Even before you start searching, you should determine how much you can afford. Typically, your total housing payment (including fees, taxes, and insurance) should not exceed 35% of your gross (pre-tax) income, but it’s recommended to stay closer to 25%.

Save up for a down payment

A big part of your mortgage will be determined based on how much you pay upfront in the form of a down payment.

Generally, the higher the down payment, the better the interest rate will be. If you decide to put down less than 20%, you’ll likely need to pay private mortgage insurance (PMI). Speak with your agent and lender to understand your options and determine the best down payment for you.

Don’t forget about closing costs

Closing costs are fees paid at closing and usually total 2%–5% of the final sale price. Read more about closing costs for buyers below, in Step 6.

Sellers are typically more willing to accept offers from pre-approved buyers, because it shows that the buyer has the financial resources available to make good on their offer.

Get quotes from multiple lenders and go with someone reliable. Read online reviews of each lender and consider their responsiveness, transparency, and estimated closing timeline. To get started, see which lenders Redfin clients recommend here, or ask a Redfin Agent who she or he trusts in your area.

Apply for pre-approval

Once you select a lender, apply for pre-approval. Your lender will check your credit and ask for all of your financial documents—tax returns, pay stubs, bank statements, credit card statements, student and auto loans, etc.—to accurately assess your financial situation.

Keep in mind that just because you’re pre-approved for a certain amount doesn’t mean you can actually afford that amount. Prepare your own monthly budget to figure out what you’ll be comfortable paying.

Even before you start searching, you should determine how much you can afford. Typically, your total housing payment (including fees, taxes, and insurance) should not exceed 35% of your gross (pre-tax) income, but it’s recommended to stay closer to 25%.

Save up for a down payment

A big part of your mortgage will be determined based on how much you pay upfront in the form of a down payment.

Generally, the higher the down payment, the better the interest rate will be. If you decide to put down less than 20%, you’ll likely need to pay private mortgage insurance (PMI). Speak with your agent and lender to understand your options and determine the best down payment for you.

Don’t forget about closing costs

Closing costs are fees paid at closing and usually total 2%–5% of the final sale price. Read more about closing costs for buyers below, in Step 6.