Homebuying Readiness
Assess credit, down payment, closing costs, mortgage affordability, reserves, and ownership expenses before pursuing a home purchase.
What Homebuying Readiness gets you.
By the end of this upgrade you will know exactly where you stand on credit, down payment, closing costs, and monthly affordability before you start house hunting.
- Recent credit report and score from all three bureaus
- Current savings balances earmarked for a home purchase
- Last two years of income documentation (pay stubs, tax returns)
- Monthly debt payment list (loans, cards, leases)
- Local property tax and insurance estimates for target areas
Run the upgrade.
- 01
Pull and review your credit reports
Check all three bureau reports for errors, collections, or high utilization and dispute any inaccuracies before applying for a mortgage.
- 02
Calculate your debt-to-income ratio
Add all recurring monthly debt payments and divide by gross monthly income to see where lenders will place you.
DTI = total monthly debt payments / gross monthly income
- 03
Estimate your realistic down payment
List current savings dedicated to the purchase and separate that amount from your emergency fund and other goals.
- 04
Budget for closing costs and reserves
Set aside an estimate for closing costs plus several months of housing payments in reserve, since lenders and unexpected repairs often require both.
Closing cost estimate = target home price x local closing cost percentage
- 05
Model true monthly affordability
Add principal, interest, taxes, insurance, and estimated HOA/maintenance costs, then compare to your take-home pay, not just the lender's preapproval number.
True housing cost = P&I + property tax + insurance + HOA + maintenance reserve
- 06
Get preapproved with at least two lenders
Compare preapproval terms, rates, and fees from at least two lenders to understand your actual borrowing range.
- Credit report errors are resolved or documented as in dispute
- You know your DTI and how it compares to typical lender limits
- Down payment, closing cost, and reserve amounts are separated and funded
- You have a true monthly affordability number you are comfortable with
- You hold at least two mortgage preapprovals
Revisit when
- Your income, debt, or credit profile changes materially
- Interest rates or target markets shift significantly
- Preapprovals near expiration
Mortgage qualification rules, rates, and closing cost norms vary by lender and location — verify current terms with your lender before committing.