How to Buy a House: 15 Steps in the Homebuying Process

We’ve broken down the homebuying process into 15 main steps: Call it a buying-a-house checklist. Each step includes choices to make and things to do. Some are stressful, some are pretty cool and some are, well, kinda annoying. But each gets you one step closer to your goal of homeownership.

1. Make sure you're ready

Sure, there's being financially ready to buy a house (see Step 2 for that). But are you emotionally ready? Even if it's just your starter home, you're making a big financial commitment and putting down some roots.

You'll want to think about your other goals for the next few years. Here are some big-picture questions to ask yourself when deciding if it’s the right time to buy a house:

• Are you buying with a partner? If yes, are you on the same page when it comes to money? 

• Is there any chance you'd need to relocate for work? 

• Are you thinking of starting a family? Do you already have children or pets that need extra space?

» MORE: Check out NerdWallet’s 2026 home buyer report

2. Get your finances in order

Buying a house may be the biggest financial decision you'll ever make, so before you take the plunge, you want to be sure your finances are solid.

You can use our home affordability calculator to decide on a realistic budget. This will give you a look at how your monthly mortgage payments can add up as a homeowner.

What you can afford and what a lender will approve aren't always the same thing. Once you've settled on a budget, plug your numbers into the calculator below to estimate how much you may qualify to borrow based on your credit, income and debts.

3. Make a plan for the down payment

After you’ve set a budget for yourself, you can figure out how much you can afford for a down payment. 

Minimum down payment

The common recommendation that gets thrown around is to put at least 20% down. But you don’t have to do this. In fact, a lot of homeowners don’t — especially first-time buyers. The median down payment for a first-time homebuyer is only 10%, according to the National Association of Realtors.

The downside of putting less than 20% down on a conventional loan is that you’ll likely be charged for private mortgage insurance (PMI) alongside your regular monthly payments. But it might be worth paying a tad more each month so you don’t have to spend as much upfront on a down payment. You can get rid of PMI after paying down your mortgage to 80% of your home’s value.

Look into assistance programs

If this is your first home (or if you haven't owned a house in a while), it’s worth looking into first-time home buyer programs in your state. Many offer financial help along with down payment assistance. If you have a friend or family member who can afford it, you can also use gift money to boost your down payment even more.

Rules about gift money can vary depending on the kind of loan you get, so double-check any guidelines first.

» MORE: Use our down payment calculator to see how far your down payment cash can go

4. Create a wish list

See, told you there'd be some fun steps! And coming up with a list of must-haves and nice-to-haves for your house is definitely one of them.

Whether you’re looking for a starter home or somewhere you can imagine living for years to come, there are lots of little details. Here are some of the bigger decisions you might make when drawing up your list:

Detached house or attached unit?

A few types of homes to consider include:

• Single-family homes: If you're all about having a backyard and no shared walls, then a traditional single-family home is for you.

• Condos or townhouses: If you live in a more heavily populated area or don’t want to deal with the maintenance of a yard, one of these attached units could be a good fit.

• Co-ops: These are also an option in some cities. They can be less expensive than a condo but a bit harder to finance since you don’t technically own the unit.

» MORE: Pros and cons of buying a condo vs. a house

Ideal location?

Assuming you know the general area where you want to live, now it's time to choose a neighborhood. Here are some factors to consider:

• Safety

• Amenities (like walkability, green spaces or coffee shops) 

• Costs (like property taxes and homeowners association, or HOA, fees) 

• School district (this can affect your home’s value whether or not you have kids)

Move-in ready or fixer-upper?

• With a move-in ready home, all you have to do is move in — easy peasy.

• With a fixer-upper, you’ll need to put in the work (and the cash) to make it livable, so make sure you're up to the challenge. Taking on a property that needs a little TLC can be the gateway to get into a larger house or costlier neighborhood — especially if you’re in a pricey or otherwise competitive market.

» MORE: Buy, build or fix? What to consider

5. Find the right mortgage for you

The kind of mortgage you use to buy a house will impact what you need to qualify along with how you’ll pay it back. If you’re like most borrowers, you’ll choose between a conventional loan or some type of government loan. 

Here are the main loan types in more detail, plus a few specialty options:

• Conventional loans are mortgages not guaranteed by the federal government. They offer low minimum down payments but have more stringent qualifications. Conventional loans can either be conforming — meaning they follow guidelines set by Fannie Mae and Freddie Mac — or nonconforming.

• Jumbo loans are a type of nonconforming conventional loan. These mortgages are used for houses that are more expensive than standard lending limits. Jumbo loans usually require larger down payments and higher credit scores.

• FHA loans are mortgages backed by the Federal Housing Administration. These are generally easier to qualify for than conventional loans but have stricter requirements for mortgage insurance.

