Unless you’re paying in cash, you’ll need to apply for a mortgage loan. (Already pre-approved? Good for you!) If you’re not pre-approved, meet with at least two or three lenders and compare their loan options. Your real estate agent can recommend some lenders for you if you don’t have one. Be prepared to ask questions, and be completely open with the lenders about your finances. Sometimes you’ll qualify for more than what you actually want to pay. You can work backwards with your lender as well. “If I want my payment around $XXXX, how much should I spend on a house?”

You will need to provide a pre-approval letter to the seller when you present an offer, so let your REALTOR® know what lender you are working with so they can coordinate this. Even though you are pre-qualified for a loan, it will most likely still take 30-45 days from the time you put an offer in until closing to go through the entire underwriting process. Your REALTOR® will help you in selecting a close date with your offer.

Earnest money is what you will pay at the time of your offer that shows how serious you are about the home. It’s your skin in the game! This money will count toward your down payment, but if you choose to back out after the inspection/contingency time, you forfeit this money to the seller.

A contingency is when the purchase of the home is dependent on certain things happening the way they should. If they don’t, you can get out of the purchase agreement and still get your earnest money back. The most common contingencies are inspection and financing. The financing contingency gets you out if something happens between application and closing that won’t allow you to get the loan you need to purchase the home. An inspection contingency only lasts for the time you ask for with the offer. Find details on how that works below.

A home inspection is a visual inspection of most of the functions in a home. Inspections aren’t always required, but you should absolutely get one even if you’re not getting a loan. It usually occurs the first week after an accepted offer. Go over the inspection report in detail with the inspector to make sure you’re familiar with any problems, their severity and the estimated cost to fix them. Additionally, you may also want to get your home checked for radon and pests, which are additional costs.

If the inspector finds problems, you may be able to get the seller to make/pay for necessary repairs or lower the price to adjust for the cost. If you find too many issues, you can still back out of the purchase during this time and get your earnest money back.

Some homes will come with a home warranty that the seller offers when they list the home. If a warranty is not offered, there is always the option to ask for a home warranty on the purchase agreement to be paid for by the seller. Usually they cover all appliances and mechanicals for the first year you own the home. There may be a small copay for repairs. The benefit is this insures you that you won’t have any major cash you’ll need to put into the home during the first year. One popular company is HMS.

Your lender will require your house be appraised by a professional, who is usually provided by the lender. The appraisal gives you a detailed report on the value of the home. If the home’s appraised value is less than the purchase price, you will need to either make a greater down payment or negotiate with the seller to lower the price. A lender won’t give you a loan for more than the appraised value if it’s FHA. On conventional loans, we usually write that into the offer or else they will require cash for the difference.

While you are waiting for the close date, your lender will be asking for lots of copies and verification for the loan underwriters! As we approach closing, make sure the funds you need for closing and in reserves are both accessible. If you need to pull money from an investment, do it right away. Keep the paperwork from the transaction to show your lender you liquidated funds to get your down payment.

In most cases, buyers are expected to pay for homeowners insurance upfront, before closing. Depending on where you live, you might need extra insurance, like flood coverage. Shop around at several different insurance companies for the best rate. Your lender will need proof of insurance before approving your mortgage.

You will be allowed to do a final walk-through of your new home 48 hours before closing.

This allows you to make sure any items that should be there, as per your contract, remain. It also lets you check the condition of the home to make sure no extra damages have occurred. If you find anything different from what you agreed upon, you may postpone the closing to give the seller time to fix the problem.

It’s important that you catch any issues during the final walk-through. If you spot them after closing, they’re going to be your problem.

This is the day when you sign the mortgage documents and officially gain ownership of the property. Most likely, your REALTOR® will be there, as well as the seller, the seller’s agent, the closing officer and perhaps the mortgage broker.

You will need to bring ID and a cashier’s check/wired funds to pay closing costs, which you will know in advance. Your spouse will also need photo ID. (In some states, spouses are required to attend and sign papers even if they aren’t on the mortgage.) Check with your REALTOR® about the details of your closing.