Buyer information sheet
Buyer’s Key—From Planning to Closing
A successful purchase usually starts before the first showing. Use these steps to understand the process, the money involved, and the decisions you may need to make along the way.
The buyer’s path
1Set your real budgetDecide what monthly payment and total cash you are comfortable using—not just the maximum a lender may approve.
2Prepare financingTalk with a lender, compare loan options, understand your estimated rate, down payment, cash to close, and obtain a preapproval when appropriate.
3Define the searchChoose your preferred areas, price range, property type, must-haves, and where you are willing to compromise.
4Tour and evaluate homesChoose a real estate broker to assist you—someone who will tour with you and point out what is easy to miss. Look beyond appearance. Consider condition, location, resale factors, taxes, insurance, HOA costs, repairs, and how the home fits your long-term plans.
5Prepare the offerReview recent comparable sales and discuss price, due-diligence terms, earnest money, requested concessions, timing, and other terms that affect the strength and risk of the offer.
6Use due diligence wiselyComplete inspections and investigations, review disclosures and property information, address repair concerns, and keep financing moving on schedule.
7Appraisal & loan approvalYour lender completes underwriting and, when required, the appraisal. Avoid major credit changes or new debt before closing.
8Final review & closingReview your closing disclosure, verify funds needed, complete the final walk-through, sign closing documents, and receive possession according to the contract.
Numbers buyers should understand
Purchase priceThe agreed price of the property. It is not the same as your total cost of ownership.
Down paymentThe portion of the price you pay from your own funds. Loan programs may require different amounts.
Loan amountPurchase price minus down payment, before any financed fees or adjustments.
Principal & interestThe basic mortgage payment created by the loan amount, interest rate, and loan term.
Cash to closeYour down payment plus closing costs and prepaid items, adjusted for deposits, credits, and lender calculations.
Total monthly housing costMortgage principal and interest plus items such as property taxes, homeowners insurance, mortgage insurance, and HOA dues when applicable.
Debt-to-income ratio (DTI)A lender comparison of qualifying monthly debt payments to gross monthly income. Loan guidelines vary.
Loan-to-value (LTV)Loan amount divided by the property value used by the lender. A lower LTV generally means more buyer equity.
For instance—a $350,000 home
Purchase price$350,000
Example 20% down payment− $70,000
Example loan amount$280,000
Illustrative 30-year rate6.50%
Estimated principal & interestabout $1,770/mo
Important: this is an educational example, not a quote or loan estimate. Taxes, homeowners insurance, mortgage insurance, HOA dues, closing costs, prepaid items, due-diligence money, earnest money, lender fees, and the actual interest rate can change both the monthly payment and the cash needed to close.
Bottom line: Do not judge affordability by the purchase price alone. Ask: “What will I need up front, what will I pay each month, and will I still be comfortable after I own the home?”
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