If you’re thinking of buying a home but don’t know where to begin, you’re not alone. Many first-time homebuyers are daunted by the process. One way to make your dream of homeownership feel more achievable is to divide the process into smaller steps. With that in mind, here are eight steps for buying a home:

1. Consider Your Finances

As with any major purchase, you’re going to want to consider your current financial situation before proceeding. Mortgage lenders will look at your credit score, debt-to-income ratio, savings, and employment situation, so it’s important to evaluate these areas.

Many credit card companies will give you free estimates of your credit score, and you can also request your credit score once annually from each of the big three credit agencies: Experian, Equifax, and TransUnion. If you realize your score is lower than average, you may want to consider improving it before buying a home, because those with prime scores (670 and up) typically receive lower interest rates.

You should also take a look at your savings and do a rough calculation of how much you’ll need for a down payment and closing costs. You can use a mortgage affordability calculator so you don’t leave out any major factors.

Many people cite 20 percent as the minimum down payment, but this is absolutely not required. First-time homebuyers, and those who opt for government-backed mortgage loans, can put down as little as 3 percent or even zero percent in some cases. If you put down less than 20 percent, your monthly payments will be higher and you will have to pay for mortgage insurance. However, if insurance costs and higher monthly payments don’t scare you, putting less money down can be a better option than draining your savings account.

It’s wise to keep a cushion of savings in case you need to make any urgent repairs on your new home. If you look at your finances and realize you’re not financially ready to buy now, you can create a personal budget and savings plan so you can afford a home in the near future.

2. Get Pre-Approved for a Mortgage Loan

You’re going to want to meet with a mortgage lender early in the process, because they can help you get a better idea of how much home you can afford. A lender can look at your financial situation during the prequalification process and provide you with a rough estimate of the loan amount you qualify for.

A mortgage prequalification solidifies into a pre-approval once your information has gone through the underwriting process. Proof of pre-approval is all but essential if you want a seller to accept your offer on their home, because it shows you’re serious and able to afford it. You will need several documents for pre-approval, including W-2s, your credit score, and employment verification, so make sure you’re able to access those.

→ Want to learn more about everything that goes into the home-buying process? Read our Ultimate Home Buying 101 Guide.

3. Find a Real Estate Agent

Hiring a real estate agent is not required, but it’s certainly recommended. A good agent can help you find a home that fits your needs, is experienced in contract language, understands the market, and knows how to negotiate. Plus, the seller pays their commission, so you have nothing to lose. In order to find the right agent, ask friends and family for recommendations and check reviews online. You may also want to hire a real estate lawyer, which is a requirement in some states, but good to have regardless.

4. Begin Looking at Homes

Now that you know what you want and can afford, it’s time to shop around. Be sure to look both at the home itself, as well as the neighborhood, location, and value of nearby homes. As you tour properties, take some time to walk the neighborhood and get a feel for the area. If you commute to work, check to see how long it will take to drive to work from each home you’re interested in. And whether or not you have kids, you should make sure the home is located in a good school district, because that will affect that home’s value.

5. Make an Offer

Once you’ve found a home you want, you will work with your agent to put in an offer. For this step, get a pre-approval letter from your lender and send it to the seller, along with your offer price and any contingencies you might have. For example, if you want to have a home inspection before closing, you can say the purchase is contingent upon that. If you’re in a competitive seller’s market, you may have to put in an offer that’s higher than the list price and forego any contingencies. You may also consider adding a personal touch, like a handwritten letter, to set your offer apart from the others.

6. Conduct a Home Inspection and Buy Insurance

If your offer included a home inspection, hire a trusted inspector and have them be as thorough as possible. Try to be present for part of the inspection so you can ask questions directly and take a look around the home yourself. You will also need to buy home insurance before closing day. Make sure the insurance will cover the cost of completely rebuilding if the house is destroyed.

7. Close on the Home

Closing day is when all the contracts are signed and keys are turned over. The contracts should include the official move-in day, so you can start making moving plans.

8. Move In and Make It Your Own

If there’s a gap of time before you move into your new home, consider doing some renovations on the home, such as painting the walls or installing new flooring, so the space can be move-in ready. It’s also a good idea to set up utilities in advance, so your home is fully functional right away. Aside from that, it’s up to you to make the space your own and enjoy homeownership!

Take the Next Step Toward Homeownership

Buying a home is, of course, easier said than done. To discover more advice from loan officers who know the process well, check out our Guide to Navigating the First-Time Home-Buying Process.

Mortgage prequalification