YOUR PATH TO HOMEOWNERSHIP
Homebuying Guide
Your complete guide to buying a home with confidence.
From your first budget conversation to the day you receive your keys, this guide explains what to expect, what to prepare, and the questions worth asking along the way.
In this guide: Get ready | Get preapproved | Shop & offer | Close on your home
Homebuying Road Map
A Clear Path to Your New Home
A home may seem complex. but it’s simple when you break it down.
Here are the key stages your homebuying journey.
Step 1: Decide what feels financially comfortable
Before browsing homes, start with your own budget. A lender may help you understand how much you may qualify to borrow, but the amount you are comfortable paying each month is a personal decision.
Think beyond the purchase price. Your total housing cost may include principal and interest, property taxes, homeowners insurance, mortgage insurance when applicable, HOA dues, utilities, maintenance, and possible repairs.
Ask yourself:
- How much do I have saved for a down payment, closing costs, moving, and unexpected home expenses?
- What monthly payment leaves room for my other goals and expenses?
- Is my income stable, and am I likely to stay in this home long enough for buying to make sense?
- Are there neighborhoods, property types, or commute needs that will materially affect cost?
Buying a home is not only a financing decision. It is also a lifestyle and long-term planning decision.
Step 2: Prepare your financial picture
Mortgage applications usually involve a review of your income, assets, credit, debts, and the property you want to buy. Gathering documents early can reduce unnecessary delays later.
Documents you may be asked for include:
- Government-issued identification
- Recent pay stubs and W-2s
- Tax returns, when applicable
- Bank and investment account statements
- Information about other real estate you own
- Documentation for gift funds, self-employment income, or other sources of funds, when applicable
Requirements vary by loan program and borrower situation. A loan officer will let you know what applies to you.
Step 3: Understand prequalification and preapproval
Prequalification is usually an initial conversation or estimate based on information you provide. It can be a useful first step when you are beginning to explore a price range.
Preapproval generally involves a more detailed review of financial information and supporting documents. It can help you shop with a clearer picture of your potential financing, but it is not a final approval or commitment to lend.
A final decision still depends on the complete loan file, the property, appraisal, updated documentation, credit, underwriting review, and satisfaction of all applicable requirements.
Before you start shopping, ask your loan officer:
- What price range and payment range should I consider?
- Which loan programs may fit my profile?
- What funds should I plan to bring to closing?
- What could affect my ability to close after I am preapproved?
- How long is the preapproval expected to remain valid?
Step 4: Choose a loan program that fits your goals
Conventional: May be a fit for many qualified buyers and can offer low-down-payment options. Mortgage insurance may apply when the down payment is below certain levels.
FHA: A government-insured option that may provide flexibility for qualified buyers. Mortgage insurance requirements apply.
VA: Available to eligible Veterans, service members, and certain surviving spouses. VA generally does not require a down payment or monthly private mortgage insurance, although lender standards, possible funding fees, and other requirements apply.
Jumbo: May be used when the financing amount exceeds applicable conventional loan limits. Requirements often differ from standard conventional financing.
Down payment assistance: Some programs may help eligible buyers with a down payment and/or closing costs. Availability, income limits, property requirements, and program terms vary.
Alternative-documentation and Non-QM: May be worth exploring for certain self-employed buyers or other borrowers whose situation does not fit traditional documentation. Guidelines vary by program and lender.
Program availability, terms, and qualification requirements vary. Your loan officer can help you explore options based on your specific situation.
Step 5: Shop for a home and write a thoughtful offer
Work closely with your real estate agent as you compare homes. Look at the property’s condition, neighborhood, taxes, insurance availability, HOA dues, commute, and any repairs or upgrades you may need soon after moving in.
When you are ready to make an offer, your agent can help you understand the purchase contract, earnest money, requested contingencies, closing timeline, seller concessions, and other details. Your loan officer can help explain how the financing terms interact with the offer.
Questions to ask before you submit an offer:
- Is the property type eligible for the financing I am considering?
- Are there HOA dues, special assessments, or property features that affect the payment or loan approval?
- What inspection rights and deadlines are included in the contract?
- What happens if the appraisal is lower than the contract price?
- What funds are due for earnest money and when?
- What is the expected closing date, and is the timeline realistic?
Step 5: Shop for a home and write a thoughtful offer
Loan application and disclosures. Your loan officer will collect or update information and provide required disclosures. Review your Loan Estimate carefully, including the estimated interest rate, payment, cash to close, and costs.
Appraisal. The appraisal is an independent opinion of the property’s value. If the appraised value comes in below the contract price, your agent and loan officer can discuss the available next steps. The outcome may depend on your contract, loan program, and negotiations.
