10 Steps to Homebuying

Homebuying can be an overwhelming process, especially for a first-time buyer. Read our step-by-step homebuying guide to learn about everything from low mortgage rates to closing costs.

Our 10 Step Guide

1. Check credit. Before you apply for any major line of credit or loan, you should always check your credit report. This does two things. First, it enables you to look over your credit report for errors, which could spuriously drag down your credit score. If you find any errors on your credit report, immediately dispute them in writing to have them removed. Secondly, checking your credit allows you to see where you stand in the creditworthiness department. This will better prepare you to get low mortgage rates.
2. Determine what you can afford. Even with low mortgage rates, you'll need to know beforehand what kind of a budget you'll need to accommodate with your mortgage. Add up all of your monthly expenses outside of housing, then add up your monthly income. A good rule of thumb is to keep housing expenses at 28% of income or less.
3. Always get pre-approved before you go house hunting. Before you even begin browsing for homes, apply to get pre-approved on a loan with low mortgage rates. Pre-approval then leaves you free to focus solely on finding the right house, and it shows sellers that you are a serious buyer.
4. Find a real estate broker. A good real estate broker can mean the difference between a smooth homebuying experience and a nightmare. Ask friends or relatives whom they would recommend. Thoroughly interview all candidates to make sure you make a good match.
5. House hunting. Once you have your pre-approved low mortgage rates, your real estate broker, and your credit under control, you can finally begin shopping for your new home. Remember the importance of location and also consider size and features. Differentiate between what you need in a home and what you want in a home.
6. Submit an offer. If you've found the right house, confer with your real estate agent on an appropriate offer. You don't have to offer the asking price-that is more of a guideline. Always make your offer in writing and make it contingent upon a home inspection.
7. Select the appropriate mortgage. Though you've been pre-approved for low mortgage rates, you still have to decide on the right type of mortgage for you. You will have to decide between a fixed-rate or adjustable-rate mortgage.
8. Make sure your lender locks in your interest rate. The closing process on a mortgage loan can take weeks, and you don't want your interest rate to increase during that time. To avoid this, make sure your lender is willing to lock in the interest rate you were initially offered while the transaction is completed.
9. Have a home inspection & appraisal done. Have a thorough home inspection performed and have the sellers pay for any repairs or have the cost of the repairs deducted from your offer.
10. Close the deal. Closing can be a stressful process with a lot of paperwork and additional costs. Make sure you've set aside money to cover closing costs and also keep your closing paperwork in good order for reference.

Still have questions? Get your low mortgage rate answers on our FAQ page.