4. First things first:
Is it the right time to buy?
Renting vs owning
Length of ownership
Lifestyle priorities
Personal finances
Consider:
5. Your housing payment
should not exceed 35%
of your income.
Have your income and
monthly spending info handy
25% is recommended
Use our free online calculator
to get an estimate of your
monthly payment
REDFIN ADVANTAGE
Use our Home Affordability Calculator to
help determine your budget.
redfin.com/how-much-house-can-i-afford
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6. Accessibility and
response time are key
when finding a lender.
Lender reviews
Big banks vs. local lenders
Direct lender vs. brokerage
Referrals
Also consider:
REDFIN ADVANTAGE
Redfin Agents can recommend
a preferred lender in your area.
7. Basic Mortgage Terminology
The interest rate and term of the loan
are negotiated and set for the life of
the loan. The terms of fixed-rate
mortgages can range from 10 years
to 40 years.
Fixed-Rate Adjustable-Rate
The interest rate is fixed for an initial
period (usually 1, 3, or 5 years). After
that, the rate adjusts in set intervals
based on the market index.
Points
Points are fees paid to a lender up
front in exchange for a lower interest
rate on a loan. This is known as a
"buydown." Each point is equal to 1%
of the loan amount.
Origination Fee
Borrowers pay an origination fee to
the lender. This may include:
application fee, appraisal fee, fees for
all the follow-up work, and other
costs associated with the loan.
LTV is the ratio of a loan to the value of
the home being purchased. A typical
loan for an 80% LTV will require a 20%
down payment.
Loan-to-Value Ratio (LTV) Private Mortgage Insurance
(PMI)
When the loan amount is greater
than 80% of a home's value, the
borrower pays for PMI to guarantee
the lender is covered if the borrower
defaults.
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8. Pre-approval is required to write a strong offer!
Pre-Approval Type Description Offer Strength*
Pre-Qualification Auto-generated letter based on
stated income and assets
Low
Traditional Pre-Approval
Credit report
Income
Assets
Loan officer review
Medium
Underwritten Pre-Approval Credit report
Income
Assets
Underwriter review
High
*General rule of thumb: the more information you provide, the stronger the offer.
9. Get pre-approved before you start looking for
homes. This is what you’ll need:
Credit report
Credit score
Credit Rating & History Investments & Assets Residence History
2 months of statements
401(k) docs
Landlord information (2 years)
Mortgage documents (2 years)
Bank account information
Student loans
Credit card debt
Car loans
Total Debt Down Payment Work History
Proof of funds W-2 forms
Pay stubs
Tax return docs
10. Common Loan Products
Conventional Loans FHA Loans VA Loans
Loan Description
Credit Score
Rate Options
Down Payment
Conforming: Conform to Fannie
Mae and Freddie Mac
guidelines
Jumbo loans: Exceed
conforming limits
Require private mortgage
insurance (PMI)
Veteran benefit allowing low
down payment but no PMI
Good–Excellent
Fixed and Adjustable
As low as 5%–20%
Fair–Good Fair–Good
Fixed and Adjustable Fixed and Adjustable
As low as 0%As low as 3.5%
12. Understanding your
market can help you
make a winning
offer.
Your local market
trends
Median sale price
# of homes for sale
Days on market
Our market data is updated
every 5 minutes! A local Redfin
Agent can meet with you to
discuss current market trends.
REDFIN ADVANTAGE
13. Easily compare
neighborhoods on
Redfin.com.
Decide what's most important to you.
Walkability
Commute
School ratings
REDFIN ADVANTAGE
View tour and offer insights from Redfin
Agents for each listing and neighborhood.
14. The Redfin Estimate
Same-day tours
See home values with
the Redfin Estimate.
The most accurate estimate available
for homes on the market.
Request a tour instantly and see homes
on your schedule.
15. Same-day tours
Get inside fast:
book same-day tours.
The Redfin Estimate
The most accurate estimate available
for homes on the market.
Request a tour instantly and see homes
on your schedule.
16. See homes in person
and know what to look for.
Open houses
Home tours
Tour checklist
Location & noise level
Level floors & layout
Daylight
Storage space
17. Ask these important
questions to find the
right agent:
How many clients have
you helped this year?
How quickly can you get
me into a home?
How many sales have you
handled in my search area?
Can I see reviews from your
past clients?
Read client reviews of all Redfin
Agents on Redfin.com.
REDFIN ADVANTAGE
19. You found a home
you love. It’s time to
make an offer!
Your Redfin Agent will:
Set a price strategy
Discuss bidding war
situations
Review contingencies
20. Common Contingencies
The buyer must get approved for
a mortgage loan to be able to buy
the home.
Financing Contingency Inspection Contingency
This allows the buyer to get the home
inspected and negotiate further if there
are repair issues. The inspection usually
happens 5–7 business days after mutual
acceptance.
Sale Contingency
The success of the offer depends on
the sale of the buyer's current home.
Appraisal Contingency
The success of the offer depends on
an appraisal confirming a value for
the home that is equal to or greater
than the buyer's offer amount.
The success of the offer depends
on whether the home's title, which
documents the history of
ownership, is clear of any liens.
Title Contingency
21. The Closing Process
Deposit Earnest Money
Funds must be transferred within
two days after going mutual.
Mutual Acceptance
The seller has accepted your offer.
Now the closing process begins!
Execute Contingencies
Any contingencies written into
your offer will be completed
during this time.
Professional Appraisal
This is the bank’s proof that the home
is worth the purchase price and loan.
Final Loan Approval
Your finances have been
processed and approved!
Closing Costs
2%-5% of purchase price; includes lender fees,
title insurance, appraisal, inspection, etc.
Closing Day!
Get your keys, attend the closing,
and celebrate!
Typically takes 30 days
22. What’s next?
Fill out a strategy session card
to talk to a Redfin Agent about
your home search.
● Email or call directly –
take a business card
● Download our app and
start touring with Redfin