Underwriting. The underwriter reviews your complete file to determine whether it meets applicable guidelines. You may be asked for additional documents or explanations. Respond as quickly and completely as you can.
Insurance and closing services. You will generally need homeowners insurance before closing. Depending on the transaction, there may also be title, escrow, settlement, or other service providers involved.
Final review. Before closing, review the Closing Disclosure. For many mortgage transactions, borrowers receive it at least three business days before closing. Compare the final terms and cash-to-close figure with the information you expected and ask questions promptly.
Step 6: What happens after your offer is accepted
Loan application and disclosures. Your loan officer will collect or update information and provide required disclosures. Review your Loan Estimate carefully, including the estimated interest rate, payment, cash to close, and costs.
Appraisal. The appraisal is an independent opinion of the property’s value. If the appraised value comes in below the contract price, your agent and loan officer can discuss the available next steps. The outcome may depend on your contract, loan program, and negotiations.
Underwriting. The underwriter reviews your complete file to determine whether it meets applicable guidelines. You may be asked for additional documents or explanations. Respond as quickly and completely as you can.
Insurance and closing services. You will generally need homeowners insurance before closing. Depending on the transaction, there may also be title, escrow, settlement, or other service providers involved.
Final review. Before closing, review the Closing Disclosure. For many mortgage transactions, borrowers receive it at least three business days before closing. Compare the final terms and cash-to-close figure with the information you expected and ask questions promptly.
Step 7: Closing day checklist
- Review your Closing Disclosure and ask about anything you do not understand
- Confirm the amount and approved method for any funds due at closing
- Bring required identification
- Confirm homeowners insurance is active
- Ask who will provide keys and when possession occurs
- Keep copies of the signed closing documents
- Be alert for wire-fraud attempts; verify instructions directly using a trusted phone number before sending funds
Closing completes the legal loan and property-transfer process. Take time to understand what you are signing.
Step 8: After you become a homeowner
Save your Closing Disclosure, note, deed documents, and proof of homeowners insurance in a secure place. They may be useful for tax preparation, future refinancing, or when you sell the property.
Set aside funds for routine maintenance and unexpected repairs. Review your homeowner’s insurance periodically, especially after major improvements or changes in property value.
If your goals change later, such as renovating, consolidating higher-interest debt, or exploring a refinance, a future conversation about your mortgage options may be helpful.
Protect your loan while it is in process
Once you begin the mortgage process, tell your loan officer before making financial changes. Even positive changes can require additional review.
Until closing, it is generally wise to avoid:
- Opening new credit cards or financing a large purchase
- Changing jobs or pay structure without discussing it first
- Making large cash deposits or transfers without a clear paper trail
- Co-signing for another person’s debt
- Missing payments on existing obligations
When in doubt, ask before you act. It is easier to plan for a change than to explain it later in underwriting.
Homebuying FAQs
How long does it take to buy a home?
The timeline varies based on your preparation, local market, property, loan type, appraisal, underwriting, and contract terms. Once under contract, many financed purchases take several weeks, but there is no guaranteed timeline.
Can I buy a home if I am self-employed?
Possibly. Self-employed buyers may qualify using traditional or alternative documentation depending on the loan program and their circumstances. Income, business history, credit, assets, and other factors are reviewed.
What if the home appraisal is lower than the purchase price?
Your agent and loan officer can help explain the options. Depending on the contract and loan program, parties may renegotiate the price, the buyer may bring additional funds, a reconsideration of value may be requested, or other options may be available.
What is mortgage insurance?
Mortgage insurance may be required for certain loan programs or down-payment levels. Conventional private mortgage insurance and FHA mortgage insurance have different rules. It is important to understand how it affects your payment and when it may be removed, if applicable.
What happens if my financial situation changes before closing?
Contact your loan officer promptly. Changes to employment, income, credit, debts, assets, or the property can affect the loan review and may require updated documentation.
Do I need a real estate agent?
You are not legally required to use one, but many buyers choose an agent to help search for homes, evaluate offers, manage contract deadlines, negotiate, and coordinate the transaction. Consider interviewing agents before choosing one.
Ready to explore your homebuying options?
Prime Choice Funding has been helping homeowners since 2007. Talk with an experienced loan officer about purchase financing that may fit your goals.
Prime Choice Funding, Inc. | NMLS #117375 | Equal Housing Opportunity
This guide is for educational purposes only and is not financial, legal, or tax advice. Loan programs, rates, terms, and eligibility are subject to change and approval. Not all applicants qualify.