Here’s a simple step-by-step guide to go from renting to owning—just the financial side of things:

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1. Check Your Credit Score

• Aim for 620+ for most conventional loans, but 580+ works for FHA
• Higher score = better rate = lower monthly payment
• Pull your free credit report and fix any errors

2. Save for a Down Payment

• FHA: 3.5%
• Conventional: 3–5% (or more to avoid mortgage insurance)
• VA/USDA: 0% if you qualify
• Also save for closing costs (2–5% of purchase price)

3. Lower Your Debt-to-Income Ratio (DTI)

• Lenders like to see DTI below 43%
• That means your monthly debt (loans, credit cards, etc.) stays under 43% of your gross monthly income
• Pay down debt to qualify for more

4. Get Pre-Approved for a Mortgage

• A lender checks your credit, income, assets, and debts
• You’ll get a pre-approval letter showing how much you can borrow
• Use that number to start house shopping smartly

5. Don’t Open New Debt Before Closing

• Don’t get a new credit card or car loan
• Lenders will re-check credit before closing and can pull your approval

6. Keep Track of Paperwork

• You’ll need:
  • 2 years tax returns
  • Recent pay stubs
  • Bank statements
  • Proof of any gift money

7. Talk to a Lender Early

• Even if you’re not quite ready, a lender can help create a plan
• Some even offer credit coaching or low-income programs