How to buy a house
Five steps to buying your next home
Buying a new house is exciting but 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 can you 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 and homeowners insurance costs, and other factors affect how much home you can afford. Use our affordability calculator and take these steps, as well.
- 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 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, as well:
- 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 feet, 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.
Freedom Homes partners can put you in touch with a local real estate agent who can assist you with your home search. You can also get cash rewards when you buy and sell a home through Freedom Homes.* Learn more about Freedom Homes.
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. Happy home hunting!
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 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, about you and anyone who might be buying the house with you, a proposed closing date, and more.
Keep in mind 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 versus 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. There are tasks you’ll need to complete 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 the seller is the legal owner of the home and 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 is finalized. Shopping for insurance can help you get better rates. Learn about homeowners insurance.
- Close on your mortgage. Once your mortgage is 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 step of your life. Your new mortgage comes with new monthly payments. At Freedom Mortgage, you 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.
Last reviewed and updated August 2023 by Freedom Mortgage Corporation.
* Cash Rewards are provided by HomeAdvantage Partners. HomeAdvantage Partners is not affiliated with Freedom Mortgage Corporation. Freedom Mortgage Corporation is not responsible for the program provided by HomeAdvantage. Obtaining a mortgage from Freedom Mortgage Corporation is optional and not required to participate in the program offered by HomeAdvantage. The borrower may arrange for financing with any lender. Freedom Mortgage Corporation is not licensed as a real estate broker, and its employees are not authorized to perform, nor do they perform, any activity that is or could be construed as unlicensed real estate activity.
Home buyers and sellers must use a real estate agent in the Home Advantage network to be eligible for Cash Rewards and the prospective purchaser or seller of real estate property must be eighteen (18) years of age or older. In some cases, a real estate agent in the HomeAdvantage network may not be available. If you are currently working with a real estate agent, this is not a solicitation.
Cash Rewards may be in the form of a closing cost credit disclosed on the Closing Disclosure or a reduced real estate commission with the exception of the following states where a check will be issued after closing; AL, AK, IA, KS, LA, MS, MO, OK, OR and TN.