Planning to Buy a Home in 2027? 5 Figures to Review Before Preapproval

Buying a house can be exciting, but the process involves more than looking at listings and picking a place that feels right. It is one of the biggest financial commitments many people make, and the true cost of owning a home can be higher than expected.

Mortgage rates, bidding wars, down payments, property taxes and homeowners insurance can all add up fast. That is why mortgage preapproval matters.

Getting organized early can make the process smoother and also improve your financial standing. Before you begin your search, it helps to understand what lenders examine and what you can realistically afford.

Here are five important numbers to review before seeking mortgage preapproval in 2027.

1. Your Preapproval Amount

Preapproval may seem like a formality, but it can help define your budget. No one wants to discover after falling for a home that it is beyond reach. Preapproval helps prevent that situation.

“Knowing your budget in advance saves time, reduces stress and keeps your home search focused on properties within your financial means,” said Dell Jeanty, founder of Dell Residential Group. Beyond helping you set a realistic budget, preapproval offers several other benefits.

• It can make your offer more competitive, even against a higher bid from a buyer without preapproval

• It gives you time to address possible financing problems, such as a low credit score

• It shows sellers that a lender has already done an initial review and that you are serious about buying

“Knowing your financial standing gives you peace of mind and lets you focus on finding the right home without worrying about affordability,” Jeanty said.

2. Your Credit Score

A weak credit score can reduce your borrowing power, so reviewing it early can help prevent surprises during the mortgage process.

“Your credit can affect both the loan options available to you and the rate you’re offered,” said Yawar Charlie, director of estates at Christie’s International Real Estate Southern California.

Charlie also suggested asking lenders which credit score they use when reviewing your application.

“The score in your banking app may not be the one your mortgage lender uses, so ask the lender which score matters for your loan,” he said.

3. Your Debt-to-Income Ratio

Your debt-to-income ratio compares your monthly debt payments with your gross monthly income. Lenders use it to help decide how much you may qualify to borrow. Still, qualifying for a payment amount does not automatically mean it fits your budget comfortably.

“Just because a lender says you qualify for a payment doesn’t mean you’ll enjoy making it every month,” Charlie said. “Your comfort level matters, too.”

4. Your Monthly Housing Budget

Including a mortgage payment in your budget can be difficult, but if it leaves you stretched too thin, it may be time to reassess what you can afford. Before settling on a number, Charlie said to factor in not just the monthly payment, but also principal and interest, property taxes, homeowners insurance, mortgage insurance and, if applicable, homeowners association dues.

The goal is to understand the full cost of ownership.

“The list price is only the opening act; the monthly carrying cost is the show you’re paying to see,” he said.

5. Your Cash for Closing Costs

Your down payment is not the only upfront expense. You also need to account for closing costs, which can include origination charges, service provider fees, government and tax-related fees, and mortgage and insurance costs.

Buyers usually pay 2% to 5%, according to Zillow. That means a $300,000 home could come with closing costs ranging from $6,000 to $15,000, before adding moving costs, possible repairs and other expenses.

“Your down payment is only one piece of the puzzle,” Charlie said. “You don’t want to empty your savings just to get the keys.”

Keeping some savings after closing can help cover unexpected expenses during the first few months of homeownership.

Preparing now can make the path to buying a home in 2027 much less overwhelming. Building savings for a down payment and closing costs, protecting your credit and organizing your finances can make the purchase process smoother and more rewarding.