Buying a home, step by step
From your first budget to the keys: what to do, in order, with the rules that protect you. Where the UK works differently, the note says so.
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Time: usually 2 to 6 months
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Before you look: the money
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AnnualCreditReport.com is the official site for free weekly reports from the three bureaus.
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Count property taxes, homeowners insurance and any HOA fees, not just principal and interest.
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Closing costs typically run 2% to 5% of the purchase price, on top of the down payment.
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A HUD-approved housing counselor can walk you through them, often at little or no cost.
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A preapproval letter shows sellers you can borrow, but it isn’t a guaranteed loan offer. UK: a mortgage in principle.
House hunting
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Since August 2024 most agents need one before a tour. It states what the agent will be paid, and that pay is negotiable.
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FEMA’s flood maps show whether a home is in a high-risk flood area.
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Minutes can reveal big repairs and special assessments coming up.
Offer and contract
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UK: in England and Wales, an accepted offer isn’t legally binding until contracts are exchanged.
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They let you renegotiate or walk away if the inspection, the appraisal or your loan doesn’t work out.
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For a home built before 1978, the seller must disclose known lead-based paint, and you get 10 days to test for it unless you waive it.
Inspection and appraisal
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Your contingency window is short. UK: you’d commission a survey instead.
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The EPA recommends testing for radon in every home below the third floor.
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If it comes in low, you can renegotiate, cover the gap, or walk away under your appraisal contingency.
The loan
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Each lender must send one within 3 business days of your application.
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New debt can change your loan approval. Mortgage credit checks within 45 days count as one inquiry.
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In a high-risk flood area, a loan from a federally regulated or insured lender also requires flood insurance.
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Most lenders require a lender’s policy, which protects their loan. The owner’s policy is optional and protects you.
Closing
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You must get it at least 3 business days before closing: ask about anything that changed.
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Scammers send fake emails with new bank details: never follow wiring instructions that come by email.
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Check that agreed repairs are done and that everything that should stay is still there.
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UK: in England and Northern Ireland, Stamp Duty is due within 14 days of completion; Scotland and Wales have their own taxes, due in 30.
After closing
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It can lower the property tax on your main home. Deadlines vary.
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You can ask when your balance is scheduled to reach 80% of the home’s original value; it ends automatically at 78%.
Your keys
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Good to know
- Every contract sets its own deadlines for the inspection, the appraisal and your loan: put them on your calendar the day your offer is accepted.
- Check your Closing Disclosure against your Loan Estimate line by line: the CFPB’s explainers show what each line means and what can change.
- In England and Wales, a solicitor or licensed conveyancer handles the legal work and searches; Scotland has its own system.
Frequently asked questions
How much cash do I need besides the down payment?
Closing costs, typically 2% to 5% of the purchase price, plus moving costs and a cushion for repairs. Your Loan Estimate lists the closing costs for your loan.
Is a preapproval the same as a loan?
No. It’s a lender’s conditional estimate of what you can borrow, based on what you’ve told them and a credit check. The final approval comes after the appraisal and underwriting.
Do I need both an inspection and an appraisal?
They do different jobs. The appraisal tells the lender what the home is worth; the inspection tells you what condition it’s in. Only the inspection is for you.
Next step
I’m not an accountant or a financial advisor. This is an estimate, for information only. Check with a professional before you decide.
- The calculatorHow much can I borrow?
- The short guideBuying a home
- The next checklistMoving to a new home
- The routeBuying a home
Sources
- CFPB — Buying a house: tools and resources for homebuyers
- CFPB — What is a Loan Estimate?
- CFPB — What is a Closing Disclosure?
- CFPB — Mortgage closing scams: how to protect yourself
- CFPB — When can I remove PMI from my loan?
- FTC — Free credit reports
- EPA — Real estate disclosures about lead-based paint
- EPA — Home buyer’s and seller’s guide to radon (PDF)
- FEMA — Flood insurance requirements for lenders
- National Association of REALTORS® — Written buyer agreements
- GOV.UK — Buying a home: making an offer
- GOV.UK — Stamp Duty Land Tax
For contracts, loans and taxes, if you’re unsure, check with a real estate attorney, a HUD-approved housing counselor or another professional.