# Home Purchase Process

Buy a home in the U.S. from budget and mortgage preapproval through offer, inspection, appraisal and closing, ending with the keys, a recorded deed and your mortgage in place.

- United States · Home and living
- 12 steps · ~59 days · 4 documents
- Last reviewed: 2026-10
- Web page: https://raaya.cloud/p/bundled_HOME_PURCHASE_US

## Steps

### 1. Check your credit and set a budget (3 days)

Your credit history and debt-to-income ratio drive the rate and loan you are offered. Get your free reports from all three bureaus at AnnualCreditReport.com (the only official free site) and dispute errors with the bureau directly; corrections can take 30 days or more.

Set a budget based on the full monthly cost: principal, interest, property tax, homeowners insurance, mortgage insurance if your down payment is small, and HOA dues. Common loan options include conventional loans (some allow as little as 3% down), FHA loans (3.5% down with a credit score of 580 or higher), VA loans for eligible service members and veterans, and USDA loans in eligible rural areas. Many states and cities run down payment assistance programs for first-time buyers; HUD lists local resources by state.

Tip: Avoid opening new credit cards or financing large purchases from now until closing; lenders re-check credit before funding the loan.

Online: https://www.annualcreditreport.com/

### 2. Gather your mortgage documents (3 days)

Lenders verify income, assets and identity. Prepare digital copies so you can upload them quickly.

Typical requests: pay stubs covering the last 30 days, W-2s and federal tax returns for the last two years (self-employed borrowers usually provide business returns and a year-to-date profit and loss statement), the last two months of statements for every bank and investment account, a government photo ID and your Social Security number. You may also need a letter explaining large deposits, gift letters if family is contributing to the down payment, divorce or child support documents, and a VA Certificate of Eligibility for a VA loan.

Tip: Do not move money between accounts or deposit large cash sums without a paper trail; every large deposit on your statements must be documented.

Documents: Recent pay stubs (last 30 days), Federal tax returns and W-2s (last two years), Bank and investment statements (last two months, all pages), Social Security number and government photo ID

### 3. Get preapproved and compare Loan Estimates (7 days)

Apply with at least three lenders (banks, credit unions, mortgage brokers) on the same day or within a short window so the credit inquiries count as rate shopping. Each lender must give you a standard three-page Loan Estimate within three business days of receiving your application, which makes offers easy to compare line by line.

A preapproval letter shows sellers you can get financing for a stated amount. It is not a final loan commitment.

Compare the interest rate, APR, points, lender fees in section A, and the cash needed to close, not just the monthly payment.

Tip: Lenders may only charge a credit report fee before you receive a Loan Estimate and say you intend to proceed; be wary of anyone asking for larger fees up front.

- [ ] Submit applications to at least three lenders within a short window
- [ ] Collect a Loan Estimate from each within three business days
- [ ] Compare rate, APR, points and Section A origination charges
- [ ] Ask each lender about first-time buyer and down payment assistance programs
- [ ] Choose a lender and get a written preapproval letter
- [ ] Confirm how long the preapproval is valid and what could change it

Documents: Recent pay stubs (last 30 days), Federal tax returns and W-2s (last two years), Bank and investment statements (last two months, all pages), Social Security number and government photo ID

### 4. Tour homes with your agent (14 days)

Choose a buyer's agent and tour homes in your price range. Under industry rules adopted in 2024, agents working with you through a multiple listing service generally must have a written buyer agreement with you before touring, stating their compensation and services. Read it before signing; compensation is negotiable.

On each visit, check the roof, windows, water stains, foundation cracks, HVAC age, water pressure and storage. Visit the neighborhood at different times of day, and check commute times, school boundaries, flood zone status on FEMA flood maps, and property tax and HOA costs.

For homes built before 1978, the seller must give you a federal lead-based paint disclosure and the chance to have a lead inspection.

Tip: Ask for the seller's disclosure statement early; required disclosures vary by state and often reveal known defects before you make an offer.

### 5. Make an offer and sign the purchase agreement (2 days)

Your agent drafts a written offer, which becomes a binding purchase agreement once both sides sign. Forms and customs vary by state; in some states an attorney prepares or reviews the contract.

Key terms include the price, earnest money amount and deadline, the closing date, which items are included, who pays which closing costs, and contingencies that let you cancel without losing your deposit if the inspection, appraisal or financing falls through.

Check every deadline in the contract (inspection period, loan commitment date, closing date) and put them in your calendar.

Tip: Waiving the inspection or financing contingency makes an offer stronger but puts your earnest money at risk; understand what you give up before you do it.

- [ ] Agree offer price with your agent using recent comparable sales
- [ ] Set earnest money amount and deposit deadline
- [ ] Include inspection, appraisal and financing contingencies
- [ ] Agree closing date and possession date
- [ ] List included appliances and fixtures
- [ ] Note all contract deadlines in your calendar

### 6. Deposit your earnest money (1 day)

Pay the earnest money to the escrow agent, title company or attorney named in the contract by the stated deadline, usually within a few days of signing. It is held in escrow and credited toward your down payment and closing costs at closing.

You can generally get it back if you cancel under a contingency within its deadline. If you back out for a reason the contract does not allow, the seller may keep it.

Wire fraud targeting home buyers is common: criminals send fake emails with changed wiring instructions. Always confirm wiring instructions by calling the title or escrow company at a phone number you find independently, never one in an email.

Tip: Get a written receipt for the deposit and keep it with your contract.

### 7. Schedule the home inspection (5 days)

Book a home inspector as soon as the contract is signed so the report is ready well before the inspection contingency deadline. Many states license home inspectors; check the license and ask for a sample report.

