Buying a house is one of the biggest financial decisions you’ll ever make. Whether it’s your first time or you’ve done this before, the home buying process can feel complicated fast. This guide walks you through every step of how to buy a home, from figuring out what you can afford to getting the keys on closing day, so you know exactly what to expect.

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What Do You Need to Buy a House?

Before you start browsing listings, you need three things in place:

  • A qualifying credit score. Most conventional loans require a 620 or higher. FHA loans may accept scores as low as 580. VA and USDA loans have more flexible requirements for eligible buyers.
  • Proof of stable income. Lenders will ask for recent pay stubs, W-2s, tax returns and bank statements.
  • Funds for your down payment and closing costs. Down payments range from 0% (VA and USDA loans) to 3–20% depending on your loan type. Closing costs typically run 2–5% of the loan amount.

Not sure where you stand? The best first move is talking to a loan officer before you do anything else.

How Much Does It Cost to Buy a House?

Here’s a realistic breakdown of the upfront costs most buyers face:

Cost Typical Range
Down payment 0% – 20% of the purchase price
Closing costs 2% – 5% of the loan amount
Home inspection $300 – $500
Home appraisal $400 – $600
Moving costs $1,000 – $5,000+ depending on distance

The right loan program can significantly reduce what you need upfront. Some buyers may qualify for programs that cover the down payment entirely. Talk to a loan officer to see what applies to your situation.

Step-by-Step: How to Buy a House

Understanding the home buying process from start to finish is the best way to avoid surprises. Whether you’re learning how to buy a home for the first time or you’ve been through it before, the steps below cover everything from your first credit check to closing day.

Step 1: Check Your Credit and Finances

Start by getting a clear picture of where you stand financially. Pull your credit report, review your monthly debt payments and look at how much you have saved. This gives you and your loan officer a real baseline to work from.

Understanding the difference between a soft pull and a hard pull on your credit is important here. Checking your own credit or getting pre-qualified typically uses a soft pull and does not affect your score. A formal application triggers a hard pull.

If your credit needs improvement, a good loan officer will walk you through specific steps to get it where it needs to be, whether that means paying down certain accounts, disputing errors or giving it a few months of on-time payment history.

Step 2: Figure Out Your Budget

Knowing what you can afford is different from knowing what you’ll be approved for. Your approval amount reflects your financials. Your budget needs to account for property taxes, homeowner’s insurance, HOA fees if applicable, maintenance and utilities on top of your monthly mortgage payment.

A good rule of thumb: your total housing costs should stay at or below 28–30% of your gross monthly income. Not sure how far your income goes? Read our breakdown of how much house you can afford on a $100k salary for a real-world example of how these numbers work.

Step 3: Get Pre-Approved

Pre-approval tells sellers you’re a serious buyer. A Go Direct Approval from Direct Mortgage Loans goes a step further. We verify your income, assets and credit before you ever make an offer, which means:

  • Sellers treat your offer more seriously in competitive markets
  • Underwriting surprises are handled early, not at the last minute
  • You may be able to close faster once you’re under contract

This step costs you nothing and puts you in a stronger position from day one.

See how much you can afford.

Your approval amount will give you an estimate of how much you can afford.

Step 4: Understand Your Loan Options

Not all mortgages work the same way. Here’s a plain-language breakdown of the most common options:

Fixed-Rate Mortgage Your interest rate stays the same for the life of the loan. Your monthly principal and interest payment never changes. Good if you plan to stay in the home long-term and want predictable payments.

Adjustable-Rate Mortgage (ARM) Starts with a lower fixed rate for a set period and then adjusts periodically based on market rates. May make sense if you plan to move or refinance before the rate adjusts. Learn more about how ARM loans work and whether one fits your timeline.

FHA Loan Backed by the Federal Housing Administration. Accepts lower credit scores and down payments as low as 3.5%. A popular option for first-time buyers. Read our complete guide to FHA loans for full eligibility details, or compare the benefits and disadvantages of FHA loans before deciding.

FHA 100% Financing (0% Down) Some buyers may qualify for FHA loans with no down payment through specific programs. Ask your loan officer if you may be eligible.

VA Loan Available to eligible veterans, active-duty service members and surviving spouses. Offers up to 100% financing for eligible borrowers, no private mortgage insurance and competitive rates. VA loans are also assumable in some cases, which can be a significant advantage in a higher-rate environment.

USDA Loan For buyers in eligible rural and suburban areas. Offers up to 100% financing for eligible borrowers with no private mortgage insurance required.

Conventional Loan Not government-backed. Typically requires a 620+ credit score and a down payment of at least 3–5%. Be aware that loan-level pricing adjustments (LLPAs) affect the rate you receive on conventional loans based on factors like credit score and down payment size.

