The good news about the home buying process is that the process follows the same basic path for almost everyone. Once you can see the whole thing laid out, it stops feeling like a maze and starts feeling like a checklist. Here are the seven steps, in order, from the day you first talk to a lender to the week after you get the keys.

A quick note before we start: this is a general overview. Timelines, requirements, and costs vary by loan program, property, and state. A Mortgage Center Loan Officer can tell you exactly what applies to your situation.

Step 1: Get pre-approved before you start looking

It’s tempting to open a listings app first, we know. Getting pre-approved helps you understand your budget before you start shopping, so you can focus on homes that fit your finances and be ready to make an offer when you find the right one.

What pre-approval actually is. You give a lender a real picture of your finances, the lender checks your credit and reviews your documents, and you get a letter stating how much you’re likely qualified to borrow. It’s different from pre-qualification, which is a quick estimate based on what you tell the lender without any verification. Pre-approval carries weight with sellers. Pre-qualification mostly carries weight with you. (We wrote a whole post on why that difference matters.)

What you’ll need to provide. Most lenders, including us, will ask for:

  • Recent pay stubs (usually the last 30 days)
  • W-2s or tax returns for the past two years
  • Bank and investment account statements (typically two months)
  • A photo ID
  • Permission to pull your credit

If you’re self-employed, expect to provide a bit more, like business tax returns and a profit and loss statement. For people who are financially secure, but lack a traditional income, our

Our checklist of what you’ll need to get pre-approved covers the full list, and if you want to tidy things up first, getting your finances ready for a mortgage is a good place to start.

Why it matters. A pre-approval letter tells sellers and their agents that you’re a serious buyer who can actually close. In a competitive market, an offer without one often won’t get a second look. It also tells you something important: your real budget, based on numbers a lender has already reviewed.

You can start your application online in about 15 minutes to begin getting pre-approved, or talk to a Loan Officer first if you’d rather have a conversation before you fill anything out. Most pre-approval letters are good for 90 days, so time it for when you’re ready to shop.

Step 2: Set a real budget and pick your loan type

Something important to consider: the number on your pre-approval letter is the most you can borrow, not the amount you should borrow. Those can be two very different numbers. That’s why a Mortgage Center Loan Officer will ask what monthly payment you’re comfortable with, not just what you qualify for.

Start with the monthly payment, not the purchase price. When coming up with your monthly budget, remember that many mortgage payments are four things bundled together: principal, interest, property taxes, and homeowners’ insurance. With a down payment of less than 20% down on a conventional loan, many people will need to add a monthly private mortgage insurance payment to that list. (Also consider: Our PMI Saver loan is a great way to get your down payment under 20% while still avoiding PMI)

Don’t forget the things that often aren’t included in your mortgage payment at all: utilities, HOA dues, maintenance, and the repairs that show up uninvited. To cover yourself for these extra costs, a common rule of thumb is to try to keep your total housing cost under about 28% of your gross monthly income. A Mortgage Center Loan Officer can help you land on a number that fits your whole budget.

Our mortgage calculators will do the math for you, and Budgeting for a Home goes deeper on the costs that are easy to forget.

Don’t forget the cash you’ll need up front. Your down payment could be the biggest cash expense, but closing costs can add another 2% to 5% of the home’s purchase price, and you’ll also want some cushion left over after you close. How much you need to save breaks it down, and the first-time buyer’s guide to down payments covers more options if 20% isn’t realistic right now.

Then, choose a loan that fits. Your Loan Officer will help you compare, but it helps to know the main categories going in:

  • Conventional is the most common choice, with flexible terms and competitive rates for buyers with solid credit.
  • FHA allows lower credit scores and a smaller down payment. Our FHA vs. conventional comparison lays out the tradeoffs.
  • VA loans let eligible veterans, active-duty service members, and military families buy with no down payment and no mortgage insurance.
  • Zero Down, HomeReady® and Home Possible®, and our PMI Saver program are built for buyers who want to get in the door with less cash or skip PMI.
  • If you’re an education professional, medical professional, first responder, or another kind of community hero, the Community Champion Loan was made for you.

