Buying your first home is a milestone moment in everybody’s life. However, it can also be an incredibly daunting process. It’s not merely a matter of finding a house you like, getting some money from a bank, and signing some paperwork. There are loan applications, credit checks, negotiations, inspections, and a host of other steps that have to be completed before you get your keys. Here are some tips for you to keep in mind before you buy your first home.

Know Your Credit Score

You can run a credit check on yourself once a year, typically for free, that won’t have any bearing on your credit score. Before you begin the process of shopping for a home, meeting with Realtors, or talking to banks about loans, you’ll need to know if you have a good enough credit score to even qualify for a loan. Some basic online research will tell you credit score requirements, and if your score needs some help, find a reputable credit repair agency to get your score where it needs to be.

How Much House You Can Afford

The amount that your lender pre-approves you for may not be the amount that you should spend. If a bank tells you that they’ll give you a $150,000 mortgage, that doesn’t mean you have to purchase a $150,000 home. A good rule of thumb is to consider 25% of your monthly income, the maximum that you can spend on a monthly mortgage payment. While you’ll also need to consider homeowners insurance, property taxes, and possible homeowners association fees, you’ll want to be sure you stay at or below that 25% mark.

Down Payment Preparation

The type of loan that you qualify for will dictate how much of a down payment you’ll need. While certain loan types require as little as 3.5%, others may require as much as a 20% down payment. There is no way to know exactly how much you’ll need without knowing the house that you’re buying and what type of loan you’re applying for. It’s always smart to be prepared for the highest amount. Plan on saving up 20% of the home value, and then if you require less, you’ll have a cash surplus on hand.

Congratulations on stepping into life as a homeowner! Best of luck to you on this new chapter of your life.