Your loan officer will match your financial profile to the options that make the most sense for your situation. If you want to understand how direct mortgage lenders differ from large banks, that’s worth reading before you shop.

Step 5: Explore Down Payment Assistance and State Programs

Depending on where you live and what you do for work, you may qualify for down payment assistance programs that reduce your upfront costs significantly.

Your loan officer will know which programs are currently active and whether you may be eligible.

Step 6: Work With a Real Estate Agent

A good real estate agent is your guide on the home side of this process, the same way your loan officer is your guide on the financing side. They can:

  • Access listings before or beyond what shows up on public search sites
  • Research recent sales and neighborhood trends to help you make smart offers
  • Handle negotiations, contingencies and paperwork on your behalf
  • Keep your transaction on timeline from offer to close

Understanding what contingent means in a real estate transaction is important before you start making offers. Your agent will walk you through financing contingencies, inspection contingencies and what happens if conditions aren’t met.

It also helps to know whether a buyers market or sellers market exists in your area right now, since that affects your offer strategy significantly.

Step 7: Start House Hunting

Now the hands-on part begins. Go in with a clear list: what you absolutely need (bedrooms, location, commute distance) versus what you’d like but could live without.

If you’re deciding between property types, our guides on condos vs. apartments, condos vs. townhouses and buying a townhouse can help you think through the trade-offs before you commit to a property type. You can also browse our complete guide to home styles and structures if you’re still exploring what kind of home fits your lifestyle.

If condos are on your list, make sure to check whether they are VA-approved condos if you’re using a VA loan, as not all condo buildings qualify.

A few things to keep in mind while you search:

  • Tour more homes than you think you need to. Context helps you make better decisions.
  • Pay attention to the neighborhood, not just the house. You can renovate a kitchen; you can’t move a street.
  • In competitive markets, be ready to move quickly. Have your pre-approval in hand before you fall in love with a property.

Step 8: Make an Offer

When you find the right home, your agent will help you put together a competitive offer. This includes the purchase price, any contingencies (financing, inspection, appraisal) and your proposed closing timeline.

In competitive markets, consider submitting a cover letter with your home offer to help your offer stand out with the seller. It’s not always a deciding factor, but it can help in close situations.

Step 9: Go Under Contract

Once the seller accepts your offer, you’re officially under contract. This means:

  • You submit an earnest money deposit (typically 1–3% of the purchase price) to show your commitment
  • The home is taken off the market
  • Both sides begin working through the steps required before closing

Your agent and loan officer will keep you on track with deadlines during this period.

Step 10: Get a Home Inspection

Never skip the inspection. A licensed home inspector will evaluate the property’s structure, roof, electrical, plumbing, HVAC and more. The report gives you a clear picture of what you’re buying.

If the inspection turns up significant issues, you have options: ask the seller to make repairs, request a price reduction, negotiate closing cost credits or, if the issues are serious enough, walk away using your inspection contingency.

Step 11: Get a Home Appraisal

Your lender will order an appraisal to confirm the home’s market value supports the loan amount. It helps to know in advance what hurts a home appraisal so you’re not caught off guard by the result.

If the appraisal comes in lower than the purchase price, you have three options:

  1. Negotiate with the seller to lower the price to the appraised value
  2. Pay the difference out of pocket (covering the “appraisal gap”)
  3. Walk away if the deal no longer makes financial sense and your contract includes an appraisal contingency

Step 12: Final Loan Approval and Clear to Close

Your lender conducts a final review before issuing a “clear to close.” Understanding what clear to close means and what happens between that milestone and closing day will help you avoid last-minute surprises.

During this phase:

  • Income, employment and credit are re-verified
  • All conditions from your initial approval are confirmed
  • Any outstanding documentation is collected

Important: do not make large purchases, open new credit accounts or change jobs during this period. Any major financial change can affect your approval status.

Step 13: Close on Your New Home

Closing day is when everything becomes official. You’ll review and sign your final loan documents, pay your remaining closing costs and down payment and receive the keys.

Before closing, you’ll receive a Closing Disclosure at least three business days in advance. Review it carefully and flag anything that doesn’t match what you were quoted.

How Long Does It Take to Buy a House?

From accepted offer to closing, most purchases take between 30 and 60 days. The timeline depends on your loan type, how quickly inspections and appraisals are scheduled and how smoothly both sides meet their contractual deadlines.

Getting a Go Direct Approval before you’re under contract can help shorten this window since much of the underwriting work is already complete.

Can You Buy a House With No Money Down?

Yes, in some cases. VA loans offer up to 100% financing for eligible veterans and service members. USDA loans offer up to 100% financing for eligible borrowers in qualifying areas. And some buyers may qualify for FHA 100% financing programs that eliminate the down payment requirement.

