6 Steps to Buying a Home

Buying a home is a major milestone—and knowing the roadmap keeps you
confident every step of the way. From saving your down payment to signing at
the closing table, here’s how to navigate the process in six clear stages.

One: Budgeting Beyond Your Down Payment

• Down Payment: Aim for 20 % of the purchase price to avoid Private Mortgage Insurance (PMI). On a $350,000 home, that’s $70,000—though some loan programs allow as little as 3 %–5 %.
• Earnest Money: Typically 1 %–3 % of the offer price, held in escrow and applied toward your purchase at closing.
• Closing Costs: Expect to pay 2 %–5 % of your loan amount out of pocket. This covers lender fees, title services, appraisal, inspections, and more. Ask your lender for a Loan Estimate early so you can plan.
• Emergency Fund: Reserve 3–6 months of living expenses to handle unexpected repairs or cash-flow gaps after you move in.

Two: Strengthen Your Credit & Debt Profile

• Credit Score: Target a score of 700+ for the best rates; minimum 620 across most conventional products. Pull your credit report, dispute errors, and pay down high‐interest balances.
• Debt-to-Income (DTI) Ratio: Keep your DTI at 36 % or below. Calculate by dividing monthly debt payments by gross income. If you’re over, focus on reducing balances or increasing income before applying.

Three: Shop & Secure Your Financing

• Compare Lenders: Request Loan Estimates from at least three lenders—banks, credit unions, and online mortgage providers. Look at interest rates, origination fees, and points.
• Lock Your Rate: Once you find a competitive package, lock in your rate (usually good for 30–60 days) to protect against market swings.
• Get Pre-Approved (Not Just Pre-Qualified): A pre-approval letter demonstrates your purchasing power and speeds up closing once you find “the one.”

Four: Choose the Right Real Estate Agent

• Local Expertise: Select an agent who specializes in your target neighborhood and property type.
• Service & Compensation: Since the 2024 NAR settlement, buyer-agent fees are negotiable and disclosed up front. Ask your agent to outline exactly what their commission covers—and whether you’ll pay your buyer’s agent directly or via a seller credit.
• Communication Style: Interview multiple agents to ensure they’re responsive, transparent, and aligned with your priorities.

Five: House-Hunting & Making an Offer

• Define Your Must-Haves: Clarify budget, location, school districts, and non-negotiable features before touring homes.
• Avoid Emotional Overreach: In competitive markets, offers can exceed list price. Rely on your agent’s market analysis to craft a strong—but fiscally responsible—bid.
• Inspection & Appraisal Contingencies: Include provisions allowing you to renegotiate or walk away if the home appraises low or the inspection uncovers major issues.

Six: Navigate the Closing Process

• Final Walk-Through: Complete a 1–2 day before closing to confirm agreed repairs and that utilities still function.
• Review Your Closing Disclosure: Three days before signing, you’ll receive this document. Verify all fees, prorations, and loan terms, and ask questions about any unexpected charges.
• Signing & Funding: At the closing table you’ll sign documents, wire your down payment and closing-cost funds, and receive the keys once funds and paperwork record.

Congratulations!

By following these six steps—budgeting wisely,
strengthening your financial profile, securing financing, partnering with the
right agent, making strategic offers, and controlling the closing—you’ll turn
the dream of homeownership into reality with confidence and clarity.

Have Questions? Ask April!

Give April D. Robinson a call at 727-BUY-SELL (727-289-7355) to learn more about local areas, discuss selling a house, or tour available homes for sale.