How to Buy a House

Five Steps for Buying Your Next Home

Buying a new house is exciting, but it can feel a little overwhelming, too. Our homebuying guide breaks down the most important steps to help make buying your next home easier!

1. Decide How Much Home You Can Afford

Estimating home prices that you can afford is a great place to start when you are buying a house. Your income and savings, current interest rates, property tax, homeowners insurance costs, and other factors affect how much home you can afford. You can use our affordability calculator to help you figure these out.

• Get prequalified. Prequalification helps you understand how much money mortgage lenders might let you borrow to buy a house. It gives you a prequalification letter, too, which you’ll need when making an offer. Get prequalified online now.
• Save cash. You’ll need money to make a down payment and to pay closing costs. You may need cash for repairs and moving expenses, as well. Learn how much money you might need to buy a home.
• Read our tips. There are many ways you can save money when you buy a new home. Check out our home affordability tips.

2. Shop for Homes to Buy

Once you’ve explored home prices that you can afford and saved the money you’ll need, you are ready to start shopping for homes. Many homebuyers begin their search online. Consider taking these steps:

• Choose where you want to live. The community where you buy your next house will have a big impact on how satisfied you are with your home purchase. Read about how to decide where to live.
• Decide what you want. Make a list of features for your next home, including size, square footage, number of bedrooms and bathrooms, yard size, age, condition, amenities, and more.
• Go to open houses. Attending open houses is a great way to shop for your dream home! Check out our open house tips.
• Work with a buyer’s agent. Real estate agents can help you find houses, arrange showings, make offers, negotiate prices, and more.

HouseLogic® estimates that the average buyer might spend 10 to 12 weeks actively shopping for a new house, making offers, and having one of those offers accepted. The amount of time it takes you to find your next home might be shorter or longer than this estimate.

3. Make an Offer on a Home

Once you’ve found a home, the next step is to make an offer. The purchase price you want to pay is the most important part of your offer, but it is not the only one. Your offer will likely also include:

• Contingencies. Contingencies are conditions that must be met before the sale closes. They often make the purchase dependent on the results of the home appraisal, home inspection, and title search. Learn more about contingencies.
• Prequalification and Proof of Funds letters. These are documents that demonstrate that you are qualified to get a mortgage large enough to buy the house and have the cash to make a down payment and pay closing costs.
• Earnest money. This money is also called a “good faith deposit.” Most home offers include earnest money that demonstrates you are serious about buying the home and will make reasonable efforts to close the sale. Learn more about earnest money.
• Other information. Your offer typically includes information about the house, a proposed closing date, and more.

Keep in mind that it’s common for sellers who are interested in your offer to negotiate before they accept it. A buyer’s agent can help you prepare an effective offer and negotiate with the seller on your behalf.

4. Apply for a Mortgage

You’ll need to complete an application and provide credit, income, and financial documents to get approved for a mortgage with us. Learn more about how to apply for a mortgage.

Our experienced Loan Advisors can help you choose a loan that’s right for you. Most homebuyers are eligible for Conventional and FHA loans. Conventional loans can have higher credit, financial, and down payment requirements compared to FHA loans but offer you competitive rates and usually less expensive mortgage insurance. Learn more about the differences between FHA and Conventional loans.

5. Get Approved and Close

Once you’ve completed your application and submitted your documents, we’ll begin our review of your mortgage application. You’ll need to complete certain tasks during this stage, including signing your disclosures. Learn more about our mortgage application process and check out these key steps:

• Understand home appraisals. We’ll request an appraisal to estimate the house’s current market value. This is an important part of determining how much money you can borrow and approving your application. Learn about home appraisals.
• Understand title searches. We’ll request a title search to confirm that the seller is the legal owner of the home and that there are no financial claims on the property. Learn about title searches.
• Get a home inspection. An inspection looks for problems with the home you might want the seller to fix before the sale is final. Learn about home inspections.
• Shop for homeowners insurance. You’ll need to buy homeowners insurance before the mortgage can be finalized. Shopping for insurance can help you get better rates. Learn about homeowners insurance.
• Close on your mortgage. Once your mortgage has been approved, closing is next. Closing requirements vary from state to state. We’ll explain the requirements in your state. We offer a Close-on-Time Guarantee*, worth up to $1,000. To learn more, see the eligibility requirements.
• Pay closing costs. Most mortgages come with closing costs you’ll need to pay or add to your loan amount. We’ll explain your costs and how much cash you’ll need to close. Learn about closing costs.

Once you close, you are the owner of your new home. Congratulations! You are ready to move into your house and begin the next phase of your life. Your new mortgage comes with new monthly payments. At Freedom Mortgage, you'll usually make these payments to us. We’ll make sure you know how to make these payments and can help you set up an online account and automatic payments, too.

*Visit FreedomMortgage.com/Purchase-Promise-Eligibility to view the eligibility requirements for the Close-on-Time Guarantee.