• USDA loans insured by the Department of Agriculture are for low- to moderate-income borrowers living in eligible rural areas. These loans allow you to make no down payment.

• VA loans from the Department of Veterans Affairs are for active or former service members and eligible spouses. Like USDA loans, VA loans don’t require a down payment.

• Renovation loans let you wrap the costs of home improvements into the total amount of the home loan. Several kinds of renovation mortgages are available, including conventional, FHA and VA loans. Depending on the rate you get, you might save money on interest in the long run compared to what you’d pay with other home improvement loans, such as personal loans.

On top of deciding on the type of mortgage you want, you’ll also need to consider what type of interest rate and repayment term you want.

Interest rate type

Depending on the loan, you might be able to pick between:

• A fixed-rate mortgage: With this option, your rate is static. A fixed mortgage rate can start off higher than an adjustable rate to start, but you won’t have to worry about your rate fluctuating.  

• An adjustable-rate mortgage (ARM): Unlike fixed rates, adjustable rates can move up or down based on market conditions. While an ARM can start off with a lower rate compared to a  fixed-rate loan, that rate can increase — or decrease — over time.

Repayment term

Thirty-year mortgages are the most common, but 10-, 15- or 20-year terms might be available at lower interest rates.

6. Get preapproved for a mortgage

You know your homebuying budget, and you've decided what type of mortgage will work for you. Now it’s time to get preapproved.

Shop around for a mortgage lender

To get preapproved, you’ll need to find a mortgage lender. There are a lot of mortgage lenders out there — including banks, credit unions and online-only nonbank lenders. When you look at lenders, you’ll want to consider:

• If the lender offers the type of loan you want

• How a lender’s sample rates compare with today's mortgage rates

• What fees the lender charges, including mortgage origination fees 

• What closing costs you’ll be responsible for

Get preapproved

After you’ve picked a few lenders you like, you can focus on getting preapproved. A mortgage preapproval basically says how much a lender is tentatively willing to lend you. It’s not a guaranteed approval offer, but it can help you determine your budget more accurately.

A lender will use detailed info about your finances — like W2s, bank statements and debt statements — to preapprove you. A hard credit inquiry will also be part of the process. This will show up on your credit report and could cause a slight, temporary drop in your score (usually just by a few points).

» MORE: What you'll need for a mortgage preapproval

Get your docs

The documents you’ll receive from a preapproval are worth the effort. These include:

• A preapproval letter: This states how much the lender is willing to lend you. It also shows sellers and real estate agents that you're a serious buyer who can get financing, which can give you a crucial edge over competing home shoppers. A preapproval letter is typically valid for up to 90 days, after which it’ll need to be updated.

• A Loan Estimate: This standardized form isn't a finalized offer, but it lets you easily compare lenders' rates, fees and other costs.

» MORE: Tips for finding the best mortgage lenders

7. Find a real estate agent

You've got your preapproval in hand and know what kind of house you're looking for, so let's find someone to help you look. The right real estate agent can make a huge difference throughout the process of buying a house — from knowing the ins and outs of the local market to providing moral support when the search feels endless to helping you negotiate with a seller.

Here are some ideas for where to find a real estate agent:

• Get a referral from people you know who’ve recently bought a home.

• Get a referral from another agent, lender, broker or home builder.

• Search online listings and social media.

• Pay attention to local “for sale” signs and print ads in your community.

• Attend open houses.

It's a good idea to interview at least three agents. Ask each candidate about not only their real estate experience but also how they’ll support you through the home buying process.

It’s also usually best to avoid using the real estate agent who's selling the home you're hoping to buy. You want your own agent who will advocate and negotiate on your behalf.

» MORE: How to track down the right real estate agent

8. Go shopping!

Yes, this step merits an exclamation point. It's time to take scrolling through online real estate listings to the next level and actually see some homes in person.

Here are some tips to keep in mind as you see the sights:

• Make the most of your showing. You might only see a home once in person before you make an offer, especially in a hot market. 

• Try not to be thrown off by other home shoppers or by the seller's agent. They may or may not be in attendance — if they are, don’t let them psyche you out.

• Take photos to jog your memory when you're deciding whether to make an offer. You might easily remember that charming breakfast nook or the extra bedroom that would make a perfect home office. But the aging appliances or decking that needs replacement could be out of sight, out of mind. Issues like these can also affect the amount you offer (and be worth mentioning to a home inspector).

» MORE: What to look for when buying a house

9. Make an offer

Found a home that's right for you? Now you’re ready to make an offer. 