You’ll also decide between a fixed rate, which stays the same for the life of the loan, and an adjustable rate, which starts lower and adjusts later. Fixed is the safe default. ARMs have changed a lot since 2008, and they can make sense if you plan to move within, say, 5 to 7 years. The full lineup lives on our purchase loans page.

Step 3: Find an agent and start the hunt

Consider getting a buyer’s agent. A good one knows the local market, spots problems in a listing before you drive out to see it, and handles the negotiation and paperwork that comes later. Get recommendations from friends or coworkers who have recently bought a home, if you can. Otherwise just interview two or three agents and pick the one you’re most comfortable working with. (A Mortgage Center Loan Officer can usually point you toward agents they’ve closed with before, which is a handy shortcut.)

One thing worth knowing: Since 2024, buyer’s agent commissions are negotiated directly with you and spelled out in a written agreement before you tour homes together. Read it, ask what it covers, and don’t be shy about discussing the fee.

Make two lists. Needs on one, wants on the other. Three bedrooms might be a need. A primary bath with two sinks is probably a want. The lists keep you honest when you walk into a house with a beautiful kitchen and a commute you’d hate. They also help your agent filter listings so you’re not wasting time with viewings of homes you’d never want.

Shop the neighborhood, not just the house. You can renovate a kitchen. You can’t move the house closer to work or make the street quieter. Visit at different times of day, check the commute during actual rush hour, and try a few of the less obvious ways to research a neighborhood before you commit. If you’re torn on property type, house vs. condo walks through the pros and cons of each.

Keep your pre-approval current. If the search runs past 90 days, let your Loan Officer know. Refreshing the letter is quick, and you don’t want to find the right house without having one ready.

Step 4: Make an offer (you could expect a little back-and-forth)

What goes into an offer. Your agent, if you have one, will put together a purchase agreement that includes:

  • Your offer price, which your agent will help you set based on comparable recent sales, how long the home has been listed, and how competitive the market is. This is where having the right agent really
  • Earnest money, a cash deposit that shows the seller you’re serious. It’s often 1% to 3% of the price, held by a title company or escrow agent, and credited toward your down payment and closing costs when you close. Be aware that at this point, if you back out for a reason that the contract contingencies don’t allow, you can lose that earnest money.
  • Contingencies cover the reasons that you can back out without losing your earnest money. The common ones are financing (you can walk if the loan falls through), inspection (you can walk or renegotiate if the inspection turns up serious problems), and appraisal (you can walk if the home appraises below the price). Waiving contingencies can make an offer more attractive, but it also removes your safety net. Talk it through with your agent and your Loan Officer before you drop any of them.
  • Your pre-approval letter will be attached, if you have one. This is where Step 1 pays off.
  • A closing date, usually 30 to 45 days out.

The negotiation. The seller can accept, reject, or counter your offer. Counters are normal and usually go a round or two before everyone lands. Selling price usually gets the attention, but closing date, repairs, and who pays which closing costs are all on the table.

Once your offer is accepted. Congratulations, you’re now under contract! Three things happen quickly: your earnest money gets deposited (if you offered any), your contingency deadlines start running, and your loan application goes from pre-approval to the real thing. Call your Loan Officer the same day. They’ll need the signed purchase agreement to lock your rate and get the file moving.

Speaking of locking: your rate can move daily until it’s locked, and you’ll usually have the choice of locking now or floating in hopes of a better number. Read more about Rate lock vs. floating to see the pros and cons of each.

Step 5: Get the home inspected and appraised

These two happen around the same time and get confused constantly, so here’s the difference. The inspection is for you. The appraisal is for the lender.

