Your Complete Home Buying Checklist: From Pre-Approval to Closing

Phase 1: Financial Preparation

Before you start looking at homes, it’s critical to understand your financial picture. This phase sets the foundation for everything that follows, helping you determine how much house you can afford and which loan programs might work for you.

Start by reviewing your credit score. Most lenders require a credit score of 620 or higher for a home loan, though requirements vary by lender and loan type. If your score is lower, you may still qualify for certain programs, but you might face higher interest rates or stricter terms.

Next, assess your savings. Besides your down payment, you’ll need to cover closing costs, which typically range from 2% to 6% of the total loan amount for home buyers. If you’re paying cash, you can expect to pay 1% to 3% of the purchase price in closing costs. Having a healthy savings buffer can also help you handle unexpected expenses after you move in.

• Check your credit report and score.
• Calculate your debt-to-income ratio.
• Set aside funds for closing costs and moving expenses.
• Gather financial documents such as tax returns, pay stubs, and bank statements.

Sources: Union Home Mortgage, Michigan Schools & Government Credit Union

Phase 2: Pre-Approval and Loan Shopping

Once you’re financially prepared, the next step is getting pre-approved for a mortgage. Pre-approval involves submitting documentation—such as W-2s from the past two years, recent pay stubs, bank statements, and proof of identity—so the lender can verify your income, assets, and employment. A pre-approval letter shows sellers that you’re serious and financially capable, which can give you an edge in a competitive market.

You’ll also want to explore loan options. FHA loans are popular with first-time buyers because they allow down payments as low as 3.5%. VA loans are available to eligible military members and veterans, offering zero down payment and no private mortgage insurance (PMI). USDA loans target rural buyers and also allow 0% down, but have location and income limits.

Union Home Mortgage offers a 1% Down Payment Program for first-time homebuyers. With this program, the buyer puts down just 1%, and Union Home contributes up to 2% (maximum $2,000) to reach a 3% down payment. To qualify, at least one occupying borrower must be a first-time homebuyer, and the household income must be at or below 80% of the area median income. This program is available for primary residence purchases only.

Beyond pre-approval, you can also pursue a Certified Home Buyer program, such as the one offered by Union Home Mortgage. This goes a step further than pre-approval by verifying your financial assets, employment, and income upfront, giving you full approval to purchase a home.

• Compare mortgage rates and loan terms from multiple lenders.
• Get pre-approved—not just pre-qualified—to strengthen your offer.
• Ask about down payment assistance programs and first-time buyer incentives.
• Understand the difference between pre-qualification (estimate) and pre-approval (verified).

Sources: Union Home Mortgage, Michigan Schools & Government Credit Union, Achieve Financial Credit Union

Phase 3: House Hunting

With your pre-approval in hand, you can start shopping for homes with confidence. Focus on homes that fit your budget and meet your needs—not just the maximum amount you’re approved for. Use online listings, attend open houses, and work with a real estate agent if you choose.

As you tour properties, keep track of what’s important to you: location, size, condition, and potential for future value. Don’t forget to consider the costs of ongoing maintenance and any repairs that may be needed.

When you find a home you like, move quickly but carefully. Your agent can help you prepare a competitive offer that includes appropriate contingencies, such as a home inspection contingency, which allows you to back out if significant issues are found.

• Define your must-haves and nice-to-haves.
• Use online search tools and real estate agents.
• Attend open houses and schedule private showings.
• Evaluate neighborhoods and future resale potential.
• Keep your pre-approval amount in mind to stay on budget.

Sources: Achieve Financial Credit Union, Maryland Homeownership

Phase 4: Making an Offer

Once you’ve found the right home, you’ll make a formal offer. This includes the purchase price, proposed closing date, and any contingencies—like the home inspection and appraisal contingencies. Your real estate agent can help you negotiate terms that protect your interests.

If the seller accepts your offer, you’ll enter a contract and move into the next phase. But be prepared for negotiations: the seller might counter with a different price or closing timeline. Having a pre-approval letter can give you leverage and show you’re a serious buyer.

During this phase, you’ll also want to schedule a home inspection. A thorough inspection can reveal hidden problems, and you may need supplemental inspections for radon, fireplace, well/septic, chimney, termite, mold, or structural issues. If problems surface, you can renegotiate or even walk away if the inspection contingency is in place.

• Work with your agent to determine a fair offer price.
• Include key contingencies: inspection, appraisal, financing.
• Be prepared to negotiate with the seller.
• Schedule a home inspection promptly after acceptance.
• Review the seller’s disclosure statement.

Sources: Achieve Financial Credit Union, Maryland Homeownership

Phase 5: Underwriting and Appraisal

After your offer is accepted, the lender will begin the underwriting process. This involves a detailed review of your financial situation and the property itself. One crucial step is the home appraisal, which the lender requires to ensure the property value matches the purchase price. Work with your lender and agent if the appraisal is lower than expected.

Underwriting also verifies that you still meet the loan requirements and that the property is insurable. You’ll need to provide any additional documentation the lender requests, and you’ll want to avoid making major financial changes—like taking on new debt—during this period.

Meanwhile, you should obtain homeowners insurance and prepare for closing. This is also the time to schedule your final walkthrough and review the Closing Disclosure, which details your final loan terms and closing costs.

• Respond promptly to lender requests for documentation.
• Schedule the appraisal (usually ordered by the lender).
• Secure homeowners insurance.
• Review your Closing Disclosure for accuracy.
• Complete any remaining inspections or repairs.

Sources: Achieve Financial Credit Union, Maryland Homeownership

Phase 6: Closing Day

Closing day is the final step in the home-buying process. You’ll sign multiple documents, including the deed of trust, the promissory note, and the Closing Disclosure. You’ll also pay the remaining down payment and closing costs, which are typically 2% to 6% of your loan amount, depending on your loan type and location.

Before closing, do a final walkthrough of the property to confirm it’s in the agreed-upon condition. Bring your photo ID and a cashier’s check or arrange a wire transfer for the funds you’ll owe. Once all documents are signed and funds are transferred, you’ll receive the keys to your new home.

After closing, keep your closing documents in a safe place. Your monthly mortgage payments will begin, and you’ll be responsible for property taxes, homeowners insurance, and any HOA fees. Congratulations—you’re a homeowner!

• Schedule your final walkthrough.
• Bring necessary identification and payment.
• Review and sign all closing documents.
• Confirm that all funds are transferred.
• Receive the keys and move in!

Sources: Michigan Schools & Government Credit Union, Union Home Mortgage