The Ultimate Home Buying Checklist (from a Wealth Manager’s Perspective)

A home buying checklist is most useful before you start looking at houses. Buying a home is often the biggest financial decision you will make, and most people approach it with emotion first: the excitement, the fear of missing out, the pressure to get into the market. The financial side effects and long term impact get considered later. I think that is backwards, which is why I created a checklist to use with my clients.

This article covers the 5 sections of that checklist: what you can afford, preparing your finances, mortgage terms, insurance, and what to do after the purchase.

How much house can you afford?

The first question should be how much house, before which house. Too often people stretch too far and become house poor, with all of their cash going to the mortgage and nothing left for travel, investing, or sleeping well at night. Three steps help avoid that:

1. Review your monthly cash flow. What is coming in, what are your fixed costs, and what are you saving each month?
2. Understand the all in housing cost. That means the mortgage payment plus property taxes, homeowner insurance, HOA fees, and maintenance.
3. Think about your time horizon. Are you likely to stay 2 years or 25 years? The shorter the stay, the more conservative you want to be.

A lender might approve you for a big number, but being approved does not mean you should borrow it. As a general rule of thumb, housing costs should stay under 28% of your gross income and total debt under 36%.

How to prepare your finances before buying a home

• Credit score. For the best mortgage rates, aim for 720 or higher. Paying down consumer debt, if you can, will greatly improve your odds.
• Down payment. You can buy a home with less than 10% down, but if possible aim for 20% or more. That way you avoid private mortgage insurance and get better terms.
• Closing costs. These are usually 1% to 5% of the total purchase price.
• Move in budget. Furniture, small repairs, moving costs, and cleaning add up. A common shock for home buyers is the $8,000 they spend in the first 3 months just to get settled.

Mortgage terms and options to compare

This is where eyes glaze over, but you could save or lose tens of thousands of dollars here.

• Fixed versus adjustable rate. With a fixed rate, your payment stays the same for the life of the loan. An adjustable rate is cheaper upfront, but the rate can rise later, which is risky if interest rates move against you.
• 15 year versus 30 year. A 15 year loan means higher monthly payments, a faster payoff, and less interest. A 30 year loan gives you lower payments and more flexibility, but you pay more interest overall.
• Conforming versus jumbo. In 2025, a conforming loan is anything under $806,000. Conforming loans are easier to underwrite and come with slightly better rates. Jumbo loans are for bigger amounts and have stricter requirements.
• Points. You pay upfront to lower your interest rate. It can be a smart move if you know you will be in the house long term, but do the math.
• Escrow. Your lender collects property taxes and insurance as part of your monthly payment. Some people love the convenience and others prefer to handle it themselves. Neither is wrong, and most people use escrow.

What home insurance should cover

Do not overlook insurance. You can base coverage on the rebuilding cost of the house or on the purchase price. Replacement cost coverage pays to rebuild at today's prices, and if you can get it, it is a great option. Remember to cover personal belongings, including valuables you plan to keep in the home. Standard policies do not cover floods, earthquakes, or mold. I recommend working with a local broker who knows your market and can walk you through the complex situations you may face.

What to do after you buy a house

1. Resize your emergency fund. Home ownership comes with new risks. If your roof fails and you lose your job in the same month, you need to be prepared.
2. Budget for maintenance. Plan on 1% to 3% of the home's value each year.
3. Update your estate plan to include the house. This helps for estate purposes and for privacy around your address.
4. Keep detailed records of every improvement. It helps at tax time and when you sell.

Buying a home is about balance. It is emotional and exciting, and it is also probably the biggest financial decision of your life. The goal is a house that supports all of your life goals.

Common questions

How much of my income should go to housing?

As a general rule of thumb, housing costs should stay under 28% of gross income and total debt under 36%.

How much should I put down on a house?

You can buy with less than 10% down, but if possible I would aim for 20% or more to avoid private mortgage insurance and get better terms.

How much should I budget for home maintenance?

Budget 1% to 3% of your home's value each year.

VDB Wealth is a registered investment adviser. Information presented is for educational purposes only and is not intended to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance is not indicative of future performance.

