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:
- Figure out how much house you can afford. Your house payment should be no more than 25% of your take-home pay.
- Save for a 10–20% down payment. Plus, don’t forget to consider closing costs and moving expenses on top of your down payment amount.
- Identify your favorite neighborhoods. Instead of running around the whole city, narrow down your home search to just a few areas.
- 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.
- 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.
- 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.
- Go house hunting. Most buyers search for 10 weeks and view around nine homes before they find the home they buy.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.
- 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.
- 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.
- 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
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.
- 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.