A realtor's hand giving keys to a new home owner

For many people, just the thought of owning their very own is a dream come true. When you decide to purchase a home, you are making a substantial investment that has the ability to build equity over time. While purchasing a home can be exciting, it can also become overwhelming fairly quickly.

To help ease some of the confusion you may have, here is a quick guide that will tell you everything you need to know about buying a house.

Understanding What it Means to Buy a House

The idea of getting to say goodbye to your landlord and living in a home where you get to paint the walls any color you want may seem nice, but that shouldn't be the reason why you have decided to buy a home. When you purchase a home, you may not have to ask the landlord if you can hang a picture on the wall, but you also won't be able to call them to fix your water heater either.

Every house requires some regular maintenance. There will come a time when you may need to repair the roof or replace the stove, and you will now be the one required to cover the costs. Sure, your homeowners' insurance may pay for some of the repairs to your home, but that is only if you are current on your monthly insurance payments, and even then, there are several things that homeowner's insurance companies won't cover.

Before purchasing a home, you need to understand that there may sometimes be unexpected costs that sneak up on you without warning. You need to decide whether or not you are prepared to pay for those costs. This is why it is always good to keep some money stashed away for emergencies.

Determine How Much House You Can Afford

As we just mentioned, there can be many costs associated with owning a home. In addition to homeowner's insurance and possible repair costs, you will also have to pay property taxes on the home, interest on your loan, and private mortgage insurance (PMI). Also, depending on what neighborhood you live in, you may have homeowners association fees as well. You need to take all of these costs into account when deciding what home you can afford.

When deciding which house would be in your budget, you need to add your potential mortgage payment with all of the other costs that were just discussed. After you have added all of the costs together, you need to ensure that your monthly payments will not exceed the amount of income you make each month. In fact, it is recommended that your home (and your home-associated costs) is no more than 28% of your gross monthly income. This will help to ensure that you have money left over each month for other expenses.

Prepare a Down Payment

Before jumping right in and trying to buy a house, you need to save for a down payment. There are several reasons why having a large down payment on a home is in your best interest. For example, depending on your credit score, a larger down payment could help you get approved for a loan. Also, the bigger the down payment, the lower your monthly mortgage payments are likely to be.

How Much Money Should You Save for Your New Home?

When buying a new home, you will need to save enough money to cover the initial costs. This will include:

  • Moving Expenses
  • Down Payment
  • Closing Costs and Other Fees

When you are moving into a new home, you will need to set aside some money if you plan on hiring movers or if you need to rent a moving truck. The cost of moving expenses will depend on a number of factors. If you plan to buy a home close to where you already live, it will generally be less expensive than if you moved far away.

When considering how much you need for a down payment, look at the price of the home and figure out how much 15% of the total price would be. That is how much you need to save for a down payment. Again, it will be better for you in the long run to pay a large down payment. So, if you can save until you have 20% or 25%, that would be even better.

Understanding Mortgage Approval 

If you don't have enough money saved to pay for the home in full, you will need to apply for a home loan, otherwise known as a mortgage.

Which Mortgage Option is Best for You?

Depending on your credit score, your income, and other criteria, you could qualify for a large range of mortgages. Some of the most popular types of mortgages include:

  • Adjustable-Rate Mortgage – The interest rate on the loan will adjust periodically.
  • Fixed-Rate Mortgage – The interest rate stays the same for the entire length of the loan.
  • Conventional Mortgage – The loan is backed by private lenders and is not insured by any government entity.
  • Balloon Mortgage – You start out making monthly interest payments for a period of time. Once you have reached the predetermined date, you will pay the remainder of the principal in one lump sum.

Every loan option has its advantages and disadvantages. It is best to talk with a financial advisor to determine which mortgage would be best for you.

Find the Right Real Estate Agent

While there are many resources to help you find a new home online, nothing is better than getting advice directly from an expert. When you work with an experienced and knowledgeable real estate agent, you will get specialized advice that you can't find on the internet. You may also be able to find out about houses that are put on the market before the general public.

Find Your New Home

When you go house hunting, it is important for you to have a list of everything that you hope to find in your new home. Here are some questions that you can ask yourself to determine what is most important to you.

  • How many bedrooms do I need?
  • How many bathrooms do I need?
  • Is the school district important?
  • Do I want a big yard?
  • Do I need a garage for my car?

If you find a home that only fits a few of your needs, don't feel like you have to settle. There is nothing wrong with shopping around for your dream home.

Make an Offer on a House

Once you have found a house that you like, your agent will submit an offer on your behalf. You may not be the only potential buyer that makes an offer on the home, so you may end up in a bidding war with other potential buyers.

If your offer is accepted, you will have a purchase agreement that you will have to sign. This is a document that will include information about the home as well as list any contingencies that there are upon purchase.

Get a Home Inspection and Appraisal

Once your offer is accepted and you sign a purchase agreement, you are officially under contract for your new home. This means that you will need to have an inspection performed by a certified inspector. The inspector will check for things like structural damage, electrical problems, and other issues with the home.

You will also need to get an appraisal on the home if you are applying for a loan. No lender will approve a loan until they know the value of the house that you want to buy.


Before you can close on your home, your mortgage lender will have to review every detail of your case before they can approve your loan. This may take a few weeks to do. Try to be patient during this part. Also, while you are waiting, do your best to ensure that our financial situation does not change. This means that you shouldn't lease a new car, change jobs, or do anything else that could change your financial status. If you do, you may get denied the loan.

Close on Your New House

All of your hard work and patience have paid off, and closing day is finally here! When you close on a home, you will be asked to sign several documents. Some of the wording may be confusing, so don't be afraid to ask your agent if you have any questions. This part can be confusing for many people, and your agent is there to help you. Once everything is signed, you will be given the keys to your new home and will officially be a homeowner!

Find Your Dream Home in North Carolina Today!

Buying a new home can be a fun and rewarding experience. When you choose to buy a home, you are investing in your future. 

If you are looking for your new dream home, check out a wide range of beautiful homes on our website today. At Chatham Homes Realty, we have a team of experienced professionals that has access to some of the most gorgeous homes in the area. We are also more than happy to answer any questions you may have and walk you through the entire home-buying process.

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