Most big purchases are made in phases, and the first is always the hunt. Looking for a new home can take a bit, and even with a carefully planned budget, searching for a new home can take some time, and it's easy to become overwhelmed.
Thankfully, while looking for a home and buying it can be a lengthy process, it's not actually as complex as it seems, and guides like this one will go a long way to helping you put a plan in place so you can start your house hunting journey with a clear goal in mind.
Creating A Timeline
Your timeline might vary, but generally, it should look like this:
Set your budget: Look at your income and savings, check your credit score, calculate your debt-to-income ratio, and use a mortgage calculator to see what you can afford.
Pick your location: Search your prospective towns or cities, see what the rates in the area look like, and tour some of the homes to see if they have the features you're looking for. If you plan to move out of state, check the new state's tax laws to see if it will affect your budget.
Get pre-approved: Getting pre-approved for a loan will help builders and/or agents see that you're serious about buying a home.
House-hunting: This can be done online or in person. See what amenities and features are within your budget and visit the homes to get a feel for the environment. If you're looking at a hot market, it's not unusual for homes to get multiple offers, so make sure you do your homework and have a checklist.
Make an offer: Once you've found your ideal home, it's time to make an offer. Go into the conversation ready to negotiate.
Mortgage and insurance: Once you've locked in a purchase contract with the seller, you'll be ready to get your mortgage. The lender will sometimes ask that you get home insurance before finalizing the mortgage.
Inspection and appraisal: A formal inspection makes sure that the house is up to code, and eases concerns you might have about the condition of the home. An appraisal gives you an unbiased account of the home's value and like the inspection; this will result in a report with detailed information on the home.
Negotiation and closing: Market conditions might have an effect on your negotiations; for example, in a buyer's market, you might have more room to negotiate down, while in a seller's market, the seller might be less flexible due to multiple offers.
Either way, be professional and come with a counteroffer in mind. Once you're closed, you'll receive the keys to your new home, and you'll officially be a homeowner.
Understanding Financing Options
One of the first steps in house hunting is understanding financing options. Knowing what you can afford, the types of mortgages available to you, and how they differ is going to be important for helping you establish your budget and your timeline.
You'll probably see the words "home loan" and "mortgage" used interchangeably. While a mortgage is a type of loan, it's specifically used for home financing.
Mortgages are also affected by factors such as your income, existing debt, debt-to-income ratio, and your credit score. The average cost of a home in the U.S. was around $500,000 in the beginning of 2025, according to the U.S. Census.
There are budget and mortgage calculators online that can help you determine what's within your budget and what kind of mortgage you'll need to afford what you're looking for.
How Credit Scores Factor In
Your credit score plays a crucial role in determining whether you get approved for a mortgage and at what interest rate.
There are five factors involved in calculating credit scores: your payment history, the amount you owe, the length of your credit history, new credit, and credit mix, which refers to the type of credit you use.
For conventional loans, the minimum credit score you need to buy a home is going to be 620, according to Yahoo Finance. Typically, a higher credit score means a lower interest rate, which means lower payments.
The better your credit, the better your options will be, and the quicker you'll be able to pay off your mortgage. To learn more about credit scores and how to manage yours, see this guide.
Different Loan Options
Different loan options cater to various financial situations and needs, and home loans are typically encompassed by the following: conventional loans, jumbo loans, FHA loans, VA loans, and USDA loans.
Conventional loans are your run-of-the-mill, normal mortgage loans, and usually require the 620 minimum credit score and a 3 percent down payment, but a better credit score can potentially get you approved quicker and with a better interest rate.
Jumbo loans are similar to conventional loans, but for homes pushing seven figures. Lenders who offer jumbo loans will typically want a credit score in the 700s.
FHA (Federal Housing Administration) loans are, as the name implies, given out by the federal government, and they're designed to give people with lower credit scores, usually 500-590, financial assistance with purchasing a home.
VA loans are for veterans, active military, and sometimes surviving spouses. The Department of Veteran Affairs backs these loans, and while they don't require a minimum credit score, they also aren't the ones who issue the loans. Some lenders are authorized to issue VA loans, and those lenders may have a credit score requirement.
Lastly, there are USDA loans, which are handled by the U.S. Department of Agriculture. These loans are given to buyers in certain rural areas, and don't have a down payment requirement.
USDA loans are also typically granted by authorized lenders, but the government can issue loans to people below a certain income threshold. Depending on your home's location and your financial situation, you'll have a few different options on the table to help you secure your home.
There are two other terms you should know when it comes to mortgages: fixed-rate and adjustable-rate mortgages.
Fixed rate mortgages mean you pay the same amount of interest over the entire life of a mortgage, while adjustable-rate mortgages, or ARMs, start at an amount and may increase over time, though they usually start at a fixed rate for a specific period of time.
According to the U.S. Department of Housing and Urban Development, ARMs usually start at a lower interest rate than fixed-rate mortgages, and can be a good option if you only plan to live in your house for a few years, you expect a significant increase in your earnings, or if the interest rate on a fixed-rate mortgage isn't within your budget.
Either way, you usually have a few different repayment terms, usually 10, 15, or 20 years. The most common term is 30 years.
Working With Builders On New Construction
New construction homes are, generally speaking, a pretty solid investment. If you're buying a new construction home, you'll be working with the builder.
Do your research: make sure you know what the builder's homes cost, if they specialize in certain features, where their builds are located. Make sure you familiarize yourself with the construction process, and stay flexible when looking at floor plans and features you want.
Above all, be clear, polite, professional, and listen to the builder's advice and guidance. You can learn more with our first-time homebuyers' guide to buying a new home.
Upgrades and Incentives
Buying a newly constructed home has its unique advantages, such as modern amenities, energy efficiency, and customization options.
Before signing a contract with a builder, ask what features and amenities are included in the base price, what the upgrade options are, and what the timeline for completion is. In the U.S., newly built homes can take 7-14 months from start to finish, depending on location, materials, and conditions.
Many builders offer incentives and upgrades to attract new buyers, and it's not a bad idea to investigate them to see if they can benefit you. Some incentives can help with closing costs and down payments on new homes, while others offer discounts on certain features, which can help you save money.
House hunting can be daunting, but there are plenty of ways to prepare for it. Take things one step at a time, do your research, make your checklists, and you’ll find that the process can go from stressful to manageable. Enjoy the fun parts, like touring homes, and be patient for the more tedious ones, like getting your loans. Follow these steps and you’ll have the keys to your new home in your hand before you know it.
To learn more about the home-buying process and new homes, visit newhomesource.com/learn.
James Klingele
James Klingele holds a Bachelor of Science in Digital Media Innovation from Texas State University. He is a digital media specialist and content creator with a passion for storytelling in both print and digital formats. His work has included covering high-profile events like SXSW, where he contributed to content creation for global audiences. He has been a content specialist for NewHomeSource since 2024.