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What to prepare financially
Before you start scrolling through listings and calling agents, let’s talk money. Getting your finances in order now will save you time, stress, and surprises later. The good news? You don’t have to figure it out alone—ModernPad is here to help.
Step 1: Get Your Finances in Shape
Buying a home isn’t just about the price tag—it’s about what you can afford comfortably.
Here’s what to focus on first:
✔ Check & Improve Your Credit Score – A higher score means better loan options and lower interest rates.
✔ Tackle Any Lingering Debt – Reducing your debt improves your ability to qualify for a mortgage.
✔ Start Saving for Your Down Payment & Closing Costs – Ideally, have at least 3-5% down, plus another 3% for closing costs (which cover things like taxes and insurance).
💡 Pro Tip: If you put down less than 20%, most lenders will require private mortgage insurance (PMI)—but don’t stress, we’ll help you navigate that!
Step 2: Get Pre-Approved, Not Just Pre-Qualified
This is a game-changer. A pre-approval letter doesn’t just show what you can afford—it proves to sellers that you’re serious and financially ready. This can make all the difference in a competitive market.
✔ Pre-Qualification = A rough estimate of what you might afford.
✔ Pre-Approval = A lender reviews your documents and gives you an official loan amount.
With pre-approval in hand, you can shop with confidence, make stronger offers, and move fast when you find “the one.
Step 3: Budget for More Than Just the House
Owning a home comes with hidden costs beyond the mortgage.
Be prepared for:
✔ Inspections & Repairs – Finding the perfect home might mean fixing a few things.
✔ Closing Costs – Taxes, lender fees, insurance—it all adds up.
✔ Contingencies & Unexpected Expenses – Life happens, and so do surprise costs.
