If you’re considering buying a home, this is the place for in-depth information on the homebuying process, mortgage options, and what to expect along the way.
Step 1—Know when you’re ready
A home is likely the largest purchase you’ll ever make, so it’s important that you’re well prepared.
Start by determining if either buying or renting makes the most sense for you right now. There are costs and benefits associated with each, so make sure you have all the facts before deciding.
If you decide you want to buy a home, it’s time for a thorough review of your finances and credit history to see what you can afford. You can use our mortgage affordability calculator to estimate how a mortgage could fit into your financial situation.
Your credit plays a crucial role in the mortgage lending process. Brush up on the basics and be sure you’re making the most of your credit as you take the next steps toward homeownership.
If you consistently pay your rent each month, you’re likely to keep up with mortgage payments too. A solid record of rent payments can now help you qualify for a mortgage, even if you have a limited credit history.
Step 2–Save for homeownership
Saving is essential to pay for required homebuying costs. In addition to a down payment, there are closing costs, other fees, and unexpected expenses to keep in mind.
It’s important to be aware of the costs associated with buying — and owning — a home. From your down payment and mortgage loan closing costs to homeowners’ insurance and ongoing maintenance, don’t let these expenses catch you off guard.
Lenders consider your debt-to-income (DTI) ratio when determining what mortgage loans are available to you. If the amount you owe in debt is high compared to your overall income, you may not qualify for the most preferable loan terms.
Step 3—Work with a mortgage lender
There are many different mortgage lenders. When you find the right one for you, they’ll evaluate your finances and explain your mortgage options.
Different lenders may offer different mortgage products, require different fees, and use different processes. Use our checklist to help select a lender that meets your specific needs.
Get an overview of mortgage loan definitions and processes. Find out how mortgages work and what factors may impact your loan terms.
Mortgage loans aren’t one-size-fits-all. Before deciding which one works for you, get to know the different kinds available.
Depending on the home and your circumstances, special loans or programs may be available to make your mortgage more affordable.
Step 4—Shop with a real estate agent
Working with a trusted real estate agent can make your home search more enjoyable. They’ll show you suitable homes and help you close the sale on a home you’ll love.
A real estate agent can help you find and view homes that match your budget and priorities. Then they’ll work with you to close the sale on a home.
As with lenders, you can consider multiple agents before choosing one. Ask friends for recommendations, read online reviews, and meet with the agents directly. Our checklist can help you know what to ask when you’re searching for an agent to work with.
Step 5—Make an offer on a home
When you decide to purchase a particular home, you’ll submit an offer to the seller. If they accept your offer, you’ll both sign a sales contract.
At this point your lender will request additional documentation. Our documentation checklist can help you make sure you provide them with everything they will need to finish up the loan process.
When the seller accepts your offer, you’ll both sign a sales contract or purchase agreement. At that point, you may want to set up a home inspection which helps you avoid last-minute surprises. Our checklist can help you understand what to expect and questions to ask during the inspection.
Step 6—Get ready to close your loan
You’ll work with your mortgage lender to finish up remaining paperwork, finalize your loan, and transfer ownership. And when it’s done, you own your home.
You’ll set a closing date and location with your lender, real estate agent, and closing agent. They’ll help you finish remaining paperwork, finalize the loan, and make sure that all funds for closing get transferred according to the agreed upon terms.
There will be a lot going on and many papers to sign, but you’ll have your real estate agent for guidance along the way. This checklist can also help make sure you stay on track throughout the closing process.
Step 7—Welcome to homeownership
Congratulations, homeowner! Although this is the last step, it’s just the beginning of your journey as a homeowner.
You’ll have a lot of new responsibilities, like paying your mortgage on time and maintaining your home — plus ongoing expenses, like property taxes and insurance.
Depending on the type of home and neighborhood, there could be ongoing homeowners association (HOA) or condo fees. Most standard homeowners insurance policies don’t cover all possible hazards or natural disasters, so you may want to supplement with additional flood or earthquake insurance. And unlike most rental situations, you’ll now be responsible for all repairs and maintenance, as well as any home improvements.
The best part is that you can now truly make the home your own.
And remember, Fannie Mae is your go-to resource for every step of your homeownership journey.
Helpful resources and tools for homebuyers
First-time homebuyer course
Learn more about the homebuying process with HomeView®, Fannie Mae’s online course for first-time buyers, which fulfills the education requirement for most mortgage products.