Consumer Products Lending
First-Time Homebuyer Checklist: Everything You Need Before You Buy
July 14, 2025
Buying your first home is an incredible, and sometimes overwhelming milestone in your life. Here at Peoples Savings Bank, we want to make the process easier and as stress-free as possible.
Whether you’re just starting to explore your options or you’re ready to move on the home of your dreams and apply for a mortgage, this first-time homebuyers’ guide will help you feel prepared and confident!
Preparation Matters
Having all your documentation in order before you apply for a mortgage can help significantly speed up the approval process while also increasing your chances of securing a favorable loan. Our helpful checklist will walk you through everything you should have on hand before submitting your mortgage application.
1. Know Your Budget
The first step in the homebuying process is to know how much house you can afford. Use a mortgage calculator, like the one you can find through Peoples Savings Bank, to estimate your monthly payments, including:
- Principal and interest
- Property taxes
- Homeowners insurance
- Any HOA fees, if applicable
2. Personal ID
Make sure that your identification is current and matches up with the application details. Most lenders will ask you to provide:
- A government-issued ID (driver’s license or passport)
- Your Social Security number or card
- Proof of residency or legal status, if applicable
3. Employment Verification
Most mortgage lenders require at least two years of consistent employment to consider you for a mortgage. Be sure you’re ready to provide:
- Employer contact information
- An explanation for any job gaps
- A recent offer letter, if you’ve just started a new job
4. Proof of Income
Any lender you try to work with is going to want to see that you have a stable income that will be able to support a mortgage payment. As such, you should be prepared to provide:
- Your most recent pay stubs for the last 30 days
- Two years of W-2s (or tax returns if you’re self-employed)
- Documentation for any extra income, like bonuses, alimony, or side work
5. Credit Score & Credit Report
Your credit score plays a major role in determining both your mortgage rate and your eligibility for a loan. Be sure to thoroughly check your report for any errors and take the necessary steps to improve your score if needed.
Most lenders are going to want to see a credit score of 620 or higher to feel confident in your ability to afford a home, though there are some programs available that accept lower scores. Before seeking a loan, be sure to dispute any inaccuracies you find in your report and do your best to pay down high-interest debts. You can also reach out to our team for personal banking support if you have questions about your credit or debt.
6. Debt-to-Income Ratio (DTI)
Your debt-to-income ratio (DTI) is also important, as it helps lenders see if you can handle new monthly payments. This ratio is calculated by adding up all of your monthly debt payments and dividing by your gross (not net) monthly income.
Before you get too far into the home buying process, it’s a good idea to pay off your debts to lower your DTI. If possible, raising your income level is another great way to lower this ratio.
7. Down Payment & Savings
For most first-time homebuyers, you’re going to need to provide a down payment that is anywhere between 3 and 20% of the home’s purchase price. It’s important to note that the down payment does not include funds for:
- Closing costs (typically 2%-5% of the loan amount)
- Moving expenses
- Any needed home repairs when you move in
Make sure you account for these additional expenses when you’re setting your budget for the home. To help you build your own down payment fund, check out our flexible savings account options.
8. Pre-Approval Letter
Being able to provide sellers with a pre-approval letter will show them you’re serious about buying a home and have a clear budget in mind. To get pre-approval, you’ll need:
- Proof of income
- Your credit report
- Recent bank statements
- ID and Social Security number
Learn more about how to apply for a mortgage with Peoples Savings Bank and get pre-approved today.
Your First Home Starts Here
Buying a home is a big step, but with good prep, it doesn’t have to be stressful. Peoples Savings Bank is here to help first-time buyers feel confident every step of the way.
Ready to get started? Call us or stop by one of our branches to talk with a local mortgage expert today!
Member FDIC and Equal Housing Lender