Your Complete Resource
Everything you need to know - from pre-approval to closing day - in one clear, simple guide.
Buying a home has many moving parts. Here's the full journey broken down so you always know what's coming next.
Review your credit score, calculate your debt-to-income ratio, and understand what you can realistically afford. A score of 620+ is typically needed for conventional loans; 580+ for FHA loans.
A pre-approval letter from a lender shows sellers you're serious and confirms exactly how much you're approved to borrow. It typically takes 1-3 business days.
A buyer's agent works for you - at no cost to you in most cases. They'll guide you through showings, negotiations, paperwork, and deadlines.
Clarify your must-haves vs. nice-to-haves. Tour multiple homes before making an offer - it gives you a better feel for the market and your priorities.
Your agent will help you craft a competitive offer based on comparable sales. You may negotiate price, contingencies, or seller-paid closing costs.
A home inspection reveals the property's condition. Your lender will also order an appraisal to confirm the home is worth the purchase price.
Do a final walkthrough to confirm the home is in the agreed condition. At closing, you'll sign documents, pay closing costs, and receive the keys!
Understanding your financing options is one of the most important parts of buying a home. Here's what you need to know.
Not government-backed. Typically requires 5-20% down. Best for buyers with strong credit (680+) and stable income.
Government-backed, ideal for first-time buyers. Requires as little as 3.5% down with a 580+ credit score.
Available to veterans and active military. Often 0% down with no private mortgage insurance (PMI) required.
For rural or suburban buyers who meet income limits. Can offer 0% down payment with low interest rates.
A fixed-rate mortgage keeps the same interest rate for the life of the loan - predictable and stable. An adjustable-rate mortgage (ARM) starts lower but can change after an initial period. Most buyers prefer fixed-rate loans for the peace of mind.
The upfront cash you pay toward the home purchase. Typically 3-20% of the purchase price. A larger down payment means smaller monthly payments and no PMI if you reach 20%.
Required on conventional loans when you put down less than 20%. It protects the lender - not you - and typically costs 0.5-1.5% of the loan per year. It drops off once you reach 20% equity.
Your total monthly debt divided by your gross monthly income. Most lenders want this below 43%. The lower, the better your chances of approval and favorable rates.
A good-faith deposit (usually 1-3% of the purchase price) made when submitting your offer. It's applied toward your down payment at closing, but can be forfeited if you back out without a valid contingency.
A great real estate agent is your most valuable asset in this process. Here's what to expect - and what to look for.
Agent commissions are entirely negotiable, however, it is common practice for the seller to agree to pay both their agent, and the buyer's agent out of the sale proceeds. Buyer and agent should negotiate a fee among themselves, and then plan to negotiate a seller paid commission to cover this as part of an offer.
Closing costs are fees paid at the end of the transaction. Budget for 2-5% of the purchase price on top of your down payment.
| Fee | Typical Amount | Who Pays |
|---|---|---|
| Loan Origination FeeLender's fee for processing the loan | 0.5-1% of loan | Buyer |
| Appraisal FeeIndependent home value estimate | $300-$600 | Buyer |
| Home InspectionAssessment of the home's condition | $300-$500 | Buyer |
| Title InsuranceProtects against title disputes | $500-$1,500 | Varies |
| Escrow / Attorney FeesClosing agent or attorney | $500-$2,000 | Varies |
| Prepaid Property TaxesUpfront tax reserve for escrow | 2-6 months | Buyer |
| Homeowners Insurance (1st year)Required before closing | $800-$2,000/yr | Buyer |
| Recording FeesCounty fee to record the deed | $50-$250 | Buyer |
In a buyer-favorable market, you can ask the seller to cover some or all of your closing costs as part of the offer. This can save thousands of dollars at the closing table - your agent can advise when this strategy makes sense.