First-Time Home Buyer Timeline: What to Do 1 Year, 6 Months, and 30 Days Before Closing

The biggest financial decision most people ever make is buying a home — and most first-time buyers navigate it with almost no preparation, learning by trial and error at every stage. Paperwork surprises, credit hiccups, failed inspections, and closing delays are common because buyers didn't know what was coming.

This timeline changes that. Whether you're 12 months from buying or just starting to think seriously about it, here's exactly what to do and when.

12 Months Out: Build Your Financial Foundation

With a year to go, your focus is entirely on positioning — getting your finances, credit, and savings in the best possible shape.

Check your credit report and score Pull your free credit reports from AnnualCreditReport.com (the official free source — not a paid site). Review all three bureaus (Equifax, Experian, TransUnion) for errors. Dispute any inaccuracies in writing — disputes can take 30-60 days to resolve, which is why you need this lead time.

Your credit score significantly affects your mortgage rate:

If your score is below 740, spend this year improving it: pay down credit card balances (aim for under 30% utilization per card), don't close old accounts, and avoid new credit inquiries.

Calculate your true budget The mortgage industry will approve you for more than you should borrow. Use this framework instead:

• Monthly housing costs (mortgage principal + interest + taxes + insurance + HOA if applicable) should not exceed 28% of gross monthly income
• Total debt payments (housing + car + student loans + minimum credit card) should not exceed 36% of gross monthly income

This is the classic 28/36 rule. Lenders often approve up to 43-45% total debt ratio, but living at 43% of income going to debt is financially stressful.

Determine your down payment goal Standard down payment options:

Don't wait for a perfect 20% if your rental costs are high. Do the math: if PMI costs $100/month but you could have bought 2 years earlier, you may have missed significant equity and tax benefits. PMI can be removed once you hit 20% equity.

Open or increase savings Set up automatic transfers to a dedicated HYSA earmarked for your down payment. Calculate how much you need to save per month to hit your goal in 12 months.

9 Months Out: Research and Educate

Research first-time buyer programs Most states and many cities have first-time homebuyer assistance programs: down payment grants, low-interest second mortgages, closing cost assistance, or reduced-rate first mortgages. The HUD website (hud.gov) lists state housing agencies.

Common federal programs:

• FHA loans: Lower down payment, more flexible credit requirements, but require mortgage insurance
• VA loans: 0% down for eligible veterans and service members — exceptional deal if you qualify
• USDA loans: 0% down for rural and suburban properties — check USDA's eligibility map

Choose your target area Research neighborhoods: school districts, crime statistics, walkability, commute time, future development plans. Sites like Walk Score, GreatSchools, and local city planning departments provide useful data.

Understand true homeownership costs New buyers commonly underestimate:

• Property taxes (often 1-2% of home value per year)
• Homeowner's insurance ($1,000-$3,000/year depending on location and coverage)
• HOA fees (can be $200-$600/month in some communities)
• Maintenance and repairs (budget 1-2% of home value per year)
• Utilities (typically higher than apartment)

6 Months Out: Get Pre-Qualified and Agent Ready

Get mortgage pre-qualification (not pre-approval yet) Pre-qualification is an informal estimate of what you might borrow based on self-reported income and assets. It costs nothing, doesn't affect your credit, and helps you understand your approximate range. It is not a commitment — save that for closer to active shopping.

Choose a real estate agent Interview 2-3 buyer's agents. Ask:

• How many buyers did you represent in the past 12 months?
• What's your experience in my target area and price range?
• How will you communicate with me, and how quickly do you respond?
• What happens if I'm unhappy with your service?

In most transactions, the buyer's agent is paid through the seller's commission (though this is changing in some markets post-2024 NAR settlement). Clarify compensation upfront.

Start touring homes (not to buy yet) Open houses and informal tours teach you what you actually want versus what you thought you wanted. After seeing 10-15 homes, you'll have much clearer priorities. This is purely educational at this stage.

3 Months Out: Get Serious

Get mortgage pre-approval Pre-approval is a formal process: the lender verifies your income (W-2s, tax returns, pay stubs), assets (bank statements), employment, and pulls a hard credit inquiry. You receive a pre-approval letter stating the amount you can borrow.

Shop multiple lenders. Getting 3-5 mortgage quotes can save tens of thousands over the loan's life. Multiple mortgage credit inquiries within a 14-45 day window (depending on scoring model) count as a single inquiry.

Compare:

• Interest rate
• Annual Percentage Rate (APR, which includes fees)
• Origination fees and points
• Closing costs

Lenders: national banks, credit unions, mortgage brokers, and online lenders (Better.com, LoanDepot, Rocket Mortgage) all compete for your business. Credit unions often offer competitive rates.

Define your non-negotiables Make a list: minimum bedrooms/bathrooms, garage, yard, commute limit, school district. Know what you'll compromise on and what you won't.

30-60 Days Out: Active Offer Phase

Submit offers Your agent will pull comparable sales ("comps") to inform your offer price. In competitive markets, you may need to submit multiple offers before one is accepted. Understand escalation clauses and what contingencies to include.

Essential contingencies to include:

• Inspection contingency: Right to negotiate or walk away based on inspection findings
• Financing contingency: Protection if your mortgage falls through
• Appraisal contingency: Protection if the home appraises below purchase price

In very hot markets, buyers sometimes waive contingencies to compete — consult with your agent on the risks.

Schedule a home inspection Once under contract, hire an independent home inspector (not one recommended by the seller's agent). Cost: $300-$600. Worth every dollar. Inspectors find issues you won't see: roof condition, HVAC age, foundation concerns, electrical problems, plumbing issues.

Use inspection findings to negotiate credits or repairs, or walk away from a serious problem property.

The Final 30 Days: Closing

Prepare for closing costs In addition to your down payment, budget 2-5% of the loan amount for closing costs:

Get a final walkthrough. Do this 24-48 hours before closing to verify the home is in agreed condition, repairs were completed, and no new damage has occurred.

Wire funds carefully. Real estate wire fraud is common. Call the title company using a verified phone number (from official documents, not email) to confirm wiring instructions. Never trust emailed wire instructions without verbal verification.

Bring to closing:

• Government-issued ID
• Cashier's check or proof of wire transfer for closing costs
• Checkbook for any last-minute adjustments

After signing, you'll receive keys. The home is yours.

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