For buyers
How to buy a home in the United States
The process is the same in every state, even though the paperwork and the customs differ. Here is the full sequence, what each stage costs, and where buyers most often lose money.
Closing costs
What you actually pay at the table
Buyer closing costs typically run 2% to 5% of the purchase price, separate from your down payment. Every figure below appears on your Closing Disclosure.
| Cost | Typical range | What it covers |
|---|---|---|
| Loan origination | 0.5% – 1% of loan | Lender's charge for processing the loan. |
| Appraisal | $500 – $800 | Independent valuation required by the lender. |
| Home inspection | $350 – $700 | Optional but strongly recommended; paid up front. |
| Title insurance | 0.5% – 1% of price | Protects against defects in the chain of title. |
| Escrow / settlement | $400 – $1,200 | Fee for the closing agent handling the funds. |
| Recording fees | $50 – $250 | County charge to record the new deed. |
| Prepaid taxes & insurance | 2 – 6 months | Funds the initial escrow account. |
| Transfer taxes | Varies by state | State or local tax on the transfer of title. |
The three-day rule protects you. Your lender must deliver the Closing Disclosure at least three business days before closing. Compare it against your Loan Estimate line by line — some charges legally cannot increase, and others only within a 10% tolerance. See every line explained.
First-time buyers
Assistance programs most buyers never hear about
Every state operates a housing finance agency, and most offer down payment assistance as grants, forgivable loans or deferred second mortgages. Many cities and counties stack additional programs on top.
- State housing finance agency loans — below-market rates paired with down payment help
- Down payment assistance grants — often 3% to 5% of the purchase price
- Mortgage Credit Certificates — a federal tax credit on a portion of your mortgage interest
- Good Neighbor Next Door — HUD discounts for teachers, firefighters, EMTs and law enforcement
- Employer-assisted housing — hospitals, universities and municipalities sometimes contribute
Eligibility usually depends on household income, purchase price limits and completing a HUD-approved homebuyer education course. Ask lenders directly which programs they are approved to originate — not all of them are.
Avoid these
Five mistakes that cost buyers real money
Every one of these is common, and every one is preventable.
Waiving the inspection
A $450 inspection routinely finds five-figure problems. Shorten the window instead of removing it.
Shopping one lender
Rates and fees vary materially between lenders. Three Loan Estimates inside 45 days count as one credit inquiry.
Draining every reserve
Keep three to six months of housing payments after closing. Water heaters fail in month four.
Opening credit before closing
Financing furniture or a car between approval and closing can re-trigger underwriting and kill the loan.
Budgeting principal and interest only
Taxes, insurance, PMI and HOA dues often add 30% or more to the payment you were quoted.
Skipping the final walkthrough
It is your last chance to confirm agreed repairs were done and nothing was damaged during the move-out.
Buyer FAQ
Questions buyers ask us most
How much do I actually need for a down payment?
Less than most people assume. Conventional loans start at 3% for qualified buyers, FHA at 3.5%, and VA and USDA loans require nothing down for eligible borrowers. A 20% down payment avoids private mortgage insurance but is not a requirement to buy.
What credit score do I need?
Roughly 620 for most conventional loans and 580 for FHA with 3.5% down. Higher scores earn materially better interest rates — the gap between a 660 and a 760 score can cost tens of thousands of dollars over a 30-year loan.
How much are closing costs?
Typically 2% to 5% of the purchase price for a buyer, on top of the down payment. In some markets and some contracts the seller contributes toward them, which is a negotiable term.
Should I waive the inspection to win a bidding war?
We strongly advise against it. An inspection costs a few hundred dollars and routinely surfaces five-figure problems. If you need to strengthen an offer, consider a shorter inspection window or a repair-request threshold instead of waiving it entirely.
What happens if the appraisal comes in low?
Your lender will only finance against the appraised value, so you can renegotiate the price, bring the difference in cash, dispute the appraisal with new comparables, or terminate if you kept an appraisal contingency.
Start with a realistic number
Run your target price through a calculator that includes taxes, insurance, PMI and HOA dues, then get matched with an agent licensed in your state.