The inspection. You hire a licensed home inspector (your agent or lender will have names) to go through the house top to bottom, usually within a week or two of going under contract. They’ll check the roof, foundation, electrical, plumbing, HVAC, and anything else that could add up to a hefty cost. Go to the inspection if you can. You’ll learn more about the house in three hours than you would in a year of living there, and you can ask questions as they come up.

Many inspections find something, so don’t panic if yours does too. Old houses have old-house problems; new houses sometimes turn up builder shortcuts. The question is whether anything is big, expensive, or dangerous.

If so, you have options under your inspection contingency: ask the seller to fix it, ask for a credit at closing so you can fix it, renegotiate the price, or walk away. Small stuff, you usually just note and move on. What to expect during a home inspection covers what inspectors look at and what’s normal to find.

Depending on the property and your area, you might also want a separate pest, radon, sewer line, or well and septic inspection. Your agent and inspector can tell you which ones could make sense.

The appraisal. Your lender orders this one, and you pay for it as part of your closing costs. A licensed appraiser visits the home and compares it to recent nearby sales to estimate what it’s worth. The lender needs that number because they won’t lend more than the home’s value, regardless of what you agreed to pay.

Most of the time the appraisal comes in at or above the purchase price and you never think about it again. If it comes in low, you’ll have options to close the gap. These include negotiating the price down with the seller, making up the difference yourself with cash or gift funds, splitting the costs with the seller, or using your appraisal contingency to back out. Your Loan Officer will walk you through the math. Understanding your home appraisal goes into more detail on how appraisers arrive at their number.

Step 6: Get your loan underwritten

What mortgage underwriting is. An underwriter at your lender reviews your entire application file (income, assets, credit, the appraisal, the title work) and decides whether the loan meets the guidelines for the program you and your Loan Officer chose. The more documentation and communication you have with your Loan Officer and Processor, the quicker underwriting can go!

What you’ll get along the way. Within three business days of your full application, you’ll receive a Loan Estimate, a standardized three-page form showing your rate, payment, and closing costs. Loan Estimates contain some closing cost To learn more, things to know about a Loan Estimate goes past the basics.

You’ll also need to line up homeowners insurance before closing, since the lender requires proof of coverage. Shop around, your premium affects your monthly payment and quotes sometimes vary more than people expect.

What not to do. Your lender approved you based on a snapshot of your finances. Big changes to your finances before closing could affect your approval, so it’s best to keep things steady. Until the loan funds:

  • Don’t open new credit cards or lines of credit, even for the furniture store’s 0% offer.
  • Don’t finance a car, a boat, or anything else with a monthly payment.
  • Don’t change jobs, if you can help it. If not, a new job in the same field is usually workable, but tell your Loan Officer as soon as possible in any case.
  • Don’t move large sums of money between accounts without a paper trail, and don’t make big cash deposits. The underwriter has to be able to source every dollar. If you have a big night at the casino, make sure to get a receipt.
  • Don’t co-sign anything for anyone.
  • Don’t miss a payment on anything! Even one late payment could change your score.

We wrote a full list of what to do and not do once you’re pre-approved. If something does slip, like a late payment you didn’t catch, call your Loan Officer right away.

Clear to close. When the underwriter is satisfied, you’ll get the words every buyer wants to hear: clear to close. At least three business days before closing, you’ll receive your Closing Disclosure, which lists your final loan terms and exactly how much money to bring. Compare it line by line against your Loan Estimate and ask about anything that changed.

Step 7: Close, get the keys, and handle the first week right

The day before. Do a final walkthrough with your agent, usually within 24 hours of closing. You’re confirming the house is in the condition you agreed to: repairs done, appliances that were supposed to stay are still there, nothing new is broken. Then arrange your funds. Closing costs and your down payment usually go by wire transfer or cashier’s check, and wire fraud targeting homebuyers is real. Call your title company at a number you already know (not one from an email) to confirm the wiring instructions before you send a dime.