Buying a home is often the biggest financial decision you'll ever make. Here's the problem. Most people approach it with emotions first. The excitement, the FOMO, the pressure to get in the market, and only later do they think about the financial side effects and the long term impact of their purchase. I think that's backwards. That's why I created my home buying checklist to use with my clients. Today, I'm going to walk you through the checklist so you can buy a house with confidence.

I'm Andy VandenBerg, founder of VDB Wealth. I help families and entrepreneurs make smarter financial decisions.

Let's start with section one, defining what you can afford. The first question shouldn't be which house. It should be how much house. Too often people stretch too far and become house poor. All of their cash goes to the mortgage and there's nothing left for travel, investing, or even sleeping well at night. Here's how to avoid that.

Step one, review your monthly cash flow. What's coming in? What are your fixed costs? What are you saving each month? Step two, understand the all in housing costs. That means not just the mortgage payment, but property taxes, homeowner insurance, HOA fees, and maintenance. Step three, think about time horizon. Are you likely to stay in this house for two years or 25 years? The shorter you stay, the more conservative you want to be.

Yes, lenders might approve you for a big number, but just because you can doesn't mean you should. As a general rule of thumb, housing cost should stay under 28% of your gross income, and your total debt should stay under 36%.

All right, section two, preparing your finances. If you want the best mortgage rates, aim for a credit score of 720 or higher. Pay down all your consumer debt if you can. That will greatly improve your odds. And yes, you can buy a home with less than 10% down. But if possible, aim for 20% or more. That way, you avoid private mortgage insurance and you'll get better terms.

Importantly, don't forget about closing costs. They're usually 1 to 5% of the total purchase price. And here's the one people miss, the move in budget. Furniture, small repairs, moving costs, cleaning. The most common shock home buyers face isn't the mortgage. It's the $8,000 they spend in the first three months just to get settled.

Section three, mortgage terms and options. This is where most people's eyes glaze over, but honestly, it's really important. You could save or lose tens of thousands of dollars here.

Fixed rate versus adjustable rate mortgage. Fixed rate means your payments stay the same for the life of the loan. Adjustable means it's cheaper upfront, but the rate can rise later on. That's risky if interest rates move against you.

15 year versus 30 year. A 15 year loan means higher monthly payments. You pay off the house faster and save on interest. A 30 year loan gives you lower monthly payments and more flexibility, but you'll pay more in interest overall.

Conforming versus jumbo. In 2025, a conforming loan is anything under 806,000. These conforming loans are easier to underwrite and they come with slightly better rates. Jumbo loans are for bigger amounts and come with stricter requirements.

Points. This is where you pay upfront to lower your interest rate. It can be a smart move if you know you're going to be in the house long term. You should do the math.

Escrow. This is when your lender collects property taxes and insurance as part of your monthly payment. Some people love the convenience while others would rather handle it themselves. Neither is wrong. It's just preference. Most people use escrow.

All right. Section four, insurance. Please don't sleep on insurance. It's important to have and you can determine if you want home insurance based on the rebuilding cost of the house or the purchase price. Replacement cost pays to rebuild at today's prices. If you can, it's a great option. Don't forget to cover for personal belongings. You have valuables that you plan on keeping in the home. And remember, standard policies don't cover floods, earthquakes, or mold. I always recommend working with a local broker who knows your market and can walk you through all of the complex situations you may face.

All right, section five, after the purchase. Now, let's talk about your life after the purchase. First, you need to resize your emergency fund. Home ownership comes with new risks. If your roof fails and you lose your job in the same month, you need to be prepared. Second, budget 1 to 3% of your home's value each year for maintenance. Third, update your estate plan to include your house. This is helpful for estate purposes, but it also ensures privacy around your address where you live. Fourth, keep detailed records of every improvement. It helps at tax time and when you go to sell. And finally, throw one heck of a housewarming. Seriously, celebrate the moment.

So, here's the bottom line. Buying a home is about balance. Yes, it's emotional. Yes, it's exciting, but it's the biggest financial decision you'll probably make in your life. The goal isn't just to buy a house. It's to buy one that supports all of your life goals.

At VDB Wealth, I help clients make these decisions every day. Not just the can I afford it, but how does this fit into the bigger picture of my life and wealth. If you found this helpful, subscribe for more nuanced takes on wealth management and personal finance. I want to hear from you. What's the biggest question you have about buying a home? Drop it in the comments.