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Eight Homebuying Steps to Prepare For

Key topics to discuss with your mortgage professional. 

5 Min Read

The first time you enter a home you own is a special feeling. But before you can turn the key, make sure you connect with your loan officer for guidance about the homebuying process, including the parts that are sometimes given less attention. After all, it’s understandable to focus on your mortgage payment, which includes principal, interest, insurance and taxes. But it’s also important to remember these steps that are also part of buying a home and know that there may be options to help pay for them.

1.   Earnest money

Also known as a “good faith deposit.” This is money you need to put down once the seller accepts your offer to get the sellers to take the home off the market.

  • The amount needed for earnest money can vary, but it’s a good idea to prepare to spend an average of 1%–2% of the purchase price. The good news: It later gets rolled into your downpayment. Grants, assistance, and financing options are available. Talk it over with your mortgage loan officer.

2.   Home inspection

A certified home inspection can be a major money saver in the long run, uncovering issues to be resolved before you take ownership.

  • The U.S. Department of Housing says a typical inspection costs $300–$500, though it can run higher or lower depending on home size and region. It’s worth it, though, if you can negotiate with the seller to pay for repairs before you buy.

3.   Appraisal

An appraisal is a must for any mortgage—it allows the lender to confirm the value of the home.

  • Appraisals tend to have a maximum range of $350–$550 but be sure to connect with your loan officer to discuss your unique financial situation as there may be options available to pay for it.

4.   Downpayment

The minimum downpayment required for Federal Housing Administration (FHA) loans is 3.5% of the purchase price and, for first-time home buyers, the median downpayment is 7%. But downpayments vary depending on the type of loan and other factors. Your mortgage loan officer can help guide you to a downpayment amount that’s right for you. Ask about local assistance programs that may be able to help.

5.   First year of homeowners insurance

All mortgages require homeowners insurance, which can cover damage caused by fire, lightning strikes, hail, wind and theft, as well as liability for things that happen on your property. Once you’re in your new home, your insurance cost can be included in your mortgage payment. But generally, buyers are required to pay for the first year up front.

  • Your rate will vary depending on home size and region, as well as the level of coverage that you want.  

6.   Closing costs 

In addition to homeowners insurance, you should expect to pay closing costs, which can include application fees, attorney fees, title insurance, home warranty, escrow deposit, recording fees, condo and association fees, etc.

  • When you add it all up, your closing costs may require about 5%–6% of the purchase price, though it can vary by region. Your mortgage loan officer will let you know what to expect.

7. Moving costs

How much you spend on a move depends on many factors, such as how far you’re going and how much stuff you’ve got. If you do it yourself, don’t forget to budget for truck rental. If you hire pros, costs vary widely, depending on home size, storage needs and whether you or the movers are doing the packing.

  • Overall, the average price for professional movers on a local move is $1,250.

  • For a 1,000-mile move, the average is about $5,000. In all cases, it pays to get multiple estimates. One positive of professional movers is that they often provide insurance to cover you in case items are damaged along the way.

8.   Cosmetic changes

Buyers of existing homes often spend on small upgrades. This can range from paint, landscaping and flooring to remodeling kitchens or bathrooms, and from just a few dollars to thousands. Ideally, it’s best to consider these costs before purchasing and include them in your overall home-buying budget.


It’s important to note that the costs involved with buying a home and getting a mortgage can vary depending on a variety of factors, including the home’s cost and region. Fortunately, your mortgage professional is available for assistance and guidance at every step. 

Learn more about how M&T can help you reach your homeownership goals or contact an M&T mortgage professional at 1-888-253-0799.

Disclosure: This article is for informational purposes only and is neither a loan commitment nor a guarantee of any interest rate. If you choose to apply for a mortgage loan, you will need to complete our standard application. Our consideration for approval of your mortgage loan application will include verification of the information obtained in connection with your request, including but not limited to income, employment, asset, property value and/or credit information. Our loan programs are subject to change or discontinuation at any time without notice. Not all products are available in all states.