Steps In Buying A House And Getting Qualified For Mortgage

If you’ve been dreaming of owning a home, learning the exact steps in buying a house is the key to turning your dream home into reality.

Buying a home is one of the biggest financial decisions you’ll ever make, and knowing the right steps in buying a house can save you time, money, and stress. Buying your first home or moving to a bigger one can be stressful. Having a clear plan can help make the process easier. This guide will walk you through each step—from getting pre-approved to closing—so you can move forward with confidence and become a homeowner in 2025.

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Key Takeaways

Buying a home is exciting, but it needs planning.
The main steps in buying a house include: getting pre-approved, hiring an agent, house hunting, making an offer, inspections, mortgage approval, and closing.
Being prepared financially and emotionally reduces stress and increases your chances of a smooth closing.
Gustan Cho Associates specializes in helping buyers get approved—even if other lenders have denied them.

Step 1: Decide If You’re Ready to Buy a House

Before diving into the steps in buying a house, ask yourself if you are ready for the responsibility of homeownership. Home ownership comes with stability and wealth-building opportunities, but it also includes financial and maintenance obligations.

Questions to consider:

Am I ready to live in one place for the next 3–5 years?
Can I handle repairs and maintenance without relying on a landlord?
Do I have money saved for down payment, closing costs, and reserves?
Can I comfortably afford the monthly mortgage, taxes, and insurance?

Homeownership is rewarding, but it requires commitment.

Step 2: Review Your Finances and Mortgage Readiness

One of the most important steps in buying a house is preparing your finances. Mortgage lenders examine your credit, income, and debts closely.

What you should review:

Credit Score

Your credit score plays a big role in whether you can snag a loan. Some loan programs, like FHA, will work with scores as low as 500, but if you’re looking at conventional loans, you’ll typically need at least a 620. Boosting your credit score can land you better interest rates and deals. If you’re thinking about applying for something, it’s smart to focus on getting that score up first.

Debt-to-Income Ratio

Lenders assess your debt-to-income (DTI) ratio to ensure you have a manageable level of debt compared to your income. A stable income stream demonstrates your ability to repay the loan. At the same time, a lower DTI ratio indicates that you have sufficient income left over after covering monthly obligations. This ratio reflects your financial health and is crucial in the loan approval process.

Savings

Having enough savings is important when you apply for a mortgage. You need money for the down payment, closing costs, and extra funds for unexpected expenses. A good savings account can improve your chances of getting a loan and help you qualify for better loan terms.

Loan Programs

Different types of loans are available, each designed to meet specific needs. FHA, VA, USDA, and Conventional loans have unique eligibility requirements and benefits, like low or no down payment options. By comparing these loans, you can find the one that best suits your financial situation and homeownership goals.

Tip: Even if you’ve had credit issues, Gustan Cho Associates offers programs with no lender overlays—helping borrowers who were denied elsewhere.

Step 3: Get Pre-Approved for a Mortgage

Getting pre-approved is an important step when buying a house. It shows sellers you’re really interested in buying and helps you get a grip on your budget.

Documents needed for pre-approval:

Pay stubs (last 30 days)
W2s and tax returns (last 2 years)
Bank statements (last 60 days)
ID and Social Security card
Proof of additional income (child support, pensions, bonuses, etc.)

Why it matters: A solid pre-approval prevents last-minute loan denials and ensures you’re shopping within your price range.

Step 4: Hire a Real Estate Agent

Picking the right real estate agent is super important when buying a house. A good agent will help you explore neighborhoods, negotiate deals, and look out for your best interests.

What to look for:

Local knowledge of your target area.
Strong reviews and referrals.
Experience with first-time buyers, if it’s your first home.

At Gustan Cho Associates, we work with trusted real estate partners nationwide to connect you with agents who truly care.

Step 5: Start House Hunting

Now comes the exciting part—searching for your dream home!

Tips for this step in buying a house:

Use MLS listings, Zillow, and open houses to compare options.
Visit homes in person—pictures online can be misleading.
Consider location, schools, commute, and neighborhood safety.
Don’t rush—compare multiple homes before making a decision.

Step 6: Make Your Offer and Sign a Contract

Making an offer is one of the most strategic steps in buying a house.

Best practices:

Don’t “lowball” too much—it may get rejected outright.
Ask for seller concessions to help cover closing costs.
Include contingencies: appraisal, home inspection, and financing.
In attorney states, have your lawyer review the purchase contract.

Once accepted, your signed purchase agreement is sent to your lender for moving forward.

Step 7: Order a Home Inspection and Insurance

A home inspection is not required by lenders, but it’s one of the smartest steps in buying a house. It protects you from unexpected repair costs.

