If you dream of buying a home one day, you’ve probably already thought about what you’re looking for: One story or two? House with friends? Fixer upper or turnkey?
But there’s more to buying a home than thinking about the aesthetics — it’s one of the largest financial decisions you can make, and you’ll want to be as prepared as possible to make the transaction go smoothly. To get started, consider how much time and planning go into each step of the process.
Homebuying timeline for first-time homebuyers
Timeline | Focus Area | Key Action |
|---|---|---|
6 to 12+ Months Before | Review your finances | - Secure your down payment - Set your homebuying budget - Start looking at mortgage lender options |
6 to 12+ Months Before | Prep for the house hunt | - Pick your neighborhood(s) - Identify your home needs vs. wants - Research real estate agents |
2 to 6 Months Before | Documentation & Team | - Collect required paperwork for mortgage pre-approval - Select your real estate agent |
1 to 2 Months Before | Financing | Get pre-approved for your home loan (typically good for 60 to 90 days) |
1 to 2 Months Before | The house hunt begins | - Find your home - Make an offer and negotiate - Sign the contract |
30 to 45 Days Before | Finalizing the Deal | - Finalize your home loan - Schedule an inspection - Complete the closing process |
Closing Day | The Finish Line | Sign the final paperwork |
Get your finances in order
Before searching the internet or walking into an open house, it’s important to get your financial ducks in a row. Do you understand the true cost of homeownership? Have you started saving for a down payment? Are you aware there are different homebuyer programs designed to help you qualify for a mortgage? Thinking about your finances should be the first step in the journey to homeownership.
Read more: See how Ally can help you save for a down payment.
How to find the right real estate agent for you
Working with a real estate agent can be helpful when purchasing your first home. When speaking with prospective agents, ask these key questions to make sure you’ve found your match:
Are you licensed?
How long have you been in the real estate industry?
How many clients are you currently working with?
Remember that you can negotiate real estate agent fees to find a price that both you and your agent agree on.
Discover your perfect neighborhood
Whether you’re debating between the city and suburbs or comparing school districts, you have a lot to consider when selecting a location. As you map out your priorities for your future neighborhood, keep these key elements in mind:
Consideration | Why it matters |
|---|---|
Safety | You want to feel secure in your new home. Online mapping tools can help you research. |
Budget | Choose a neighborhood that fits both your budget and lifestyle. An Ally Bank Savings Account can help you start saving for your first home. |
Essentials | While grocery stores, pharmacies and gas stations don’t need to be around the corner, you may not want to trek 30 minutes to make your weekly food run. |
Commute time | Unless you work from home, you’ll want to consider how long your commute to work will be. |
Schools | If you have kids or plan to start a family, research nearby schools and see what districts your potential homes are in. Tip: Even if you don’t plan to have a family, school districts can affect home value. |
Perks | Create a list of nice-to-haves on your neighborhood wish list. Think: Gym nearby, a nice coffee shop within walking distance or a dog park for your furry friend. |
Get pre-approved on a home loan
You have options when getting pre-approved (which may be considered pre-qualification by some lenders).
Pre-approval letter: provides a documented estimate of how much you can borrow to buy a home and can help you better understand how much you’ll need to save for a down payment.
Verified pre-approval letter (VPAL): delivers the same, but with even closer scrutiny from your potential mortgage lender.
Approval Process | Pre-approval | VPAL |
|---|---|---|
Info required | Self-reported estimate of your income, assets, etc. | Documents including proof of income (recent W-2s, tax returns, pay stubs, bank statements) |
Credit check | Hard credit pull (may cause your credit score to drop temporarily) | Hard credit pull (may cause your credit score to drop temporarily) |
When to apply | When you want to get an idea of how much home you could afford | When you are actively searching for a house |
How to make a competitive offer on your first home
After you’ve walked through the doors and fallen in love with a home, it’s time to present an offer to the home seller. If you’re working with a real estate agent, they can help you determine the value of the property and negotiate the price, but that first offer sets the tone.
While your budget is the most important factor to consider when buying a home, you should also think about:
The quality and characteristics of the home
The location
Price changes
How motivated the seller is
How much you want the home
Pave the way toward your first home
The road to home ownership looks different for everyone and the process can seem daunting. Mapping out key checkpoints along the way can keep you focused and motivated as you work toward your first home.
