1. Start with a payment you can live with
A lender may calculate what you qualify for, but you decide what feels comfortable. Look beyond principal and interest. Property taxes, homeowners insurance, mortgage insurance if applicable, HOA dues, utilities, maintenance, and your other debts affect the full picture.
Plan for more than a down payment. Closing costs, prepaid taxes or insurance, moving expenses, and reserves can all matter. Use the mortgage payment and budget calculators, then read how to think about affordability.
2. Compare loan options and cash needed
Conventional, FHA, VA, USDA, and other programs have different eligibility rules, costs, and property requirements. A 20% down payment is not always required, but a smaller down payment can change your monthly payment and mortgage insurance costs.
The best comparison looks at the payment, cash to close, and loan terms together. Explore common home loan options and ask which may fit your particular situation.
3. Decide how ready you need to be
A short questionnaire can start a mortgage conversation while you are still exploring. If you are getting ready to make an offer, you may need a more detailed review of income, assets, debts, and credit for a prequalification or preapproval letter. A letter is not final loan approval.
Ask what information the lender has reviewed, what still needs verification, and whether a soft or hard credit inquiry is involved. See the difference between prequalification and preapproval, including why the numbers can change before closing.
4. Review the offer with your agent
The purchase price is one part of an offer. Discuss earnest money, inspection and appraisal provisions, financing terms, seller concessions, and deadlines with your real estate agent before signing. The details and customary practices vary by state and contract.
Before committing, ask your loan officer to estimate the payment and cash needed for that specific property. Taxes, insurance, HOA dues, and property condition can change the numbers you discussed earlier.
Before signing, check the assumptions behind the offer
Three questions that can change the plan
Is the down payment coming from a sale? Get a realistic estimate of net proceeds after payoff, selling expenses, and any credits. Confirm when those funds should be available.
What happens to the earnest money if the deal changes? Have your agent or legal adviser explain the contract’s financing, inspection, appraisal, and home-sale provisions and deadlines. Do not assume a deposit is refundable.
Does this property fit your payment target? Recalculate with its taxes, insurance, HOA dues, and any mortgage insurance, then ask for updated cash-to-close figures.
These are questions to resolve before you accept financial risk, not a substitute for advice on the particular contract or a final loan decision.
5. Stay engaged through closing
Once under contract, respond promptly to requests for updated documents and review the property's inspection, appraisal, title, and insurance information with the appropriate professionals. Avoid treating an early estimate or letter as final approval.
Compare your Loan Estimate and Closing Disclosure. Ask about changes to the rate, payment, closing costs, and cash to close. Confirm wire instructions by calling a trusted number you obtained independently.
Buying in a different state? I’m licensed in 18 states. The planning steps above apply broadly, while local taxes, insurance, contracts, and assistance programs can vary. See where I can help.
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