Get your dream house in 8 steps
Buying a house, especially if it's your first house, may be the most important investment in your entire life, so I think it deserves to spend some time to really think about it very seriously. Wether you live in L.A. (USA), Paris (France) or in Mumbai (India) doesn't make a huge difference in the following steps to become the owner of your dream house.

Step 1: Understand your environment and the price range in your sector.

Browse real estate websites often, and take the time to look at the inventory and evaluate the houses for sale in your sector, then build your own listing of properties in which you'd like to live in. This will give you a good idea of the price range that you are targeting. Make sure to note additional monthly mandatory payments for each house like taxes, electricity, gas, water, etc.

Step 2: Are you earning enough? Estimate your buying power.

To buy a house, you need money. A lot of money. For this, you typically go to a bank to borrow their money using mortgage loan at a fairly low interest rate, but unfortunately they won't give you any money if you don't show them that they can trust you and that you are going to be able to make your mortgage payments months after months. So first, you will need a downpayment of usually at least 5% of the price of the house (ex.: 25000$ on a 500000$ house). You can't borrow the downpayment, you must have that money in your bank account before even thinking of calling the bank. Second, You need to evaluate your monthly payments. Use this mortgage payments calculator to evaluate your payments. Make sure to get the proper interest rate from your local bank, usually posted on the bank's website. Then, the bank will evaluate your ability to purchase a property based on your debt-ratio. Use this tool to calculare your debt ratio. Do you have what it takes? If yes, congratulations!! You can go to step 5. If no, then continue with next step.

Step 3: Make a budget and reduce your spendings.

If your debt-ratio is too high, or if you'd like to buy a more expensive property, then the first think to do is to reduce your spendings, especially your monthly expenses as those have a direct impact on the amount the banks will accept to lend you. The very first thing, and perhaps the only thing that you need to do is to get rid of that brand new Cadillac Escalade and buy a 5 years old Toyota Corolla... Car payments are usually the biggest expense you have outside a house and a very 'bad' one. Cars, as opposes to real estate, don't take value over time, they lose their value. If you have 2 cars, ask yourself if you really need both of them, it can make a dramatic difference in your buying power. Next, list all your expenses from the past 3 months (print them if it's easier) from both your credit cards and banks accounts, and list all monthly payments. Take them one by one and find cheaper alternative or completely get rid of it if you can. This takes time but it's important to do it. Then, create a budget and try to respect it as much as possible.

Step 4: Increase your income and take advantage of all the incentives.

If you have reduced your spending as much as you can but still can't afford the house you'd like to buy, then you may want to increase your income. Asking for a raise is not always easy but probably the most straight forwars options. Having a second job or a side hustle can also be a good alternative. You may also live in an area with incentives for first home buyers, so make some research on the internet. A good example is State of Vermont, USA, that now gives up to 10000$ for people moving there since 2018.

Step 5: Find your credit score and improve it if required.

A credit score is assigned to you by credit institutions based on your credit history, and for the banks it is a prediction of how likely you are to pay a loan back on time. Your credit score will have a direct impact on (1) your chance to get a mortgage loan and (2) the interest rate you will be eligible to. In other words, the higher your score is, the lower your payments will be, so make sure to understand where you're at, and where you need to be. Typically, a score above 750-760 in US and Canada will provide you the best rates. Here are the few things you can do to increase your score:
  1. Pay your 100% of your credit card each month
  2. Make sure you don't have an unpaid account
  3. Try to keep your credit card balance at no more than 70% of your credit card limit

Step 6: Compare rates and incentives from different banks.

You don't have to stay at your local bank for a mortgage loan, I strongly recommend comparing and negociating interest rates from multiple banks, that's the only way to get the best interest rate. Banks can also give you a cash back or many other incentives so it's really important to review all different options.

Step 7: Get a pre-approved mortgage.

Before trying to buy a house, you need to get pre-approved. If everything goes well, the bank will provide you an official letter that states the amount that the bank is ready to lend you. This will ensure the seller that you can actually buy that house and will give you credibility.

Step 8: Buy your dream house!

For a first house, I strongly recommend contacting a real estate agent which will guide you through the buying process. Each country, region, state or province has different laws and regulations, and it can be difficult to do all the right things at the right time. To secure your investment, I also strongly recommend a pre-purchase home inspection by a professionnal.