How buying works

Before you fall in love with a house, do one free thing first: get a pre-approval. It is a letter from a lender. It says how much they would loan you for a mortgage, the loan you pay back monthly for years.

Why first? A pre-approval makes you a serious buyer, so sellers take your offer for real. And it costs nothing. The lender looks at your pay, your savings, and your DTI, the slice of your income that already goes to debt. Then they hand you a number.

Get letters from two or three lenders, not one. The rate and the fees are different at each. Shopping around can save you real money, and asking does not hurt your credit when you do it inside a short window.

A home deal has a small crowd in it. Knowing who does what keeps you calm.

• Your agent finds homes, books tours, and writes your offers.
• The lender gives you the loan.
• The inspector checks the home's condition.
• The appraiser checks the home's value for the lender.
• The title company makes sure the seller really owns the home and moves the money on closing day.

Most of their fees are part of your closing costs, and they come out of the deal at the end. Before you sign anything with anyone, ask one plain question: how do you get paid? A straight answer is a good sign. A dodge is a warning.

Your pre-approval number is a ceiling, never a target. The lender tells you the most they will lend. That is a different question from what you can carry every month without stress.

The real monthly cost of a home has a name: PITI. That is principal, interest, taxes, and insurance, all in one payment. It runs bigger than people expect. Then add repairs, because no landlord shows up to fix the roof now.

So shop under your max. Leave room for the life you actually live: food, gas, the kids, a night out, a bad month. A home that eats every dollar is a trap, even a nice one.

You found the one. Your agent writes an offer. Two things matter most here.

Earnest money. This is a deposit you put down to show you mean it, often around 1% of the price. It is not an extra fee. It goes toward your cash at closing. If the deal goes through, it counts. If you walk away for a reason the contract allows, you get it back.

Contingencies. These are your safety exits, written into the offer. Two of them protect you most. An inspection exit lets you leave if the home is a wreck. A financing exit lets you leave if your loan falls through. Keep them both. They are your escape hatches.

An inspection is a paid pro walking the whole home: roof, pipes, wiring, heat, foundation. It costs a few hundred dollars. Never skip it, no matter how clean the place looks.

Here is why. A few hundred dollars can save you tens of thousands. A cracked foundation or a dead furnace is not something you catch on a tour. The inspector catches it.

And here is the power move. The inspection report is your walk-away card. If it turns up something big, you have options. You can ask the seller to fix it. You can ask for money off the price. Or you can leave with your earnest money, if you kept that exit. Bad news before you buy is a gift.

Next the lender orders an appraisal. A pro gives their opinion of what the home is really worth. The lender does this to protect the money, since they will not lend more than the home is worth.

If the appraisal matches the price, you roll on. If it comes in low, you have room to talk. The seller can drop the price. You can cover the gap in cash. Or you can walk. It is one more check that keeps you from paying too much.

Closing day is the finish line. You sit down, you sign, and the keys are yours.

What you bring: a photo ID and the cash to close. That cash is your down payment plus your closing costs, sent by wire or a certified check. Bring no surprises. The title company tells you the exact number a few days ahead.

What you sign: a stack. The big one is the mortgage note, your promise to pay. Read the payment, the rate, and the term out loud if you have to. They must match what you were told. If a number looks off, stop and ask. You are allowed to slow the whole room down.

That is the whole path: pre-approval, your team, a smart price, an offer, an inspection, an appraisal, and the keys. None of it is magic. It is steps, in order, done with your eyes open.