To prepare before buying a house, first assess your financial health by checking your credit score, saving for a down payment (typically 20% of the purchase price), and budgeting for closing costs (2-5% of the loan amount). Secure a mortgage pre-approval to understand your budget and strengthen offers. Research the housing market in your target area, compare mortgage rates, and evaluate long-term costs like property taxes and insurance. Create a contingency fund (3-6 months of expenses) to cover unexpected repairs.

Financial readiness is critical because poor credit scores (below 620) can increase mortgage rates by over 1%, raising monthly payments. For example, a Fannie Mae study found that borrowers with scores below 600 paid an average of 4.5% more in interest over 30 years compared to those with scores above 740. Saving for a down payment reduces loan principal and monthly payments. The Federal Reserve reports that 44% of first-time buyers struggle to save enough, highlighting the importance of early planning. Mortgage pre-approval, obtained through a lender, proves financial stability to sellers, increasing offer acceptance chances by 30% (Zillow, 2023). Hidden costs like property taxes (average 1-2% of home value annually) and maintenance (0.5-1% of home value yearly) often exceed buyers’ expectations, according to Bankrate’s 2023 survey. A contingency fund mitigates risks from unforeseen expenses, such as a 2022 study showing 68% of homeowners faced unexpected repair costs averaging $5,000 within the first year.

By prioritizing financial readiness and mortgage pre-approval, buyers position themselves to secure favorable terms and avoid post-purchase financial stress. Data from the National Association of Realtors (2022) indicates that pre-approved buyers close on homes 40% faster than those without pre-approval, underscoring the strategic advantage of preparation.