September 5, 2025
You're Ready to Buy a House: Getting Started
If you’ve boosted your credit score, paid down debt and saved for your down payment, congratulations! You’re ready to jump into the nuts-and-bolts of buying your first home.
If you haven’t done that yet, check out Preparing Financially for Your First Home for tips on how to get financially prepared.
Buying a home is one of the biggest financial decisions you’ll ever make, and understanding each step in the process can help you feel confident instead of stressed.
- Understand the costs
Before you start scrolling through listings, get familiar with the key expenses:
• Down payment – the upfront cash you put toward your home. Depending on the loan, this can range from 3%-20% of the purchase price. For example, on a $400,000 home, that could mean anywhere from $12,000 to $80,000.
• Closing costs – the fees associated with finalizing a real estate transaction, such as loan origination fees, title insurance, escrow fees, appraisal fee or attorney fees. This amount is typically between 2%-5% of the purchase price. Think of it as the paperwork and processing cost of turning “pending” into “yours.”
• Taxes & insurance – ongoing costs you’ll pay either directly or as part of your monthly mortgage payment. Since these two things often go up each year, it’s important to keep in mind that your monthly payments may increase, as well.
Pro tip: Don’t forget to budget for moving costs, new furniture, or little fixes that your home may need right away.
- Get organized
House hunting is exciting, but it’s easy to get distracted by shiny features. A simple “must-have vs nice-to-have" list can help you stay focused, narrow down your search and align your purchase with your priorities. For example:
• Must-have: 3 bedrooms for the kids
• Nice-to-have: a big backyard for summer cookouts
At the same time, you should start organizing your financial paperwork. Lenders typically ask for:
• 2 years of tax returns
• 2 months of bank statements
• Paystubs
• Information about other income or retirement accounts
Keeping everything in one folder (digital or physical) makes the mortgage process much smoother.
- Find a real estate agent
Think of your agent as your coach in the home-buying process. They negotiate on your behalf, answer questions and guide you through each step. When choosing an agent, look for someone who knows the specific towns and neighborhoods you’re looking at. You can ask your friends and family for referrals, and discuss their experiences of what worked and what didn’t during their home buying process.
Good starter questions when interviewing a real estate agent could include the following:
• How long have you been in real estate?
• What’s your communication style?
• How do you handle negotiations?
• How will you be compensated or what are you charging?
• What sets you apart from other agents?
Remember, don’t feel rushed; this is a major financial decision. Pick someone you trust and feel comfortable with – it makes the journey a lot smoother.
- Find a lender
Make sure your lender is someone you feel confident will help guide you through the financing process. Your agent can usually recommend lenders they’ve worked with (and by law, they are not allowed to receive a kickback for doing so). Having a team that already communicates well can be a huge plus, as they may respond more swiftly.
One of your first steps with a lender should be getting preapproved prior to starting the “shopping” process. This letter gives you a clear idea of what you can afford, and also makes your offer more appealing to sellers, which could avoid you missing out on your dream home.
But here’s the key: a lender tells you what they’re willing to lend to you, but it’s up to you to decide what you’re comfortable paying and what amount fits comfortably in your budget.
At Cape Cod 5, we're here to help you during every step of the home financing process. Reach out to us, we're here to help.
