When buying a house with a home loan, follow these steps: 1) Get a mortgage pre-approval to determine your budget and strengthen offers. 2) Save for a down payment (typically 20% to avoid private mortgage insurance) and closing costs (averaging $3,000–6,000). 3) Check and improve your credit score ( aim for 620+ to secure competitive rates). 4) Compare lenders for the best interest rates and terms. 5) Review loan estimates to understand monthly payments, including taxes and insurance. 6) Consider long-term costs like maintenance and property taxes.

Pre-approval is critical because it streamlines the buying process and shows sellers you’re a serious buyer. Lenders like Fannie Mae recommend a 20% down payment to minimize costs, but options like FHA loans allow 3.5% down. Closing costs, which cover fees for appraisals, inspections, and title searches, average $5,000–8,000 nationally, per data from the U.S. Department of Housing and Urban Development (HUD). A higher credit score directly lowers interest rates; for example, someone with a 740+ score might secure a 30-year fixed loan at 6.5%, while a 620 score could result in 7.5%, saving $100+ monthly on a $300,000 loan. Shopping around is essential—Freddie Mac reports 2023 average rates vary by 0.5–1% between lenders. Private mortgage insurance (PMI) costs ~0.5–1% of the loan amount annually, avoiding this with a 20% down payment saves hundreds yearly. Long-term costs like property taxes (1–2% of home value) and maintenance (0.5–1% annually) are often overlooked but can exceed $10,000 over five years for a $300,000 home. Proper planning ensures affordability and avoids financial strain.