So you've decided to buy a house. A home purchase is quite a bit trickier than picking up orange juice at your local grocery, and there's more that goes into the quality and attractiveness of an offer than just the purchase price. That's why it pays to be a prepared, informed, and "serious" home buyer.

Avoid negative credit impact

When you purchase a home, if you aren't buying with cash, having a lower credit score will mean lenders offering you higher interest rates. Put yourself in the best position to get the lowest interest rate possible in the months before your purchase by doing the following:

• Don't open new credit cards or other new credit lines.
• Don't close old credit cards or other old credit lines.
• Don't make major purchases requiring loans, like a car.
• Keep credit card utilization low. <10% is ideal.
• Request higher limits for credit cards.
• Pay off past-due balances.
• Pay all bills on time.

Getting pre-approved

Most home purchases involve taking out a loan to pay for the house, known as a mortgage. Before you can make an offer on a home, sellers want to know you’ll be able to pay for it. That’s why the first step to buying a home is to figure out how much house you can afford, and to get pre-approved for that amount by your lender to avoid any surprises down the line.

For an immediate rough estimate, you can use online tools to get a range of your buying power. Here are some helpful resources:

• Bankrate’s Calculator
• Zillow’s Calculator

You'll also want to determine what type of mortgage to get. There are plenty of online resources on mortgage details so we won't dive in too deep here (you'll also likely work with your lender to determine what options are available to you). Here's a brief overview of the major mortgage types and an easy chart to determine which type might be right for you.

• Conventional loans are the "standard" type of mortgage and generally require good credit and a stable income.
  • A "conforming" conventional loan requires a certain minimum credit and income and falls within a set of guidelines such as a set maximum amount of the loan (varies by region but can be $500k-$1.5m).
  • A "nonconforming" conventional loan is simply any loan that does not fall within the conforming loan guidelines.
• FHA loans are insured by the Federal Housing Administration so that the lender is paid back even if the borrower defaults. They can often be more expensive over time due to the additional insurance on the loan.
• VA loans are insured by the Department of Veteran Affairs and are available to veterans only.
• USDA loans are insured by the US Department of Agriculture and are only available to buyers in certain rural areas.
• Jumbo loans are a type of nonconforming conventional loan whose loan amounts exceed the maximum threshold of conforming conventional loans.

Here are some resources to learn more about different loan types and financing options

• 6 Types of Mortgage Loans (creditkarma)
• How to Get A Mortgage (bankrate)

Finally, you'll need to figure out what lender to work with. Here are some tools to help compare national lenders and their rates. There may also be local lenders in your area that can provide more competitive rates - don't hesitate to call and shop around!

• Lender Rate Comparison (nerdwallet)
• Lender Rate Comparison (bankrate)
• Forbes’ Best Lenders for Specific Scenarios (forbes)

Make sure to research additional incentives or offers available in your local area. Many locales have tax breaks or payment assistance for first-generation homebuyers and other demographics. When you've found a lender you want to work with, get a pre-approval letter from your chosen lender. This usually takes 7-10 days, and you’ll need to provide some basic financial documents (W2s, proof of income, tax returns).

Determining your housing criteria

Now that you've figured out how much housing you can afford, let's cover what other questions you should have answered about the house you'd like to buy.

Get acquainted with the neighborhoods in your market. Good real estate agents can be helpful if you’re unfamiliar with the area, but there are also usually helpful guides online. The city's subreddit can be particularly helpful, and talking to someone who's lived in the area is a great source of info.

Determine what location-related criteria are most important to you and your family and use Zillow, Trulia, or other similar sites to find good locations. Some common ones to consider are:

• School zones
• Walkability/transit scores
• Commute times
• Crime & public safety
• Proximity to shops/cafes/bars/parks

Make a list of house-related criteria you want, and figure out which ones are non-negotiable (number of bedrooms/bathrooms, yard, square footage, pool, etc.)

Set up alerts or email digests to be notified of new listings that fit your buy box. Most sites allow you to set up alerts for any searches you make, so you can stay up to date on the newest homes that become available.

You can visit open houses without an agent, but if you want to set up a private tour, most sites will guide you to a buyer agent. If you'd like to avoid committing to a buyer agent when viewing, you can contact the listing agent or seller (their phone number should be on the listing if you look carefully) and coordinate a visit yourself.

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