Buying your first home? It’s exciting, overwhelming, and, let’s be honest—a little intimidating. Scrolling through listings, imagining your future kitchen or backyard, even mapping out your commute. But here’s the thing: before you get emotionally attached to that adorable two-bedroom with the wraparound porch, there are a few key financial moves you should make first.
Think of this as your pre-house-hunting checklist. A way to lay down a solid foundation (pun intended) before you start walking through open houses. These five money moves will help make sure you’re not just dreaming about a home, you’re actually ready to buy one.
1. Get a Grip on Your Credit Score
Let’s start with the not-so-glamorous part: your credit score. It may not be fun to think about, but it plays a huge role in what kind of mortgage you qualify for, and what your interest rate looks like.
So, where do you stand? You can check your credit score for free through many banks, apps, or credit card companies. Aim for at least a 620 to qualify for most conventional loans, though the higher your score, the better your rates. If you’re below that mark, don’t panic, you’ve got time to improve.
Pay off any high-interest debt if you can, make all your payments on time, and avoid opening or closing credit lines unnecessarily. Even small changes in your credit score can translate to thousands of dollars saved over the life of your mortgage. Worth it, right?
2. Understand What You Can Actually Afford
Okay, so you know your credit score, you’ve started saving, you’re trimming debt, and you’ve got pre-approval in your sights. Now comes the most crucial money move of all: figuring out your real monthly budget.
Spoiler alert: it’s not just about the mortgage. You need to consider property taxes, insurance, HOA fees (if applicable), utilities, maintenance, and all those little surprises that come with homeownership. (Yes, your hot water heater will die at the worst possible moment.)
One smart way to estimate your costs? Make use of a mortgage interest rate calculator to see how different loan amounts and interest rates affect your monthly payments. It helps you avoid falling in love with a home that ends up being a stretch.
Be honest with yourself. Just because you can get approved for a certain amount doesn’t mean it’s a comfortable amount. Your future self will thank you for buying a home that fits your life—not just your max loan approval.
3. Tackle That Debt-to-Income Ratio
If you’ve got student loans, a car payment, or credit card balances hanging over your head, you’re not alone. But lenders will take a close look at how much of your income goes toward debt.
This is where your debt-to-income ratio (DTI) comes into play. It’s the percentage of your monthly income that goes to paying debts. Most lenders like to see your DTI under 43%, though lower is always better.
So, what can you do? Start by paying down high-interest debt first. Look at your budget and see if there are areas to trim temporarily, less Uber Eats, and more homemade dinners. Every little bit helps. The lower your DTI, the more houses you can potentially afford. And honestly, who doesn’t want that?
4. Start Stacking That Down Payment
Let’s talk savings. More specifically, your down payment. This is one of the biggest upfront costs in the home-buying process, and having a solid chunk ready can make a world of difference.
The traditional 20% down isn’t a must anymore—many first-time buyers put down as little as 3-5%. That said, the more you put down, the less you’ll borrow. And that means lower monthly payments and possibly skipping private mortgage insurance (PMI).
Don’t have a stash saved yet? That’s okay. Start by setting up a dedicated savings account for your home fund. Automate contributions so they grow without you having to think about it. Even $100 a month adds up over time. And don’t forget to research down payment assistance programs in your area—there might be free money waiting for you.
5. Pre-Approval > Pre-Qualification
Here’s a quick reality check: sellers and real estate agents take buyers more seriously when they’re pre-approved. Pre-qualification is a nice start, sure, but it’s kind of like window shopping—it doesn’t carry much weight.
Getting pre-approved means a lender has reviewed your finances, run a credit check, and given you a conditional commitment for a mortgage. It shows you’re serious and ready to act. That matters in competitive markets where homes can go fast.
You’ll need proof of income, bank statements, ID, and possibly tax returns. It might feel like a lot, but it’s totally doable, and once it’s done, you’ll know exactly what price range you should be shopping in. No surprises, just clarity.
Wrapping It Up
Buying a home is more than just scrolling through Zillow and picking paint swatches. It’s one of the biggest financial decisions you’ll ever make. But with the right prep, it doesn’t have to be overwhelming.
Take time to build your credit, grow your savings, reduce debt, and understand your true budget. These five money moves may not be as glamorous as a walk-in closet or granite countertops, but they’ll make your entire buying experience smoother, smarter, and way less stressful.
So before you dive into house hunting, do yourself a favor: get your finances in shape. That way, when you do find the perfect place, you can say yes with confidence—and without regrets.
Happy house hunting!