Step-By-Step Guide for First-Time Home Buyers

Everything's easier when you break it down into steps. Purchasing a home is no different. There are the fun parts: attending open houses, fantasizing about life in your new residence and calling the moving truck.

And then there are the not-so-fun parts: crunching the numbers, filling out applications and deciphering the home inspection report. This timeline will assist you with all of the parts, whether they're fun or not.

STEP 1: Evaluate your life and finances

Before you even look at homes, take a good look at your situation and crunch the numbers to see if this is the right time for you to buy.

Owning a home is like any major commitment. You need to be mentally and financially ready for it. What stage of life are you in? Are you financially stable? Do you move around a lot? Before you even look at homes, take a good look at your situation and crunch the numbers to see if this is the right time for you to buy.

• Calculate a monthly mortgage payment you can afford.

• Create a budget for monthly homeowner expenses.

• Check your credit report and improve your credit score.

STEP 2: Do your homework

Prepare to do more research and evaluation. It may seem tedious now, but this discipline will serve you well as a homeowner.

Prepare to do more research and evaluation. It may seem tedious now, but this discipline will serve you well as a homeowner. Learn about your prospective new neighborhood if you don't live there already, and prepare for the loan process by determining where your down payment and closing costs will come from.

• Research the market where you want to buy.

• Figure out how you will get a down payment and pay closing costs.

• Using your budget, determine how much home you can afford.

• Learn your rights as a homebuyer and borrower.

STEP 3: Shop for a loan

You'll be borrowing tens of thousands of dollars, so shop for the best interest rates and loan terms.

You'll be borrowing tens of thousands of dollars, so shop for the best interest rates and loan terms. Buying a home involves more than the sales price; there are fees for every part of the process. Make sure you understand everything you're paying for.

• Learn the basics about your mortgage options.

• Shop for the best mortgage rate and loan terms.

• Get pre-approved.

• Figure out the impact on your taxes.

STEP 4: Find a house

It's time to go house hunting! Save the gas money and do some research online first.

It's time to go house hunting! Save the gas money and do some research online first. Read about different neighborhoods, and browse listings. Then get a buyer's agent to set up home tours and guide you through the process.

• Choose a neighborhood and type of house.

• See what's available online.

• Shop for a real estate agent.

• Narrow down your choices and see the houses again.

• Calculate the home's market value.

• Make an offer.

STEP 5: Sign the contract

Unless you made a low-ball offer that offended the seller, expect to negotiate. The key is to find terms you both can agree on.

Unless you made a low-ball offer that offended the seller, expect to negotiate. The key is to find terms you both can agree on. Put them in writing, sign the contract and the closing process begins.

• Finalize the purchase and sale contract.

• Shop for the best mortgage rate and loan terms.

• Choose a title company that will research the title and coordinate the closing.

STEP 6: Close the deal

If all goes well, you'll sign the paperwork and the keys are yours!

During the closing period, you'll get an appraisal, title search and exam, home inspection and homeowners insurance. If all goes well, you'll sign the paperwork and the keys are yours!

• Get an appraisal and a home inspection.

• Get homeowner's insurance quotes and pay the premium.

• Consider and plan any improvement projects that require immediate attention after you move in.

• Do a final walk-through of the house.

• Plan your big move.