Simple 6-Month Plan To Buy a House

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Published Aug. 10, 2023
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Buying a home usually is a marathon — but if you have some resources ready to go, you may be able to sprint to the finish line and do it in six months.

That’s an ambitious goal. It’s also an attainable goal, if you make a plan and stick to it.

Here’s how to prepare to buy a house in six months.

How To Buy a House in 6 Months

TimelineHomebuying StepHow To Prepare
Six months outReview your savingsBuying a home requires significant upfront costs, so start by reviewing your savings.
If you’re close to having enough for a down payment and closing costs, then buying a home in six months may be realistic.
If you can afford only a small down payment, then you may be able to buy a home in six months — just know that your loan will come with a higher interest rate.
If you just started saving or have only a fraction of what you’ll need, then you may need to extend your timeline.
Check your creditYour credit score affects your ability to get a mortgage, as well as the interest rate that lenders will offer you.
To get a conventional loan, you’ll need a credit score of at least 620. Federal Housing Administration-backed loans require a credit score of 500. There’s no official credit requirement for Department of Agriculture loans, though many lenders require a score of at least 640. Veterans Affairs loans also have no minimum credit score requirement, but you’ll need to be in the military on active duty, a veteran, or the surviving spouse of a veteran to get one.
Research the marketYou’ll want to understand the housing market so you’re able to find a home that you can afford. The median sales price for new houses sold in the U.S. is $415,400 as of June 2023.
Home prices reflect market conditions such as supply and demand. In a buyer’s market, where the supply of homes available exceeds demand, you’ll have an advantage when negotiating with a seller. When demand exceeds supply, it’s a seller’s market, and you’ll have a lot less leverage.
Mortgage rates also fluctuate and affect how much home you can afford. If you’re buying when interest rates are low, then you may be able to afford a more expensive home. But if interest rates are high, that means you’ll face higher monthly payments that could price you out of the market.
Gather the necessary documentsTo get a mortgage, a lender will review your finances to confirm you can afford a home loan. You’ll be asked for a lot of documents, so gathering them in advance can expedite the process. Expect to be asked for:
— W-2s or 1099s.
— Pay stubs.
— Federal income tax returns.
— Recent bank statements.
— Investment account statements.
— Identification.
— Social Security number.
— Proof of any other sources of income.
Five months outSet a budget you can affordFigure out the upfront and ongoing costs of buying a home, and make sure you can afford them:
Down payment. Conventional loans require a down payment of at least 3%, though you’ll need a 20% down payment to avoid paying for private mortgage insurance. FHA loans require a low down payment of at least 3.5%. VA loans and USDA loans are available for no down payment, but only certain borrowers can get them.
Mortgage payment. You’ll need to make sure you can afford your monthly payment. If you get a fixed-rate mortgage, you’ll have the predictability of knowing what your monthly payment will be for the length of the loan. With an adjustable-rate mortgage, your monthly payment will change, usually once a year.
Closing costs. Closing costs include the fees involved with taking out a loan and finalizing your home purchase. Don’t underestimate closing costs, as they usually total 2% to 5% of the purchase price.
Additional costs. Your lender will require you to have homeowners insurance, and you’ll need to pay property taxes. Most homeowners pay them with an escrow account. If your home belongs to a homeowners association, then you’ll need to pay dues. Also, don’t forget about moving expenses and home maintenance. A good way to anticipate maintenance costs is by setting aside 1% to 2% of the value of the home each year.
Four months outShop around for mortgagesThere are many types of mortgage lenders and loan options. In addition to choosing between a fixed-rate mortgage and an ARM, you’ll also choose a loan term — 30 years and 15 years are the most common. A shorter loan term means higher monthly payments but lower interest rates and total costs. A longer term reduces the monthly payment but typically comes with higher interest rates and overall costs.
When comparing loans and choosing a mortgage lender, a figure to pay attention to is the annual percentage rate, or APR, which represents the annual cost of the loan.
Three months outGet preapproved for a mortgageMortgage preapproval is a letter from a lender that indicates how much of a loan it expects you to qualify for when you apply. While preapproval isn’t a guarantee that you’ll get that loan, it shows you, real estate agents, and sellers how much you should be able to borrow to buy a home. Keep in mind that preapproval letters expire — typically after 30 to 60 days — so make sure you’re on track to buy a home before you get one.
Hire a real estate agentA real estate agent or Realtor can be a key ally in navigating the homebuying process. You can lean on your agent’s knowledge and experience to make an offer, to negotiate the price, and to close on the home.
You’ll want an agent who’s familiar with the local market and has a record of helping buyers find a home. Ask your family, friends, and colleagues who have recently bought a home if they would recommend their agent. You also can research agents online. Interview several potential agents and choose one you trust and think you can work well with.
Start touring homesThis is the fun part! With a preapproval letter in hand and an agent at your side, start touring homes in your price range and desired location. It’s one thing for a home to be appealing in a listing, but you won’t know for sure until you see it in person.
Attend as many showings and open houses as you can and ask questions, so that you can compare and contrast available properties. House tours also give you an opportunity to figure out your wants, needs, and must-haves in a home.
The homestretchMake an offerWhen you find a home you want to buy, your agent will help you decide on and make an offer to the seller. The market will influence whether you can offer less or need to offer more than the listing price. It also will affect which contingencies you include in the offer.
Contingencies are conditions that must be met for the sale to close. If any contingencies aren’t met, you can back out of buying the home without penalties.
Some contingencies are essential. For example, a home inspection contingency lets you cancel a deal if the home is found to be unsafe or in need of major repairs.
Asking for too many contingencies could discourage a seller from accepting your offer in favor of one that waives contingencies and the buyer is less likely to walk away from.
Sign a purchase and sale agreementIf the seller accepts your offer and terms, then you’ll sign a purchase and sale agreement. This is a binding contract that spells out the terms of the sale, including the purchase price and contingencies. At this point, most buyers pay earnest money — also known as a good faith deposit — of 1% to 3% of the purchase price.
Apply for a mortgageNow it’s time to make it official with your lender and apply for a mortgage. You’ll submit required financial documents for your lender to review in the underwriting process. Your lender will look into your credit history, calculate your debt-to-income ratio, verify your income and employment, and order a home appraisal.
If you’re approved, you’ll receive within three days a loan estimate that details your loan terms, including the monthly payment, interest rate, and fees.
Get a home inspectionA licensed third-party inspector will examine the home’s interior and exterior and report on their condition. The inspector will test the home’s major systems — electrical, plumbing, heating, cooling, etc. — and structure, and their report will include any findings of damage, flaws, and safety hazards.
If the home inspection reveals problems, you can ask the seller to make repairs or compensate you to cover their cost. If the seller won’t budge, you can walk away from the sale if you have an inspection contingency in your contract.
Have the home appraisedFor the home appraisal, another third-party inspector will tour the property, research the market, and determine the fair market value of the home. Lenders require appraisals to make sure the home’s value justifies the loan amount. It also lets you know if the price you’re paying is fair.
Close on your new homeAt least three days before closing day, you’ll receive from your lender a closing disclosure. This five-page document includes the final details of your loan, including the monthly payment, interest rate, and fees.
On closing day, you’ll sign the necessary documents, make your down payment, and pay your closing costs. Then, the title to the property will be transferred to your name, and you’ll get the keys to your new home.


Here are answers to some common questions about how to buy a home in six months.


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