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. 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.

  2. Figure out how much house you can afford. Your monthly house payment should be no more than 25% of your monthly take-home pay.

  3. 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.

  4. 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.

  5. 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.

  6. 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

  7. 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.

  8. 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.

  9. 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 

  10. 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.