First-Time Homebuyer's Guide, Part 1: Getting Ready

Buying your first home is exciting — and it can feel like a lot at once. This four-part guide walks through the process one step at a time. Part 1 is about getting ready.

Look at your budget honestly

Start with what you spend today and what you'd like to keep spending on everything else. A comfortable monthly payment is one that still leaves room for savings, emergencies and the life you want.

Plan for more than the down payment

Buying a home comes with other costs too. Set money aside for:

• Closing costs, such as lender and title fees

• The home inspection and appraisal

• Moving, and anything the new home needs right away

• An emergency fund for repairs once you own it

Check your credit

Your credit history affects the loans you can get. Review your credit report, correct any errors, and avoid opening new accounts or making large purchases on credit while you're preparing to buy.

Gather your paperwork

Lenders will ask for recent pay stubs, tax returns, bank statements and details of any debts. Collecting them now saves time later.

In Part 2 we'll look at getting pre-approved for a mortgage.