
Buying Process: Start to Finish
Since there’s so much that goes into making a home purchase, we wanted to make it easier for you to understand the home-buying process from the get-go. So, here’s a quick summary to reference as you move through each step:
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Decide you’re ready to buy. Being ready to buy means you’re debt-free and have an emergency fund of 3–6 months of expenses. This is an essential step in helping you handle the expenses of homeownership.
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Figure out how much house you can afford. Your monthly house payment should be no more than 25% of your monthly take-home pay.
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Save for a down payment. Ideally, you’ll want at least 20% of the home price. If you’re a first-time home buyer, it’s okay to only save 5–10%. But prepare to pay private mortgage insurance (PMI). Also, don’t forget to consider closing costs and moving expenses on top of your down payment amount.
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Get preapproved for a mortgage. To get a home loan you can pay off fast, talk to a RamseyTrusted mortgage provider about getting a 15-year fixed-rate conventional loan—which has the lowest overall cost. And whatever you do, stay away from expensive mortgages like FHA and VA loans.
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Find an expert real estate agent. You want an agent who actually cares about your financial goals and offers guidance at every step of the home-buying process—like the RamseyTrusted agents in our Endorsed Local Providers (ELP) program.
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Go house hunting. Create a list of your must-haves and discuss them with your agent. Most buyers search for a couple of months and view several homes before they find the home they buy.1
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Make an offer on a house. Once you find an affordable home you love, trust your real estate agent to help you make a competitive offer and negotiate with the seller for the best price. After your offer is accepted, you’ll pay a type of security deposit called earnest money.
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Get a home inspection and appraisal. Your home inspection will protect you from buying a house that isn’t structurally sound and your appraisal will protect you from paying too much for a house.
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Be patient as your lender finalizes your loan documents. There’s a ton of paperwork that goes into getting a mortgage. On average, it takes a month or two to close on a loan.2
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Close on your house—finally! Review all of your closing costs, sign a mountain of paperwork, and make the final payments. Closing day is when you officially become a new homeowner.
Okay, now you’re ready to take a deep dive into each of these steps.