From "thinking about it" to getting the keys — plain English, no jargon.
~2–5% of purchase price. Includes lender fees, title fees, prepaid taxes/insurance.
Property taxes & Homeowners insurance (usually 1 year upfront).
Mortgage, Taxes, Insurance, HOA, Utilities, Maintenance.
You give a lender paystubs, tax returns, and bank statements. They give you a letter saying how much they'll lend you.
Don’t open new credit cards, finance a car, or make big purchases during this process. It can kill your approval.
Your offer will be formalized in a purchase agreement. Key parts:
Escrow is a neutral account where your "good faith" money sits. It does NOT go to the seller immediately.
Goes Smoothly? Applied to your down payment.
Cancel Validly? You get it back (e.g., during inspection).
You Default? Seller keeps it.
Once "under contract," hire a licensed inspector.
Ensures seller actually owns the home and there are no hidden liens.
Shows boundaries and fences. Crucial to avoid disputes.
Required by lender. May need additional flood, earthquake, or wind coverage depending on location.
WIRE FRAUD WARNING
Never wire money based solely on an email. Call your title company on a verified number to confirm instructions.
Your credit score significantly impacts your mortgage rate. Even a 0.5% difference can save tens of thousands over the loan term.
Rate Shopping Tip
Get quotes from at least 3 lenders within a 14-day window. Multiple mortgage inquiries in this period count as one credit pull.
Don't leave money on the table! Many programs exist to help first-time buyers:
Most states offer down payment assistance (DPA) grants or low-interest loans. Check your state housing authority website.
3.5% down, more flexible credit requirements. Good for first-timers with limited savings.
0% down, no PMI, competitive rates. Available to veterans and active military.
0% down for eligible rural and suburban areas. Income limits apply.
✓ Do This
✗ Avoid This
Don't ask for every minor repair. Focus on:
Pro Tip
Instead of asking for repairs, negotiate a credit at closing. This gives you control over who does the work and how it's done.
Making Large Purchases Before Closing
Don't buy furniture, cars, or open new credit cards. Lenders re-check your credit before closing.
Changing Jobs During the Process
Wait until after closing. Job changes can delay or kill your loan approval.
Skipping the Inspection
Even in hot markets, always get an inspection. A $400 inspection can save you from $40,000 in repairs.
Not Budgeting for Maintenance
Plan for 1-2% of home value annually for maintenance. Plus emergency fund for major repairs.
Maxing Out Your Budget
Just because you're approved for $500k doesn't mean you should spend it. Leave room for life.
Ignoring Resale Value
Even if it's your "forever home," life changes. Consider schools, location, and layout that appeal broadly.
Rate never changes. Predictable payments. Most popular: 15-year and 30-year terms.
✓ Best for: Long-term stability
Lower initial rate, then adjusts periodically (e.g., 5/1 ARM = fixed 5 years, then annual adjustments).
⚠ Best for: Short-term ownership or refinancing plans
Interest Rate: The cost to borrow the principal.
APR (Annual Percentage Rate): Includes interest + fees (origination, points, etc.). Use APR to compare total loan costs between lenders.
"Points" = prepaid interest. 1 point = 1% of loan amount, typically lowers rate by ~0.25%.
Worth it if: You plan to stay 5+ years and can afford upfront cost.
Skip if: You might move or refinance soon.
Deduct interest paid on loans up to $750k (married) or $375k (single). Most valuable in early years when interest is highest.
Deduct up to $10,000 in state and local taxes (SALT cap). Includes property taxes.
Exclude up to $250k (single) or $500k (married) in profit when you sell, if you lived there 2 of last 5 years.
Reduces your home's taxable value. File with your county by the deadline (often March 1st). Can save hundreds to thousands annually.
Monthly
Seasonally
Annually
Before you start house hunting, make sure you have:
Emergency Fund
3-6 months expenses saved
Down Payment Saved
Plus closing costs (2-5%)
Stable Income
2+ years employment history
Good Credit Score
620+ minimum, 740+ for best rates
Low Debt-to-Income
Under 43% including new mortgage
Long-Term Plans
Planning to stay 5+ years
Remember:
Buying a home is one of the biggest financial decisions you'll make. Take your time, do your research, and don't let anyone pressure you into a decision you're not comfortable with. The right home at the right price will come along.