First-time buyer readiness checklist

By Gerald Kensinger · Updated October 10, 2026 · Education only

Work through these six steps before you apply for a mortgage. Check items off as you go. Your checks reset when you leave the page, so print it if you want to keep a copy.

1. Know your numbers

• Write down your monthly take-home pay and your fixed bills.
• Decide on a total monthly housing payment you are comfortable with, not just the largest one a lender might approve.
• List every debt and its minimum monthly payment. Your debt-to-income ratio is your total monthly debt payments divided by your gross monthly income.
• Remember that the payment includes property taxes, homeowners insurance and, with some loans, mortgage insurance, not just principal and interest.

2. Check your credit

• Pull your reports from Equifax, Experian and TransUnion at AnnualCreditReport.com. The Federal Trade Commission says the bureaus now offer free weekly reports there. Other sites may charge fees or be scams.
• Read each report for accounts you do not recognize, wrong balances and late payments that are not yours.
• Dispute errors with the credit bureau yourself and keep copies of everything you send.
• Pay down credit card balances where you can, and pay every bill on time from here on.
• Hold off on opening new credit accounts until after you close.

3. Gather your cash

• Estimate your down payment for the loan types you are considering.
• Add closing costs, which are separate from the down payment.
• Plan to keep savings in the bank after closing for repairs and surprises.
• Keep your funds in your own accounts. Lenders commonly ask you to explain and document large deposits, so avoid moving money around without a paper trail.

4. Collect your documents

Lenders commonly ask for these. Self-employed buyers usually need more, so ask what applies to you.

• Recent pay stubs.
• Two years of W-2s or tax returns.
• Recent bank and investment statements.
• Photo ID.
• A note explaining any gaps in employment, past credit problems or large deposits.

5. Shop for your lender

• Request a Loan Estimate from at least three lenders on the same day, for the same loan amount, loan type and rate lock period.
• Compare the rate, monthly payment, cash needed at closing, points, lender credits and the APR. Our points guide shows how.
• Look up each loan officer at NMLS Consumer Access to confirm they are licensed and see their record.
• Ask each lender how long the rate lock lasts and what it costs to extend.

6. The final stretch

• Do not make large purchases or take on new debt before closing. Lenders can check your credit again late in the process.
• Keep paying every bill on time.
• You should receive your Closing Disclosure at least three business days before closing. Compare it with your Loan Estimate line by line.
• Ask about anything that changed, and ask before you sign.

This checklist is for education only. It is not financial, legal or credit repair advice and is not an offer to lend. Requirements vary by lender and loan program. See our full disclaimer.

Sources

• Credit reports are now free every week. Federal Trade Commission.
• Loan Estimate explainer. Consumer Financial Protection Bureau.