Before you begin looking for properties and calling agents, you have to get your finances in order. That begins with cleaning up old debt, improving your credit score, and building up a healthy savings to make a 20% down payment.

Most banks will require a minimum of 5% down. Keep in mind that lenders will typically require you to pay private mortgage insurance (PMI) if your down payment is less than 20%.

Once your finances are ready you can begin to look for a home. The first step is going to a bank of your choosing and getting pre-approved for a home loan.

Keep in mind that pre-approval and pre-qualification are two different things:

• Pre-Qualification: Only tells you how much you can afford for a home.

• Pre-Approval: Tells you how much the bank will guarantee to lend you for a home.

When you go to an open house with a pre-approval letter in hand, the seller knows that you are a serious buyer. Plus knowing exactly how much you are approved for can help you stay within your budget. When budgeting for your home purchase, don’t forget to include other costs that will arise such as:

• Inspections

• Repairs

• Closing Costs

• Contingencies

• And Other Fees