Closing day. You’ll sit down with a closing agent to walk through and sign your closing documents. The ones to take note of are the promissory note (your promise to repay the loan) and the mortgage or deed of trust (what gives the lender a claim on the house if you don’t). Bring your photo ID and your funds. It usually takes about an hour. When the paperwork is recorded and the money has moved, you get the keys. Go ahead and take the photo.

The first week. You’ll be tired and surrounded by boxes, but a handful of things are worth doing right away:

  1. Change the locks. You have no idea how many copies of the old keys are floating around. Reprogram the garage door opener and any keypads while you’re at it.
  2. Set up your mortgage account. With Mortgage Center, you’ll make your payments to us for the life of the loan on most loan products, so there’s no servicing transfer to track. Register for online access through Member Services as soon as possible, and set up autopay to take one thing off your mind during what will be a busy first few months. Your first payment is typically due on the first of the month after your first full month in the house.
  3. Get the utilities in your name. Electric, gas, water, trash, internet. Do it before move-in day if you can!
  4. Find the shutoffs. Main water valve, electrical panel, gas shutoff. It’s good to figure out where they are before you need them at 2 a.m.
  5. File your paperwork. Keep your closing documents somewhere safe. You’ll want them at tax time and if you decide to sell. If your state offers a homestead or principal residence exemption on property taxes, file for it now. It’s usually a one-page form and it can save you money every year.
  6. Start a repair fund. Something will break. Why you need a home repair fund makes the case, and keeping up with regular home maintenance will help you catch problems while they’re still small.

When it’s time to actually haul the boxes, our 14 moving day tips will save you at least one trip back to the old place for something you forgot.

Frequently asked questions

How long does the whole process take?

From accepted offer to closing, 30 to 45 days is the industry standard. Add however long your house hunt takes on the front end, which can be a weekend or six months. Pre-approval itself usually takes a day or two once your documents are in.

What credit score do I need to buy a house?

It depends on the loan. FHA loans are built for buyers with lower scores, conventional loans generally want something higher, and programs like our New Start Loan exist for buyers rebuilding their credit. Guidelines change, so talk to a Loan Officer about where you stand rather than ruling yourself out based on a number you read online.

Do I really need 20% down?

No. That’s one of the most persistent myths in home buying. Plenty of buyers put down 3% to 5%, and VA and Zero Down options require nothing down at all. Less than 20% on a conventional loan usually means paying PMI, which this post explains, but it comes off once you build enough equity. Our PMI Saver Loan is another way around it.

What are closing costs, and how much are they?

 

Does getting pre-approved hurt my credit?

It doesn’t have to. Mortgage Center offers soft credit pulls, which don’t affect your credit score, so you can see where you stand without any impact. If a hard credit inquiry is needed later, it can cost you a few points, but only briefly. Credit scoring models treat multiple mortgage inquiries within a short window (14 to 45 days, depending on the model) as a single inquiry, so shopping lenders won’t pile on the damage. How to save money when rates are high explains how to shop smart.

Can I still buy if I’m self-employed?

Yes. You’ll need to document your income differently, usually with two years of tax returns and a year-to-date profit and loss statement, and lenders look at your net income after deductions. Our Asset Advantage program can also help if you have significant assets but irregular income.

What if I’ve owned a home before? Am I still a first-time buyer?

Maybe. The official definition is broader than most people think, and it can affect which programs you qualify for. What “first-time homebuyer” really means sorts it out.

What happens if the deal falls through?

If it falls through under one of your contingencies, you typically get your earnest money back and start the search again with your pre-approval still in hand. If you back out for a reason the contract doesn’t cover, you may forfeit the deposit. Either way, talk to your agent before making the call.

Ready for Step 1?

Every one of these steps is easier with someone in your corner who has done it a few thousand times. Mortgage Center has been helping Credit Union members buy homes since 1990, and we never hand your loan off to a stranger. Talk to a Loan Officer to get your questions answered, or start your application when you’re ready to get pre-approved.