Home Buying Process

A common starting guideline: keep total housing costs — principal, interest, taxes, insurance ("PITI") — at or under ~28% of gross monthly income, and all debt payments (housing included) under roughly 36–43%, depending on the loan program. Budget for closing costs too — typically 2–5% of the purchase price, on top of your down payment — and keep some cash in reserve; lenders like to see it.

Pre-qualification is a fast, self-reported estimate. Pre-approval is the real thing: the lender verifies your income, assets, and credit, and gives you a letter stating what you're approved to borrow. Sellers take pre-approval seriously; they mostly ignore pre-qualification. It's typically valid 60–90 days — and this is also where your credit and loan type get decided.

A buyer's agent represents your interests during the search and negotiation. Since 2024, buyer-agent compensation is typically spelled out in a written agreement before you tour homes together, rather than assumed to come automatically from the seller's side — ask upfront how your agent is paid.

With a budget (and an agent, if buying) in place, tour homes that fit your criteria. How long this takes varies a lot by market and how specific your must-haves are.

Your offer sets the price, any contingencies (financing, inspection, appraisal — each one is an "out" if something goes wrong), and an earnest money deposit (typically 1–3% of price, held in escrow, applied toward closing costs or your down payment if the deal closes).

This is when the real clock starts. Your contract sets deadlines for inspection, financing, and closing.

A professional inspector checks the property's condition. Depending on what turns up and your contingency terms, you can negotiate repairs or credits — or walk away.

You submit full documentation to your lender — pay stubs, tax returns, bank statements, ID. This typically overlaps with the inspection period rather than waiting for it to finish.

The lender orders an independent appraisal confirming the home is worth at least the purchase price — it's their collateral. A low appraisal usually means renegotiating price, covering the gap in cash, or — with an appraisal contingency — walking away.

Usually the longest single step. An underwriter reviews everything — income, assets, credit, the appraisal, title — and either approves the loan, asks for more documentation ("conditions"), or denies it.

Often happens during processing or underwriting: the lender guarantees your rate for a set window (commonly 30–60 days) so it can't move against you while everything else finishes. This is also where rate, APR, and points get decided together.

Underwriting conditions are satisfied. By law you get a Closing Disclosure at least 3 business days before closing, showing your exact final costs — compare it line by line against your original Loan Estimate.

Confirm the home's condition matches what you agreed to, and that any negotiated repairs actually got done.

You sign the loan documents, wire or bring a cashier's check for your down payment and closing costs, and get the keys.

Your first payment is typically due 30–60 days out. Set up autopay, understand your escrow account (it collects for property taxes and insurance), and if you put down less than 20%, track when you'll hit 20% equity so you can request PMI removal.