Consider specialist inspections where relevant: termite or wood-destroying insects (often required for VA loans), radon, sewer line camera, septic, well water, mold, chimney, or a structural engineer for foundation cracks. Fees vary by home size and location.

After the report, decide whether to proceed, ask the seller for repairs or a credit, or cancel within the contingency period.

Tip: Attend in person; the inspector can show you the issues and explain which are routine maintenance and which are serious.

### 8. Lock your rate and finalize the mortgage (7 days)

Tell your chosen lender you intend to proceed, complete the full Uniform Residential Loan Application and upload the signed purchase agreement. The lender orders the appraisal and title work and sends the file to underwriting.

Decide when to lock your interest rate. A lock guarantees the rate for a set period, commonly 30 to 60 days; make sure it lasts past your closing date, because extensions can cost extra. Get the lock in writing.

Respond quickly to underwriting conditions such as updated statements or letters of explanation. Underwriting ends with a conditional approval and later a clear to close.

Tip: If your Loan Estimate changes, the lender must issue a revised one; compare it with the original and ask about any fee increases.

Online: https://www.consumerfinance.gov/owning-a-home/loan-estimate/

Documents: Recent pay stubs (last 30 days), Bank and investment statements (last two months, all pages)

### 9. Clear appraisal, title and insurance (14 days)

Several things must come together before the lender issues a clear to close.

The appraisal confirms the home is worth at least the loan amount; if it comes in low you can renegotiate the price, pay the difference in cash, challenge the appraisal, or cancel under an appraisal contingency. The title company searches public records for liens and ownership problems and issues title insurance; the lender's policy is required, an owner's policy is optional but protects you. You must buy homeowners insurance before closing, and flood insurance if the home is in a high-risk flood zone and you have a federally backed loan.

Tip: Get homeowners insurance quotes early; in some areas coverage is expensive or hard to find, and a late policy can delay closing.

- [ ] Receive the appraisal report and confirm the value supports the loan
- [ ] Review the preliminary title report for liens or easements
- [ ] Decide whether to buy an owner's title insurance policy
- [ ] Buy homeowners insurance and send the declarations page to the lender
- [ ] Buy flood insurance if required for the property
- [ ] Provide any final underwriting documents
- [ ] Receive clear to close from the lender

### 10. Review the Closing Disclosure (1 day)

Your lender must deliver the Closing Disclosure at least three business days before closing. This five-page form shows the final loan terms, monthly payment and cash to close.

Compare it line by line with your latest Loan Estimate. Some fees cannot increase at all, some can increase by up to 10% in total, and others can change. Check the loan amount, rate, whether there is a prepayment penalty, and that seller credits and your earnest money are shown correctly.

A new three-day waiting period is required if the APR rises beyond a set tolerance, the loan product changes or a prepayment penalty is added.

Tip: Ask the lender and settlement agent to explain any number you do not understand before closing day, not at the closing table.

### 11. Send your down payment and closing costs (1 day)

Transfer the cash to close shown on your Closing Disclosure to the settlement agent, usually by wire transfer or cashier's check, a day or two before closing. This covers your remaining down payment plus closing costs such as lender fees, appraisal, title insurance, recording fees, transfer taxes in some states, prepaid interest, and the first deposits for property tax and insurance escrow.

Closing costs vary widely by state and loan; your Loan Estimate and Closing Disclosure show the exact figures.

Call the settlement agent at a known number to confirm wiring instructions immediately before sending, and confirm receipt afterwards.

Tip: Arrange the transfer early; banks may need time for large wires, and some impose daily limits.

### 12. Do the final walkthrough and close (1 day)

Do a final walkthrough within 24 hours before closing to confirm the home is in the agreed condition, agreed repairs were done, and included appliances and fixtures remain.

At closing you sign the promissory note, the mortgage or deed of trust, the Closing Disclosure and other documents. Depending on your state, closing takes place at a title company, escrow office or attorney's office, and in some states documents are signed separately and the deal closes when funds are released.

After closing the deed is recorded with the county. You receive the keys according to your contract.

Tip: Find out where to send mortgage payments and when the first is due, and apply for any homestead exemption your state offers, which can lower property tax.

Documents: Social Security number and government photo ID

## Documents you'll need

- **Recent pay stubs (last 30 days)**: Lenders usually want pay stubs covering the most recent 30 days and may ask for updated ones just before closing.
- **Federal tax returns and W-2s (last two years)**: Used to verify two years of income. Self-employed borrowers usually need business returns too; lenders may also request IRS transcripts.
- **Bank and investment statements (last two months, all pages)**: Shows funds for the down payment, closing costs and reserves. Large deposits must be explained and documented.
- **Social Security number and government photo ID**: Lenders need your SSN to pull credit and verify identity. Bring your photo ID to closing.

## Official sources

- [CFPB: Buying a House](https://www.consumerfinance.gov/owning-a-home/)
- [CFPB: Loan Estimate explainer](https://www.consumerfinance.gov/owning-a-home/loan-estimate/)
- [CFPB: Closing Disclosure explainer](https://www.consumerfinance.gov/owning-a-home/closing-disclosure/)
- [HUD: Buying a home](https://www.hud.gov/topics/buying_a_home)
- [AnnualCreditReport.com (free credit reports)](https://www.annualcreditreport.com/)
- [EPA: Lead-based paint disclosure](https://www.epa.gov/lead/real-estate-disclosure)

General guidance, not legal, tax or immigration advice. Confirm with the official source before you act.

Use this template free in Raaya: https://raaya.cloud/p/bundled_HOME_PURCHASE_US