Introduction
Buying a first home in the United States is often described as a “single transaction,” but the process is better understood as a series of coordinated steps involving housing search, contract deadlines, lender documentation, appraisal and underwriting, title and settlement work, and final closing disclosures. For many first-time buyers, the complexity is not only the number of steps, but how quickly they can overlap and how much documentation is required in a short window.
National housing data suggests first-time buyers have faced meaningful affordability headwinds in recent years. The National Association of Realtors (NAR) reported that the first-time homebuyer share fell to a historic low of 21% (for the referenced period in its reporting), highlighting how challenging market conditions have been for new entrants.
This checklist is designed as a neutral, educational guide to common steps and documents in a U.S. home purchase. It is not advice, does not recommend actions, and does not replace guidance from licensed professionals or a lender.
1) Establish a Baseline Budget (Total Housing Cost, Not Just Mortgage)
What is commonly included in “total monthly housing cost” discussions (U.S. context):
- Principal and interest (mortgage payment)
- Property taxes (often escrowed)
- Homeowners insurance (often escrowed)
- Mortgage insurance (if applicable)
- HOA dues (if applicable)
- Utilities and recurring maintenance expectations
Public data shows why this broader view matters. Housing is the largest spending category for U.S. households, representing roughly one-third of total expenditures in typical consumer spending data (BLS consumer expenditure reporting is widely used for this concept). Even if a mortgage payment is fixed, other components can vary.
Useful mindset (educational framing): affordability discussions frequently focus on “payment sustainability” rather than home price alone because insurance, taxes, and other costs differ sharply by state and property type.
2) Learn the Difference Between “Shopping Range” and “Loan Process”
Many first-time buyers encounter these terms early:
- Prequalification (often an early estimate based on limited information)
- Preapproval (often a more formal review with documentation)
Terminology and rigor can vary by lender, so educational material typically emphasizes reviewing documents and timelines carefully rather than relying on informal numbers.
3) Understand Common Low-Down-Payment Pathways (Program Basics Only)
Down payments vary by household, loan type, and market conditions. NAR’s reported typical down payment for first-time buyers has been around 10% in its recent profile highlights.
Some widely known U.S. program structures include:
FHA (Federal Housing Administration-insured loans)
HUD notes that FHA down payments can be as low as 3.5% of the purchase price for eligible borrowers.
CFPB provides consumer education that also references FHA down payments as low as 3.5% and program characteristics.
VA home loans (for eligible Veterans/service members)
VA indicates that purchase loans can involve no down payment in many cases, and it also highlights the VA funding fee concept.
USDA Rural Development (eligible rural areas, program rules apply)
USDA’s Single Family Housing Guaranteed Loan Program describes 100% financing for eligible applicants in eligible rural areas.
Neutral note: Program eligibility and terms vary by lender, borrower qualifications, and applicable rules. This section is informational and not a recommendation to use any product.
4) Prepare a “Document Pack” Early (Commonly Requested Items)
While requirements vary, many lenders commonly request documentation such as:
- Government-issued ID
- Recent pay stubs and W-2s (or tax returns for self-employed borrowers)
- Bank statements showing funds for down payment/closing costs
- Documentation for large deposits (if applicable)
- Current housing payment history (lease or mortgage statement)
- Employment verification details
Having documents organized early can reduce delays later, since underwriting timelines often overlap with contract deadlines.
5) Choose Search Criteria Based on Needs, Not Demographics
A compliant home search framework focuses on property features and logistics (commute, budget range, property condition, school district data from neutral public sources if used carefully, etc.) and avoids any housing language that could be interpreted as steering based on protected characteristics.
Fair housing safe principle: Real estate decisions should be framed around objective property and location factors, not demographics.
6) Make an Offer (Offer Terms Vary Widely)
Offer structure varies by state and contract type. Many transactions include:
- Purchase price
- Financing terms (if any)
- Inspection period
- Earnest money/deposit (varies)
- Requested closing date
- Appraisal and financing contingencies (where used)
- Seller concessions (market-dependent)
This checklist does not recommend specific terms; it simply outlines common components.
7) Understand the “Loan Estimate” Timing (CFPB)
A core consumer protection document is the Loan Estimate. CFPB explains that lenders generally must provide a Loan Estimate within three business days of receiving a mortgage application.
The Loan Estimate is commonly used by consumers to compare:
- Interest rate and APR
- Estimated closing costs
- Prepaid items and escrow estimates
- Cash to close (estimated)
Educational note: Consumers commonly compare multiple Loan Estimates to understand differences in lender fees and points—without assuming the lowest rate automatically means the lowest total cost.
8) Appraisal and Underwriting (What Often Happens)
Typical steps after contract include:
- Appraisal ordered (for most financed purchases)
- Underwriting review (income, assets, credit, property)
- Requests for “conditions” (additional documentation)
- Title search and insurance coordination through settlement/title company
Outcomes depend on property valuation and borrower/lender criteria.
9) Plan for Closing Costs (What Public Data Shows)
Closing costs can be significant, and public data supports that they’ve risen in recent years.
CFPB reported that median “total loan costs” for home purchase loans in 2022 rose to $5,954 (up 22% from 2021), and a higher share of borrowers (50.2%) paid discount points in 2022, with a median points amount of $2,370.
Neutral interpretation: closing cost totals vary by lender, loan type, property location, and whether points are included. The purpose of citing these numbers is to show that closing costs are often material and not “small.”
10) Closing Disclosure Timing (CFPB)
CFPB states that consumers must receive the Closing Disclosure at least three business days before closing/consummation.
CFPB’s TRID compliance resources explain timing and when redisclosure may be required.
The Closing Disclosure is typically reviewed for:
- Final rate/APR and loan terms
- Total cash to close
- Escrow setup
- Fees compared to Loan Estimate
- Seller credits/adjustments
11) Final Walkthrough and Closing Day (High-Level)
Common final steps include:
- Final walkthrough (confirm condition and agreed repairs)
- Signing settlement documents
- Funding and recording timeline (varies by state and lender)
12) After Closing: Plan for Non-Mortgage Variability
Two volatility drivers in many U.S. markets:
- Property tax reassessments or escrow adjustments
- Homeowners insurance premium changes
Budgeting discussions often include maintaining liquidity for unexpected expenses. Federal Reserve SHED data has shown that 63% of adults said they would cover a $400 unexpected expense using cash or equivalent.
This statistic is not a recommendation—only an illustration that many households experience limited emergency flexibility, which can make housing cost variability more impactful.
Quick Checklist Summary (Educational)
- Budget baseline (total housing cost)
- Document pack prep
- Learn loan documents (Loan Estimate, Closing Disclosure)
- Understand program basics (FHA/VA/USDA) if relevant
- Offer → appraisal → underwriting → title → closing timeline awareness
- Plan for closing costs and non-mortgage cost variability
Author Information
Written by:
Asim Iftikhar — Real Estate Contributor, ACT Global Media
Editorial Disclosure
This article is provided for general informational purposes only and does not constitute real estate, mortgage, financial, tax, or legal advice.
Regulatory Notice
Information is based on publicly available U.S. sources. Program eligibility, fees, timelines, and requirements vary by lender, state, and individual circumstances
