What is the first step in buying a home?

Question

Zoltan Peresztegi · Answer

Forty-nine answers here already say get preapproved, and they are not wrong. But there are two steps that come before it, and doing them first is the difference between a preapproval that confirms your plan and one that sets it for you. Step one: pull your own credit before a lender does. Go to AnnualCreditReport.com, which is the federally authorized free source, and get all three bureaus. You are looking for errors, not just your score. A collection that is not yours, a paid-off account still showing a balance, an old address that is not you. Disputes take roughly 30 days, and a corrected report before you apply is worth far more than the same correction mid-escrow, when it can delay or kill your closing. Two things people do not know. Mortgage lenders use older FICO scoring versions than the app on your phone, so the number you have been watching is usually not the number they will see. And with three scores, lenders typically use the middle one, or the lower of the two middles if you are applying with someone else. So your partner's credit matters as much as yours. Also, if you have a credit freeze on, plan to lift it. It will stop the application cold. Step two: decide your own payment ceiling before anyone hands you a number. Write down what you are willing to pay every month, including taxes, insurance, mortgage insurance if you are under 20 percent down, and HOA dues. Do that before the preapproval, because once a lender tells you a number, it anchors you, and their number is a maximum, not a recommendation. Then get preapproved, and hold the lender to two things: a full preapproval with documents reviewed, not a prequalification off a phone call, and a Loan Estimate. The Loan Estimate is a standardized federal form that lists every fee by name. Get one from three lenders on the same day and you can actually compare them, which is otherwise close to impossible. Only then start looking. Touring first and financing later is how people fall in love with a house that was never available to them. One note for anyone finding this now: this was asked in May 2021 when 30-year rates were near 3 percent. In late July 2026 the national average is around 6.58 percent, so any payment math in the older answers here is well out of date. Also ask your lender about rate lock timing, which barely mattered in 2021 and matters a great deal now. I am a real estate professional, not a lender, so the credit and loan specifics belong with a good loan officer. I work in Los Angeles and the South Bay and I am glad to help you find one, or a strong agent wherever you are buying. Zoltan Peresztegi, Los Angeles and South Bay real estate professional