Getting Ready

Buying a home is a big step. It takes time. Start by organizing your finances.


Put money in a savings account each month for a downpayment. You can make a downpayment of 3% to 20% or more if you wish. However, aim to make the largest possible downpayment. If your downpayment is less than 20%, lenders require that you pay extra for private mortgage insurance (PMI) and your monthly payments will be higher.

Housing Counseling

Enroll in a HUD certified counseling program that helps buyers get ready for home ownership. To find a local program go to the Housing Counseling page on the HUD website or call 800-569-4287.

Credit History

You'll get a lower interest rate on your mortgage if you have good credit. The best way to have a good credit record is to pay your bills on time. Get free copies of your credit report at the Annual Credit Report website or call 877-322-8228. If you find a mistake, follow the directions in the report for disputing errors.


Track your spending by keeping a list. Can you trim expenses and have more money to save for a home? For more about budgeting, check out the "Manage Your Money Wisely" article on MoneyWi$e.

Income and Assets

Add up your income (wages, child support, benefits, etc.) and assets (money in checking, savings and retirement accounts).


How much do you owe? List all your monthly bills, rent, insurance premiums, payments due on car loans and credit cards, etc.

Consumer Action's Housing Information Project created this brochure in partnership with Capital One Services, Inc. © 2007 Consumer Action. Rights Reserved.