1. How much can you afford?
Getting in touch with a lender is the best way find out what you qualify for. Your loan officer will take your debt to income ratio, run your credit and give you what is known as a "prequalification letter". Once you have been pre-qualified by your loan officer, you can begin to put in offers. The best lenders to use are direct lenders, who work for the banks and not through an independent loan officer as a middleman. If you are unsure what lender to contact, a real estate agent can help you.
2. The Home Shopping Prerequisite.
What city or area do you want to live in? What kind of home and amenities do you want? 2 story, tile flooring, fireplace, a pool, patio, fenced, rv access, ranch style, traditional, horse property? Before spending precious time looking at plenty of houses that do not match your needs, talk with your agent about all the amenities you may need in a house. They can help you go through your options and get a strategy to find a home you will love.
3. Look for homes for sale.
Look for homes that are available in the area, including Fannie Mae, HUD homes, Foreclosures, short sales, and more. Instead of choosing one as the way to go, try looking into all of your options and that will open your range of houses up. Some of the best home deals are HUD homes. Not all agents can show you these homes, so you are better off working with an agent who can.
4. Make the seller an offer.
This is one of the most exciting steps of the real state process, however, always make sure you are serious about buying the house you make an offer on because you are signing a legal contract. After signing the offer to purchase, you will write a check for the deposit of the property, which is usually 1% of the purchase price along with your prequalification letter.
5. Your offer gets accepted and escrow starts.
Your agent will set up appointment with the inspectors, other agents, and escrow to get everything done to make that house yours. Your total down payment will be sumbitted before the end of escrow, minus the deposit you already gave to your real estate agent in the form of a personal check or money order. Your down payment depends on what type of financing you get. There is FHA financing, which is 3.5% down, or conventional which is at least 10% down. At the end of escrow, the house is yours.