Assess Finances
1-2 hoursReview income, existing debts, credit score, and savings to establish your baseline financial health before house hunting.
Field context
This workflow is part of 5 niche fields
Home buying planning guide with affordability calculations, down payment scenarios, rent-vs-buy analysis, mortgage comparisons, and closing cost estimates.
Review income, existing debts, credit score, and savings to establish your baseline financial health before house hunting.
Determine how much home you can afford based on down payment, interest rates, and monthly budget constraints.
Run a rent-vs-buy analysis to confirm that purchasing makes financial sense for your timeline and local market.
Gather documents and apply for mortgage pre-approval to know your exact borrowing limit and strengthen offers.
Search listings within your approved budget, attend showings, and submit competitive offers backed by your pre-approval letter.
Finalize your loan, review closing disclosures, wire funds, and complete the purchase at the closing table.
Map monthly income and expenses to determine how much you can allocate toward housing costs. · Ensure total housing costs including taxes and insurance stay within your budget.
Estimate total debt obligations and monthly payment capacity before applying for a mortgage. · Model pre-approval loan scenarios with different terms and interest rates. · Review final loan terms and amortization schedule before closing.
Calculate monthly mortgage payments across different loan amounts, rates, and terms. · Verify monthly payment fits budget before submitting a purchase offer.
Determine required down payment amounts and how long it will take to save the target sum.
Project savings growth timeline to reach your down payment and closing cost targets. · Confirm remaining emergency fund after closing costs and down payment.
Compare total cost of renting versus buying over your expected stay period.
Minimum down payment percentages vary by loan program. Conventional loans typically require 5-20%, while government-backed programs offer lower thresholds.
| Loan Type | Min Down Payment | PMI Required | Credit Score Min |
|---|---|---|---|
| Conventional | 3-5% | Yes (if <20%) | 620 |
| FHA | 3.5% | Yes (MIP) | 580 |
| VA | 0% | No | No minimum |
| USDA | 0% | No | 640 |
| Jumbo | 10-20% | Varies | 700+ |
Rate locks typically last 30-60 days. Lock when rates drop or when you are within 30 days of closing — extending locks costs extra fees.
Do not open new credit cards, buy a car, or change jobs between pre-approval and closing. Lenders re-verify finances before funding.
In buyer-friendly markets, ask sellers to cover closing costs or include appliances. This can save $5,000-$10,000 out of pocket.
A lower interest rate with high origination fees may cost more than a slightly higher rate with no points. Calculate APR and total interest paid.