Let your real estate agent guide you

Your real estate agent can be a massive resource here. They can give you comparable sales information to shape your offer. Plus, they might have intel from the seller’s agent — like if they've already found a new place and are extra motivated to sell.

Consider a real estate attorney

You might also want help from a real estate attorney if the transaction is complicated — for example, in a for sale by owner (FSBO) deal or other tricky situations. In some states, a lawyer is required to be part of any real estate transaction.

Get an answer from the seller

Now you wait on pins and needles for a response from the seller.

• If the seller accepts your offer, congrats! Now you've got just a few more steps to go. You'll also likely write your first check at this point. Earnest money is a deposit you'll make toward the purchase of the house — this will usually go into an escrow account.

• If the seller rejects your offer, you can make a counteroffer or walk away. The right move really depends on why they turned you down. If the seller counters, talk it out with your agent to make a decision — either to accept or make your own counteroffer. (It's during these negotiations that a buyer's agent really earns their keep!)

» MORE: How much to offer on a house

10. Get a mortgage

You know the property you want to buy and how much you'll have to pay for it. Now you'll choose a lender to get a mortgage from. You can go with a lender that preapproved you or start fresh with a different one. Even with an online-first lender, you'll usually work closely with a loan officer to complete the actual application.

This is a paperwork-heavy process, so get ready to do a lot of uploading. Here's what you're likely to need:

• W-2 forms from the past two years (possibly more, if you've changed employers).

• Pay stubs from the past 30 to 60 days.

• Proof of other sources of income, including documentation of any gift money.

• Federal income tax returns from the past two years.

• Recent bank statements, usually for the past couple of months.

• Details on long-term debts like car or student loans.

• ID and Social Security number.

Once your mortgage application is complete, you'll go into underwriting. During this process, the lender makes a final decision on whether to give you the loan. Essentially, the lender makes sure there isn't anything about the deal that's too risky. The lender will also look at the home you've chosen via an appraisal (see Step 13 below) and request a title search.

» MORE: What not to do while you're waiting for mortgage approval

11. Get homeowners insurance

It might feel a little strange to take out an insurance policy on a home you don't actually own yet. But if you’re going to get a mortgage, your lender will likely require you to get homeowners insurance as part of the deal.

Typically, you should:

• Have the policy take effect on your closing date.

• Get enough coverage to fully replace the home (this might not be the same as your purchase price or the appraised value).

» MORE: See our picks for the best homeowners insurance companies

12. Schedule a home inspection

A basic home inspection can raise issues you might face down the road and point out any necessary repairs. This visual assessment covers all aspects of the house and its systems — from the foundation to the roof. If the home has features like a pool, septic system or retaining walls, you might want to have these inspected, too.

There are also more specialized types of home inspections to help with particular concerns, like mold or radon. The standard inspection will usually reveal if you need one of these. 

You should choose the home inspector and pay for the inspection. If it uncovers problems that weren't included in the seller's disclosures, you might be able to negotiate with the seller (see Step 14).

13. Have the home appraised

A home appraisal looks closely at the home you're buying and at comparable recently sold homes to determine the market value of the property. This is different from an inspection: The inspection is for your peace of mind, while the appraisal is really for the lender, which doesn’t want to lend you more money than the home is worth.

Your lender will choose the appraiser, but you'll pay for the appraisal.

14. Negotiate any repairs or credits with the seller

Some items — like prorating property taxes or HOA fees — will have been addressed in your offer letter. But you might have other things to negotiate before closing.

Your negotiating power can hinge on what kind of market you're facing:

• In a buyer's market, almost any aspect of the transaction can be negotiated. This includes having the seller pay some of your closing costs or loan points.

• In a strong seller's market, it can be difficult to get concessions, since the seller can simply move on to their next offer. But if it's an issue that will come up with any buyer — for example, a necessary repair that’ll get flagged by any home inspector — you might have some leverage. 

15. Close on your new home

You've finally made it to the last step! Getting familiar with the standard closing documents ahead of time can make the closing process less nerve-wracking.

Here are a couple of things to expect as you approach your closing date:

• Closing Disclosure: Your lender must provide you with the Closing Disclosure at least three days before the actual closing. You can compare it with your Loan Estimate to see whether and how any closing costs have changed. This will let you know how much total cash you’ll need to close.

• Final walk-through: On or near closing day, you'll do a final walk-through with your real estate agent. You'll probably be buzzing with excitement, but make sure to check that everything’s as agreed upon. (For example, that all the appliances that are supposed to be included in the sale are still there.)

It's been a whirlwind of emotion and seemingly endless paperwork. And you might have just written the biggest check of your life. But now you're getting the keys to your new home. Congratulations, you did it!

» MORE FOR CANADIAN READERS: Steps to take before buying a house