Inspection Cost: Typically, a home inspection is priced between $200 and $500, depending on the size and location of the home. This inspection is important because it helps buyers find any problems before they buy the home and ensures that buyers know the property’s condition.
Homeowners Insurance: Mortgage lenders need homeowners insurance to safeguard both the borrower and the lender. Buyers must show proof of insurance before closing on the property. This insurance helps cover possible damages and liabilities that come with owning a home.
Always shop around and compare quotes.

Step 8: Go Through Mortgage Underwriting

This step in buying a house can feel overwhelming. The lender’s underwriter reviews your file in detail to ensure you qualify.

What happens:

The loan processor collects updated documents.
Underwriter reviews your income, assets, credit, and contract.
Conditional loan approval is issued.
You submit any additional documents requested.
Final approval is granted once all conditions are met.

At Gustan Cho Associates, our streamlined process helps reduce delays and stress.

Step 9: Closing Day – Get the Keys to Your Home

Closing is the final and most rewarding step in buying a house.

The lender wires the money over to the title company.
You sign the final documents.
The seller gets paid, and you get your keys!

Congratulations! You’re officially a homeowner.

Comparison Table – Renting vs Buying

Factor	Renting	Buying a Home
Monthly Cost	Rent only	Mortgage + taxes + insurance
Flexibility	Easy to move	Commitment for 3–5 years+
Maintenance	Landlord responsibility	Homeowner responsibility
Building Wealth	No equity	Builds equity over time
Tax Benefits	None	Mortgage interest deductions

How One Family Completed the Steps in Buying a House

Meet John and Carla, a young couple in Florida who thought homeownership was out of reach. They had steady jobs but less-than-perfect credit and only a small down payment saved. After being turned down by two banks, they reached out to Gustan Cho Associates.

Challenge:

Credit scores in the low 580s.
Limited savings for down payment and reserves.
Needed guidance on the steps in buying a house from start to finish.

Solution:

Our loan officer reviewed their credit and explained how an FHA loan could work with their profile.
We issued a solid pre-approval after verifying income, credit, and bank statements.
Connected them with a local real estate agent who guided them through house hunting.
When they found a home, we helped structure the offer with seller concessions to reduce closing costs.
Our processing and underwriting team worked closely with John and Carla, ensuring conditions were met quickly.

Outcome:

John and Carla achieved a significant milestone within just 40 days when they received their clear-to-close notification. They successfully closed on their first home with a down payment of only 3.5%. Today, they take pride in being homeowners, focusing on building equity rather than continuing to pay rent.

John and Carla’s story shows that even with challenges, following the steps in buying a house with the right lender makes homeownership possible.

Why Trust Gustan Cho Associates?

Licensed in 50 states, including DC, Puerto Rico, and the U.S. Virgin Islands.
Known for no lender overlays—we approve loans that banks often deny.
Experts in FHA, VA, USDA, Jumbo, Conventional, and Non-QM loans.
Thousands of successful closings with happy homeowners.
Featured in major real estate and mortgage news platforms.

Frequently Asked Questions About the Steps in Buying a House:

Q: What is the First Step in Buying a House?

A: The first step in buying a house includes reviewing your finances, getting pre-approved for a mortgage, and hiring a real estate agent.

Q: How Much Money do I Need to Buy a House?

A: A lot of loan programs need you to put down some cash upfront, cover closing costs, and have some savings set aside. With FHA loans, you can get started with just 3.5% down, which makes buying a house a lot more budget-friendly.

Q: Do I Need Good Credit to Buy a House?

A: No, perfect credit is not required. Programs like FHA allow scores down to 500, so buying a house is possible even with less-than-perfect credit.

Q: Why is Pre-Approval Part of the Steps in Buying a House?

A: Getting pre-approved for a mortgage is helpful because it sets your budget and shows sellers that you mean business. It’s one of the key steps when you’re looking to buy a house.

Q: Is Hiring a Real Estate Agent Part of the Steps in Buying a House?

A: Yes. A good agent helps you find the right home, negotiate, and protect your interests throughout the buying process.

Q: Do I Need a Home Inspection During the Process?

A: While not required by lenders, a home inspection is highly recommended. It ensures your investment is safe and is a smart step in buying a house.

Q: How Long Does Buying a House Usually Take?

A: Buying a house typically takes 30–45 days, from pre-approval to closing, depending on your lender and contract terms.

Q: What Happens During Underwriting?

A: Underwriting is when the lender reviews your credit, income, and assets to approve your loan. It’s a critical step in buying a house.

Q: What is the Last Step in Buying a House?

A: Closing day is the last step in buying a house. That’s when you sign all the papers, the money gets transferred, and you finally get the keys to your new place.