Senior Section Editor for the Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate, and personal loans for over 10 years. Miranda is dedicated to advancing financial literacy and empowering individuals to achieve their financial and homeownership goals. She graduated from Wayne State University where she studied PR Writing, Film Production, and Film Editing. Her creative talents shine through her contributions to the popular video series "Home Lore" and "The Red Desk," which were nominated for the prestigious Shorty Awards. In her spare time, Miranda enjoys traveling, actively engages in the entrepreneurial community, and savors a perfectly brewed cup of coffee.