# Essential Steps to Buying a Home
1. Check your credit file
It's important to ensure that your credit report is accurate before shopping for a home, as lenders consider your credit score when deciding to approve your mortgage application. Errors or inaccuracies could negatively impact your credit score, resulting in a higher interest rate or even denial of your mortgage application. Checking your credit rating early in the home buying process allows you to correct any issues, improve your score, and increase your chances of obtaining a favorable mortgage rate, saving you money over the life of your loan.
2. Save for a down payment
When buying a home, it's important to be prepared for the costs associated with the purchase. This typically includes a down payment requirement of at least 5% of the purchase price, although some lenders may require more. In addition to the down payment, there are also closing costs, which can range from 1% to 2% of the purchase price. These costs can include legal fees, appraisal fees, title insurance fees, and other expenses associated with the purchase. As a first-time homebuyer, it's important to budget for these costs and ensure that you have enough savings to cover them before making an offer on a home.
3. Get preapproved
Getting pre-approved for a mortgage is important because it helps you determine your budget, shows sellers you are a serious buyer, and identifies any potential issues with your credit or income. This allows you to address any problems and improve your chances of being approved for a favourable mortgage rate.