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:

  1. Figure out how much house you can afford. Your house payment should be no more than 25% of your take-home pay.
  1. Save for a down payment. Aim for 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 PMI, and be sure to avoid FHA and VA loans. Also, don’t forget to consider closing costs and moving expenses on top of your down payment amount.
  1. Identify your favorite neighborhoods. Instead of running around the whole city, narrow down your home search to just a few areas.
  1. Get preapproved for a 15-year, fixed-rate conventional loan. If you live a debt-free life and don’t have a credit score, ask our friends at Churchill Mortgage about doing manual underwriting.
  1. Find an expert real estate agent. You want an agent you can trust—one who actually cares about your financial goals and offers guidance at every step of the home-buying process.  
  1. Meet with an agent and discuss your list of must-haves. Getting on the same page with your agent will help in finding the kinds of houses you actually want and can afford.
  1. Go house hunting. Most buyers search for 10 weeks and view around nine homes before they find the home they buy.1
  1. 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.
  1. Pay the security deposit and start the mortgage process. After your offer is accepted, you’ll pay a type of security deposit called earnest money. Then, you can let your lender know the exact dollar amount to process for your mortgage.
  1. 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.
  1. 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 44 days to close on a loan.2  
  1. Start looking for homeowners insurance. Your lender will require you to have coverage before financing your home. Set up a policy with one of our trusted insurance agents.

  2. Close on your house—finally! Review all of your closing costs, sign a mountain of paperwork and make 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.