1. Get pre-approved for a mortgage. You can complete this step before you even start looking at homes. This will give you an idea of how much the bank is willing to loan you, so you can look at homes in the right price range. Sellers will also treat you as a more serious buyer if you are pre-approved. You do NOT have to ultimately choose the same lender that pre-approved you.
2. Decide what type of loan is best for you. Conventional or FHA? Fixed or Adjustable Rate? 20-year or 30-year? Reference the information above for a refresher.
3. Go mortgage shopping! Do your research, and get estimates from multiple mortgage lenders. It's best to get at least three estimates, and don't be afraid to let them compete for your business. You can also hire a mortgage broker to do the shopping for you, but they will charge you a fee.
4. Submit your mortgage application. Once you have chosen your lender, you'll need to officially apply for the mortgage (even if you're pre-approved) and provide all kinds of personal data including W-2 forms, tax returns, pay stubs, and bank statements.
5. Navigate the underwriting process. After you submit your mortgage application, the lender will do their diligence to determine whether you are a eligible for the loan. They will pull credit reports, perform an appraisal on the house, and review all of your documentation. Try not to take out any new debt, switch jobs, or do anything that might harm your credit score during this time. And be as responsive as possible if your lender requests any new documents to keep the process moving quickly.
6. Prepare for closing. Once you're approved, there are a few last-minute things you'll need to do ahead of closing. Do a final home walk-through, make sure your homeowner's insurance is lined up, and prepare all of your funds for closing. You will receive a closing disclosure from the lender three days before closing, which will detail exactly the cash due at close. Get your cashier's check or wires prepped for closing day!
7. Closing day! Head on over to the title company, sign your life away (just kidding), and pick up your keys. Congratulations, homeowner!