First-Time Buyer Roadmap: Seven Steps to Your First Home

The seven steps, in order

1. Know your budget. Decide the monthly payment you are comfortable with, not just a price. Count property taxes and insurance.
2. Get a preapproval. Income, savings and credit are reviewed up front, so you shop with real numbers and sellers take the offer seriously.
3. Pick an agent. Choose a local agent who knows the neighborhoods and the kinds of homes you are looking at.
4. Shop. This can take weeks or months. Get insurance quotes on homes you like before you write an offer.
5. Make an offer. Price, seller credits, and inspection and loan contingencies. Your agent and your lender work on it together.
6. Escrow. Often about 30 to 45 days. Inspection, appraisal, insurance and the final loan review all happen here.
7. Close. You sign, the loan funds, and you get your keys. For most closed-end mortgages, you must receive the initial Closing Disclosure at least three business days before consummation. Review any updated disclosure for changes to cash to close.

Who this roadmap fits

Anyone buying a first home, and anyone who has not bought in a long time. It is written for the person who is still months away and wants to know what to work on now, as much as for the person who is ready to shop this weekend.

The steps are the same in every state. The details, such as how escrow works and which help programs exist, change by location. If you are buying in California, the California first-time buyer guide goes deeper.

What to gather now

• Your last 30 days of pay stubs and two years of W-2s, or two years of tax returns if you are self-employed
• Two months of bank statements, every page
• A photo ID
• A list of your monthly debts: car, student loans, credit cards, child support

You do not need a perfect folder to start a conversation. Having these ready simply makes the preapproval faster.

What you pay out of pocket, and when

• Earnest money when your offer is accepted. It goes toward your purchase.
• Inspection during escrow. Rural homes may need well and septic inspections too.
• Appraisal during escrow.
• Cash to close just before signing: the down payment, closing costs and prepaid items, minus any credits. The cash to close guide breaks it down.

Common snags

• Insurance left for last. In fire, flood or storm areas, cost and availability vary a lot. Quote it before you fall in love with a house.
• Rural property surprises. Wells, septic systems and propane are common outside city limits. Ask your agent which inspections to order.
• Moving money around. Large transfers and cash deposits are hard to document. Leave savings where they are until you close.
• New credit mid-purchase. A new car loan or credit card during escrow can change your numbers. Wait until after closing.

Your next step

Pick the step you are on and do the one thing that moves you to the next. For most first-time buyers that is a budget conversation and a preapproval.

When you want to talk it through, book a short phone call with Zak on Chris Lamm’s team at MortgageOne. No credit check is needed for a first call, and you can bring as many questions as you like.