Buying your first home, start to finish

Saving the down payment

The twenty percent figure is stubborn folklore. It is a real threshold, because crossing it removes private mortgage insurance, but it is not an entry requirement. Conventional loans start at three percent down, VA loans at zero for eligible service members and veterans, and our First-Time Buyer Program contributes up to $7,500 on top of whatever you have saved.

On a $400,000 home, three percent is $12,000 and twenty percent is $80,000. At $1,200 saved a month, that is the difference between ten months and five and a half years of waiting. There is a genuine cost to putting less down, roughly $150 a month in mortgage insurance on that loan, but there is also a cost to waiting five years in a market that may not wait with you.

Whatever the target, keep the money somewhere boring and liquid. A high-yield savings account at 4.15% APY earns about $2,900 a year on a $70,000 balance and is available the day you need it. Money you will spend within three years does not belong in the stock market. Underwriting also wants to see it seasoned, meaning sitting in your account for at least sixty days, so move funds from other accounts early rather than the week before closing.

Getting pre-approved

A pre-qualification is an estimate based on what you typed into a form. A pre-approval is a decision, made after a lender verifies your income, assets, and credit. Sellers know the difference, and in a competitive situation the second one is often what separates two otherwise identical offers.

Bring two years of tax returns and W-2s, thirty days of pay stubs, sixty days of statements for every account you will draw from, and identification. If you are self-employed, expect to add two years of business returns and a year-to-date profit and loss statement. The pre-approval itself takes about fifteen minutes to start and is typically decided within two business days, at no cost.

Once you have the letter, protect it. Do not change jobs, do not finance a car, and do not open a store card for a discount on a mattress. We re-pull credit shortly before closing, and a new payment that changes your debt ratios can undo an approval in the final week. Members lose loans this way every year, always for something small.

Making an offer

An offer is a price plus a set of terms, and in most negotiations the terms carry more weight than buyers expect. Earnest money of one to three percent signals seriousness. A flexible closing date can be worth thousands to a seller coordinating their own move. A shorter inspection window costs you nothing if you already have an inspector lined up.

Contingencies are the exits you keep. The financing contingency releases you if the loan falls through. The appraisal contingency protects you if the home appraises below the contract price, which matters because we lend against the appraised value, not the price you agreed to. The inspection contingency lets you renegotiate or walk after seeing what is behind the walls. Waiving any of them makes an offer stronger and makes you more exposed; waive them deliberately, if at all, and never because you feel rushed.

Inspection and appraisal

A home inspection costs $400 to $700 and is the best money you will spend in the entire transaction. Go along and follow the inspector through the house. The written report will list dozens of items, and the skill is telling the difference between a note and a problem: a missing outlet cover is a note, and a roof at the end of its life, a cracked heat exchanger, or evidence of water in the basement is a problem.

The appraisal is a separate exercise and it is for the lender, not for you. An appraiser establishes what the property is worth as collateral. If it comes in below the contract price, you have three options: the seller reduces the price, you cover the gap in cash, or you use your appraisal contingency to exit. This is the moment that contingency earns its keep.

Closing day

You will receive your Closing Disclosure at least three business days before you sign. Read it against the Loan Estimate you received at application, line by line. The loan amount, rate, monthly payment, and cash to close should all be recognizable. Ask about anything that is not, before you arrive.

Do a final walkthrough within twenty-four hours of closing to confirm the home is in the condition you agreed to and that any negotiated repairs were made. At the table, bring a government-issued photo ID and your funds by wire or cashier's check. Verify wire instructions by calling the title company at a number you looked up yourself, never a number in an email. Real estate wire fraud is common, and the money is almost never recovered.

Then you sign, the loan funds, the deed records, and someone hands you the keys. The whole process, from accepted offer to that moment, usually takes about thirty days.