If you're searching "how to buy a house," you're probably feeling a bit overwhelmed. Don’t worry; you’re not alone, and you’re exactly where you need to be. Let’s break down this seemingly complex process into easy, actionable steps that demystify everything from financing to getting the keys.
Step 1: Check Your Financial Health
Get a Grip on Your Credit Score1: This number is going to influence everything from your mortgage rate to which loans you qualify for. Get a copy of your credit report (available for free, once per year at annualcreditreport.com), correct any inaccuracies, and understand where you stand.
Pro Tip: Aim for a score of at least 620 to qualify for most loans, but the higher, the better when it comes to individual loan terms, costs, and interest rates. Loan products are available for lower credit scores but it is important to note that not all borrowers will qualify.
Budget Like a Boss: Know what you can comfortably afford each month. This isn't just about mortgage payments; include taxes, insurance, maintenance, and even a buffer for those "just in case" moments. Use our calculators to play around with numbers so you feel comfortable with the monthly outlay.
Step 2: Save for the Upfront Costs
Down Payment Strategies: Not everyone has 20% to put down, and that's OK! Look into options like FHA loans that require as little as 3.5% down. Explore local down payment assistance programs too—they can be a game-changer and our Mortgage Consultants are well-versed in what's available in their local markets. It's the national reach with local expertise that we're known for.
Pro Tip:
Our Home Advantage Zero Down Home Loan2 combines a 1st and 2nd loan under a special FHA program, making homeownership more accessible than ever.
For our military members and veterans, our VA Homebuyer Advantage™ is a powerhouse of a program: offering 0% down and a salute to your service with $0 Origination Fee. We've got you covered!
Now, for the self-starters out there, let's get creative. Imagine owning a multi-unit property with just 5% down. Live in one unit, rent out the others, and let your investment work for you. Our special loan program makes this possible, even if you're tight on cash, by including that estimated future rental income for you.
Set Aside for Closing Costs: These can run 2-5% of your loan amount. Sometimes, you can negotiate with the seller to cover some of these costs, so keep that in mind as you prepare to make offers.
Step 3: Get Pre-Approved
This is more than just a pre-qualification. Pre-approval involves submitting your financials to your Mortgage Consultant who will then tell you exactly how much we're able to lend you. It makes you a serious buyer in the eyes of sellers and can give you a leg up in a competitive market.
Pro Tip: Take a big step up and get your Buyer Advantage™3 pre-approval with a bona fide Commitment Letter that will make sellers and Real Estate Agents take notice. A fully underwritten pre-approval may not be the industry standard anymore, but it's still our focus because we want our client's offers to stand out for all the right reasons!
Step 4: Hire the Right Real Estate Agent
You want someone who’s not only knowledgeable about the market but who also understands what you’re looking for and why. A good agent will save you time by filtering out homes that don’t meet your criteria and will provide invaluable advice during negotiations.
Our Mortgage Consultants are lucky enough to work with some of the best Real Estate Agents in the business and can connect you with someone in your local market today!
Step 5: Shop for Your Home
Now comes the fun part—shopping for homes. Attend showings and open houses, and start visualizing your life in these spaces. Keep a checklist of your must-haves and nice-to-haves to help stay on track. Whether it's a cozy condo or a sprawling estate, knowing what you want and what you can afford is key.
Step 6: Make an Informed Offer
Your agent will help you determine a fair offer based on comparable homes in the area. Remember, it’s not always about going lower—the strength of your offer also depends on other factors like your down payment, seller concessions, and the flexibility of your closing timeline. This is where things get real: Negotiate a price, sign the paperwork, and then... let our team get you to the closing table!
Step 7: Navigate the Closing Process
Once your offer is accepted, you’ll go into escrow. This is when inspections and property appraisals happen, and final loan arrangements are made.
Pro Tip: Stay in close contact with your agent and your Mortgage Consultant to ensure that questions get answered, documents get updated, and everything keeps moving forward without any delays.
Step 8: Close and Celebrate
Closing is when you sign all the paperwork to finalize the transaction. You’ll pay your down payment and closing costs, your new mortgage will move to funding, your county will record everything, and the keys will be yours. Congratulations, you’re a homeowner!
Wrapping it up: You’ve Got This!
So, there you have it. Whether you're zeroing in on zero down or leveraging a multi-unit opportunity, we've got the tools and the know-how to help you make it happen. Don't let homeownership myths hold you back. Start saving, get pre-approved, find your perfect place, and seal the deal. We're here to guide you from saving that first dollar to closing on your new home.
Ready to get started? Let's make your home-owning dreams come true!
1 Prosperity Home Mortgage, LLC is not a credit counselor. Information displayed is not credit advice and should not be relied upon or interpreted as such.
2 No or low down payment options may not be the best product for all borrowers. Please consult your mortgage consultant to discuss your financing options. Prosperity Home Mortgage, LLC is not affiliated with any government agencies. Some and/or all qualifying criteria may be set by independent third-party program sponsors. Not all borrowers will qualify. Contact your mortgage consultant for program eligibility and details. Home Advantage Zero Down FHA mortgage offers down payment assistance up to 5% of the home purchase price to help eligible FHA borrowers with down payment and closing costs.
3 Buyer Advantage is not a final loan approval. A Commitment Letter is based on information and documentation provided by you and a review of your credit report. The interest rate and type of mortgage used to approve you for a specified loan amount is subject to change. which may also change the terms of approval. If the interest rate used for credit approval has changed, you may need to re-qualify. Information provided by you is subject to review and all other loan conditions must be met. After you have chosen a home and your offer has been accepted, final loan approval will be contingent upon obtaining an acceptable appraisal and title commitment. Additional documentation may be required. Not all borrowers will qualify.
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