State and local down payment assistance programs can also reduce or eliminate the upfront cash requirement for eligible buyers.

Not everyone will qualify for these programs, but it’s worth asking your loan officer what may be available based on your situation.

Can You Buy a House With Bad Credit?

It depends on how low your score is and what loan type you’re pursuing. FHA loans may accept scores as low as 580 with a 3.5% down payment. Some programs accept scores as low as 500 with a larger down payment. VA and USDA loans often have more flexible credit requirements for eligible borrowers.

If your credit isn’t where it needs to be right now, a loan officer can help you build a plan to get there. It may not take as long as you think.

How to Buy a House With Low Income

Income requirements vary by loan type and lender. What matters to a lender is your debt-to-income ratio (DTI), not just your gross income number. Government-backed loans like FHA, VA and USDA often have more flexible DTI guidelines.

Single-parent homebuyers face unique financial challenges and there are programs designed specifically for that situation. Down payment assistance programs, state housing agency loans and employer homebuying benefits can also help bridge the gap for buyers who qualify.

What to Know About Mortgage Rates and Buydowns

Your interest rate affects your monthly payment more than almost any other factor. If current rates feel high, it’s worth knowing that mortgage buydown programs allow you to pay upfront to reduce your rate, either temporarily or permanently. Read our full guide on how to buy down your interest rate to understand when this strategy makes financial sense.

And if your situation changes after you buy, refinancing is always an option. Knowing how often you can refinance and what triggers make it worth it gives you more flexibility as a homeowner.

Find out what your mortgage options are!

Get expert advice and find out what you qualify for when you submit your application online.

FAQs On How To Buy A House  

What credit score do I need to buy a house?

Conventional loans generally require a 620 or higher. FHA loans may accept 580 or above. VA and USDA loans have more flexible requirements depending on the lender and your overall financial profile. Generally, the higher your score, the better the rate and terms you may qualify for.

How much money do I need to buy a house?

It depends on your loan type. You’ll need funds for your down payment (anywhere from 0% to 20% of the purchase price), closing costs (typically 2–5% of the loan amount) and reserves. Some programs reduce or eliminate the down payment requirement for eligible buyers.

How to buy a house for the first time?

Start with a loan officer conversation before you start looking at homes. Get pre-approved, set a realistic budget, find a real estate agent and follow the 13 steps outlined in this guide. First-time buyers often qualify for programs with lower down payments and flexible credit requirements.

What is the home buying process?

The home buying process typically runs 13 steps: checking your credit, setting your budget, getting pre-approved, choosing a loan type, exploring assistance programs, finding an agent, house hunting, making an offer, going under contract, inspection, appraisal, final approval and closing. From accepted offer to closing day, most buyers complete the process in 30 to 60 days.

How to buy a home with no money down?

VA loans offer up to 100% financing for eligible veterans and service members. USDA loans offer up to 100% financing for eligible buyers in qualifying areas. Some buyers may also qualify for FHA 100% financing programs. Ask your loan officer which zero-down options may apply to your situation.

Can I buy a house without a realtor?

Technically yes, but it’s not recommended for most buyers. A buyer’s agent represents your interests, negotiates on your behalf and guides you through the contract and closing process. In most transactions, the seller pays the buyer’s agent commission, so using one typically costs you nothing.

Is now a good time to buy a house?

The right time to buy depends on your financial readiness, your local market and your long-term plans. If you have stable income, manageable debt and enough saved for your upfront costs, the timing question is more about your situation than the market. Talk to a loan officer who knows your area to get an honest read.

How long does it take to buy a house?

Most purchases close in 30 to 60 days after an accepted offer. The timeline can be shorter or longer depending on your loan type, inspection scheduling and how quickly both parties meet their deadlines.

What does contingent mean when buying a house?

Contingent means the seller has accepted an offer, but the sale depends on certain conditions being met, such as a satisfactory home inspection, a passing appraisal or the buyer securing financing. Read our full guide on what contingent means in real estate for a complete breakdown.

Ready to Get Started?

The first step is a conversation. A Direct Mortgage Loans officer will look at your full financial picture, walk you through every loan option available to you and tell you exactly where you stand.

No guesswork. No pressure. Just clear answers.

Get Started Today
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*When compared to turn times for conventional programs. Approval times may vary depending on individual circumstances. Eligibility and approval is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral and underwriting requirements. Direct Mortgage Loans, LLC NMLS ID# is 832799 (www.nmlsconsumeraccess.com). Direct Mortgage Loans, LLC office is located at 11011 McCormick Rd Ste 400, Hunt Valley, MD 21031.