First-home buyers should be prepared with as much information about proper home purchase before they begin their search. Buying a first home shouldn’t be taken lightly, so the more you know – the better. The current mortgage and real estate markets should be studied and understood. Here is a list of things you should do before moving toward the “big purchase”.

#1 Money in the Bank

If you’re considering to purchase a house in the near-future and happen to have $25,000 in your bank account, be sure not to spend it. It’s really not the time to engage in a shopping spree or buy a 1970 Dodge Challenger you’ve wanted for so long. You should have enough money for the down payment (at least 20% of the house’s purchase price) and additional costs such as private mortgage insurance.

#2 Resolve Debts

Focus on raising your credit score, paying bills on time, and paying down your credit cards. When the time for requesting a loan comes, have something that your future mortgage lender would like to see. Without a good credit score, you may not get a loan or (in the best case) a good interest rate.

#3 Check the Documents

The vital part of any property investment is checking the property documents. You should take a look at the sale deed (a legal document that acts as a proof of sale), title deed, and occupancy certificate (a proof that the residence has the necessary electrical, sewage and water connections). By checking the mother deed document, you will be able to trace the complete former ownership of that property. Companies such as Family WIlls can help you with obtaining these documents in order to be sure that all previous sales were conducted in compliance to laws and regulations concerning property sales.

#4 Think about Ways of Paying

Will you take out an adjustable-rate mortgage or a fixed-rate mortgage? The interest rate for an ARM is quite low, so it might fit if you don’t plan to live in your house for long. On the other hand, you’ll get the lowest rate available and your payment won’t stay the same, but will adjust during the course of several years. It would be scary to realize that your interest has gone up due to an unpredicted economic change. Think about whether you plan to live there for a few years or for the rest of your life. It dictates your payment ways and the possible length of your loan.

#5 Gather Other Paperwork

Besides the property ownership documents, you’ll need to obtain paperwork that includes your canceled checks for utility or rent, recent paycheck stubs, and federal income tax records, student loan or credit card information, and anything that your lender might prefer to see.

#6 Scout Out for the Right Neighborhood

Don’t go wide to a whole geographical area, but narrow down your location choice to specific neighborhoods. Many of them differ and change from block to block. Different communities have different tax rates, so you would like to move in somewhere affordable. You should be aware of what your money will get you in your favorite neighborhood.

#7 Make a Reasonable Offer

If you’re completely inexperienced in pricing an offer on a home, then getting help from a real estate agent would be the right decision. They know the real estate market, can run comparable sales in a given area, gain insights to price ranges per square foot in recent sales. This can help you decide how much should you offer for a home.

It’s not much of a fun job, everyone will tell you that. However, if you want to avoid any kind of future problems regarding the legality and functionality of your home, you should give your best to make all the necessary preparations before purchasing your first home. That’s a lot of headaches avoided in the years to come.