To buy a house with a loan, follow these steps: 1) Check credit score and repair any issues; 2) Save for a down payment (3-20% of the purchase price) and closing costs (2-5% of the loan amount); 3) Get pre-approved for a mortgage to understand borrowing capacity; 4) Work with a real estate agent to find a property; 5) Make an offer and enter a purchase agreement; 6) Secure a mortgage through underwriting, which verifies income, assets, and debt; 7) Close the sale by transferring ownership and paying closing costs.

The process requires careful planning to ensure financial readiness and compliance with lending standards. A credit score below 580 often qualifies only for high-cost loans, while scores above 740 typically secure the best interest rates. For example, the Consumer Financial Protection Bureau (CFPB) reports that 90% of conventional loans require a score of 620 or higher. A 20% down payment eliminates private mortgage insurance (PMI), reducing long-term costs. Data from the Federal Housing Administration (FHA) shows that buyers with 10% down pay an average of $1,500 annually in PMI. Pre-approval increases offer competitiveness; the National Association of Realtors (NAR) notes that 80% of sellers prefer offers from pre-approved buyers. Closing costs average $5,000–$15,000, depending on location and loan type. A 2023 report by ClosingCorp found that 35% of buyers underestimates these expenses by $3,000–$7,000. Underwriting typically takes 30–45 days, with 60% of loans denied due to insufficient documentation or unstable income. Post-closing, timely payments maintain credit scores and avoid penalties like late fees (averaging $35–$50 per month). The U.S. Department of Housing and Urban Development (HUD) emphasizes that 50% of mortgage defaults stem from unaffordable loan terms or job loss.

This structured approach minimizes financial risk and ensures a smooth transaction. By prioritizing credit health, budgeting for hidden costs, and securing pre-approval, buyers position themselves for successful homeownership. LendingTree data reveals that buyers who follow these steps close on time 78% of the time, compared to 52% for those who skip steps. Ultimately, understanding the mortgage process empowers buyers to navigate complexities and achieve their housing goals efficiently.