How can I start the home buying process

Buying a house

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Buying a house today

Let's be clear: There's no wrong time to buy a house. But market trends, interest rates and life events could all create the perfect homebuying conditions, whether it's your first house or your ultimate dream home.

We have several tools to help you on your homebuying journey, including mortgage calculators, loan options and current rate charts. As always, our expert loan officers are here to help you make the best financial decision when applying for a mortgage and buying a house.

Homebuying FAQ

Why buying a house right now makes sense

What you need to consider before buying a house

How to buy a house today

15 steps to buying a house

Renting vs. buying a house

6 ways to save money when buying a house

How to find the lowest mortgage rate

Why buying a house right now makes sense

No matter what your living situation is, it's pretty common to feel like you need an upgrade to the old homestead. Whether you have your eye on extra bedrooms, a spacious lawn or more storage areas, everyone gets the urge to expand their living space every now and then. Here are just a few life events that might push you into a new home:

icon You’re young, single and just got a promotion. You’re ready to give up renting and build equity in a home of your own.

icon Your family is growing and you need more bedrooms to give everyone their own personal space.

icon You’re an empty nester and you’re looking to downsize into a home that requires less daily upkeep.

icon You just got married and want to move into a bigger home to give you both the space you’re accustomed to, including a dedicated home office.

icon You had your first kid and need room to balance your family’s needs with your work-at-home responsibilities.

On top of all of those reasons to buy a house, keep in mind that, as of 2020-2021, mortgage lending rates are at or close to historic lows. There’s no telling when interest rates will go back up, so now’s a good time to take advantage of these buyer-friendly conditions.

What you need to consider before buying a house

Homeownership is a huge commitment, especially when it comes to your ongoing finances. You need to be prepared to consistently make your mortgage payments in full every month. There are additional costs to think about as well, including your homeowners insurance, property taxes and any homeowner’s association (HOA) fees you might need to pay. Not to mention, it’s always a good idea to keep a rainy day fund just in case you need to make repairs.

Before wading into the real estate market, take an honest assessment of your financial situation and ask yourself these questions:

icon Are my finances sufficient and stable enough to afford a monthly mortgage payment?

icon Do I have enough saved up for a down payment? If not, have I explored any down payment assistance options that could be available to me?

icon Do I have additional funds to cover closing costs and unforeseen repairs that may be needed after buying a house?

icon Can I pay the extra recurring costs that come with homeownership, like routine maintenance, insurance and property taxes?

icon Have I reviewed my credit score? Do I know how it can affect my interest rate?

icon What is my debt-to-income (DTI) ratio? A low DTI shows a good balance between debt and income.

icon Can I pay my monthly mortgage and have enough money left over to cover unexpected expenses like car repairs bills, child care and medical bills?

Not sure where to begin? Our handy home affordability calculator can help you figure out how much you can afford to spend on a new house. That includes both your monthly mortgage payments and your maximum housing budget.

Depending on where your finances are, it may not be the right time to buy a house — and that’s OK! If that’s the case, take the time to pay down existing debt, save up for a down payment and get your finances in order. Trust us, the housing market’s not going anywhere.

How to buy a house today

Don’t go into the homebuying process without educating yourself first. There’s a lot — and we mean a lot — that goes into buying a house. These are just a few of the items you should keep in mind as you begin your search:

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Your list of must-have features

Know what you absolutely need in a home to narrow down your options and direct your search toward the right locations and properties.

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Your loan options

There are a variety of loan options to choose from, including fixed rate, adjustable-rate and government-insured mortgages. Find the one that best meets your future plans and financial situation.

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Your budget

Figure out how much money you’re comfortable spending on a new house.

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State of the market

You need to act fast in hot housing markets and get an attractive offer on the table ahead of competing buyers.

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Current interest rates

Compare mortgage lending rates against historical trends to see how favorable your home loan conditions are. Keep in mind you may be able to refinance your mortgage later on to take advantage of a better interest rate.

15 steps to buying a house

Buying a house can seem daunting whether you’re a first-time homebuyer or you’ve gone through this song and dance before. What you need is a “buying a house checklist” so you don’t overlook anything. Follow these 15 steps to buying a house so you can be absolutely sure you have all of your bases covered:

1

Decide if buying a house is right for you

2

Find out how much you can afford

3

Set a homebuying budget

4

Polish your loan application qualifications

5

Shop around for the best mortgage rate

6

Choose a home loan type

7

Get a pre-approval letter

8

Find a real estate agent

9

Decide what you need in a home

10

Hit the pavement and start your search

11

Submit your offer

12

Conduct an inspection and appraisal

13

Work out any contingencies

14

Secure your home loan

15

Close on the house

Renting vs. buying a house

Buying a house is pretty appealing if you’ve spent years dealing with landlords and spending a big portion of your income on rent. Both renting and buying a home have their merits, but these are the biggest considerations to weigh:

Cost

Cost

You need to put more money up front when buying a house, but locking in a mortgage rate today means your monthly payments won’t necessarily be dictated by the whims of the housing market later on. Check out our rent vs. buy calculator to get an idea of how much money you might be able to save by buying a home of our own.

equity

Equity

Rent is a sunk cost. Aside from maybe your security deposit, any money you give your landlord is gone for good. On the other hand, every mortgage payment you make builds equity in your home.

Taxes

Taxes

Homeowners need to account for property taxes in their budgets. But keep in mind that renters may still feel the sting when property taxes go up, albeit indirectly, through rent increases. On the other hand, there may be tax incentives for you to take advantage of as a homeowner. Rate does not offer tax advice. Contact your tax advisor with all tax-related questions.

6 ways to save money when buying a house

With your down payment, mortgage, homeowners insurance, closing costs and other expenses to consider, buying a house can be pretty pricey. At the same time, it’s a great way to build wealth, and it’s worth the investment. There are ways to save yourself some money** — not to mention headaches — as you go through the homebuying process. Look at these six ways to save money when you’re buying a house:

1

Get the best mortgage rate

2

Stick with private mortgage insurance (PMI)

3

House hunt out of season

4

Expand your house search

5

Check out houses that need some TLC

6

Explore all of your loan options

How to find the lowest mortgage rate

Buying a house is a huge financial commitment — one that you’ll need to continue making payments on for years to come. With that in mind, you want to be sure you’re getting the best mortgage rate possible so you can lower the total cost of your home. Shop around and see what offers different lenders are willing to put on the table.

Ready to buy a home you can truly call your own? Let our experienced mortgage lending team help you find the right loan option at the right interest rate to fit your budget. The journey to your dream home starts here.

*Rate does not provide credit repair or credit counseling services.

** Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Contact Rate, Inc. for current rates. Restrictions apply.

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Rate for current rates and for more information. All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate, Inc. does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate, Inc. Rate, Inc. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. Rate does not provide tax advice. Please contact your tax adviser for any tax related questions. Some loan products discussed in this article may not be available from or brokered by any of the Rate Companies.

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