How to Buy a House in 2026

1. Determine if Buying a House Makes Sense for You

Whether you're a first-time homebuyer or you've done this before, you'll want to assess your financial situation to decide if now is the right time to buy. That might be the case if:

• You have an emergency fund. The rule of thumb is to set aside three to six months' worth of basic expenses. That could help you get through your next financial emergency, whether it be a stretch of unemployment or a surprise bill. Homeownership comes with unexpected costs, so it's wise to build up this safety net before buying a home.
• Your down payment is ready. Unless you're making a cash offer, you'll need a sufficient down payment and enough cash on hand to cover closing costs. Moving expenses can also add up. If you aren't prepared, these costs could deplete your emergency fund.
• Your credit is in good shape. Minimum credit score requirements vary depending on the type of mortgage you're seeking. That said, lenders typically require a credit score of at least 620 to qualify for a conventional mortgage.
• Your budget can handle your new housing payment. After finalizing the sale, you'll be responsible for your mortgage, homeowners insurance and property taxes. You'll also have to cover regular maintenance costs and any repairs that pop up. One guideline is to budget 1% to 4% of your home's value for a maintenance fund.

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2. Calculate How Much Home You Can Afford

Consider the maximum amount you can realistically spend on your mortgage payment. The general rule is to keep your housing costs at or below 28% of your gross monthly income. So if you earn $10,000 per month before taxes, your ideal monthly housing costs wouldn't exceed $2,800.

These costs include your mortgage payment as well as your property taxes, homeowners insurance and mortgage insurance. Mortgage lenders often collect these costs in installments each month and hold them in an escrow account. Homeowners may also choose to pay them on their own.

When these bills come due, the lender will pay them on your behalf. You may also be on the hook for homeowners association (HOA) fees if you live in an HOA neighborhood.

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3. Save for a Down Payment

Making a 20% down payment can help reduce the amount you have to borrow and allow you to avoid private mortgage insurance—but it could amount to a huge expense. A 20% down payment on a $420,000 home works out to $84,000. The good news is that it may be possible to get into a home with much less.

No matter how much you put down, here are some simple tips for saving your down payment:

• Set a savings target. Review your budget and determine how much to save each month—then automate your savings.
• Earn interest on your savings. Consider a high-yield savings account, or a certificate of deposit (CD) if the term aligns with your timeline (pulling money out of a CD early usually triggers a fee).
• Leverage cash windfalls. That can include cash gifts, tax refunds and work bonuses.
• Look into down payment assistance programs. Availability and eligibility vary, but do your research to see what down payment programs are available in your state.

4. Don't Forget About Closing Costs

As the homebuyer, you can expect to pay closing costs when finalizing the sale. They typically range from 2% to 5% of the sale price, but it may be possible to reduce your closing costs by negotiating lower fees. Closing costs typically include:

• Lender fees: That can include loan origination fees and any money you're putting toward discount points, which are optional fees that reduce your interest rate.
• Fees from third-party service providers: You'll likely have to pay for a home inspection, home appraisal, title search services and title insurance premiums. You might also be responsible for real estate attorney fees.
• Prepayments: Your mortgage lender will likely require you to prepay a portion of your homeowners insurance premium and annual property tax bill. You might have to do the same for mortgage insurance. Again, these funds will be held in an escrow account.

5. Prepare Your Credit

Mortgage lenders want reassurance that you'll repay your home loan as promised. A lower credit score could suggest that you're a risky borrower, which may lead to a higher interest rate—or getting declined for a mortgage altogether. Every lender is different, but minimum credit score requirements often vary by loan type.

While it's possible to buy a house with bad credit, taking steps to improve your credit score can help you secure a better mortgage rate.

• Check your credit report. This can show you where your credit stands and help you spot potential fraud. You can check your credit report and FICO^® Score^Θ for free from Experian. You can also get your credit reports from all three consumer credit bureaus (Experian, TransUnion and Equifax) at AnnualCreditReport.com.
• Pay your bills on time. Your payment history makes up 35% of your FICO^® Score—the most significant individual factor. One of the best ways to improve your credit score is to consistently make on-time payments.
• Reduce your debt. Amounts owed account for another 30% of your FICO^® Score. Reducing this amount can show lenders you have the financial means to cover your mortgage payments. It can also increase your credit score.
• Don't apply for new credit. New credit applications trigger a hard inquiry on your credit report that can cause a small, temporary dip in your score. It's also wise to avoid adding new debt during the mortgage application process since most lenders require a debt-to-income ratio (DTI) that's below 43%.
• Don't close old credit cards. If you carry a balance on your other cards, those accounts will take up a larger percentage of your total available credit if you close other credit cards. That can have a negative impact on your credit score.

6. Get Preapproved for a Mortgage

When you get preapproved for a mortgage, the lender should provide a preapproval letter that shows your expected loan amount, mortgage type and interest rate. That can help you narrow down your options when house hunting and make an offer you can afford. Most preapproval letters are good for 90 days.

The preapproval process is similar to applying for a mortgage. To determine the terms of your preapproval, the lender will likely do a credit check (typically resulting in a hard inquiry) and review your:

• Income and assets
• Debts and expenses
• Down payment amount

Preapproval is different from prequalification, which involves a more basic review of your creditworthiness. Lenders typically do this through a soft credit pull, which does not affect your credit. Either way, you'll still need to complete a mortgage application before receiving funding.

7. Find an Experienced Real Estate Agent

The right real estate agent should understand your local market, what you're looking for in a home and your budget. They can sort through listings and recommend available homes. They can also schedule home tours, put in an offer when you're ready and negotiate on your behalf. A real estate agent can also be a great resource at the closing table—handling paperwork, answering your questions and ensuring that everything is in order.

While it used to be standard for the seller to cover real estate agent fees, recent changes may now put that burden on the buyer. But you can always negotiate to see if the seller is open to paying any of these costs. The average commission for the buyer's agent is 2.75%, according to Clever Real Estate data.

8. Look for a Home

When you're ready to start house hunting, it's important to clarify what you're looking for in a home. That includes:

• The type of home you want: You might be looking for a certain number of bedrooms or a home that's in a specific part of town or school district. Or you may want to avoid HOA fees or high property taxes. Be as clear as you can with your real estate agent. This can help them weed out listings and prevent you from wasting time looking at homes that don't meet your criteria.
• Your budget: Being preapproved for a certain amount doesn't mean you have to borrow that much. Set your ideal price point with your agent—and let them know how high of an offer you're willing to make.

Review the listings your agent sends you, and schedule tours for homes that pique your interest. You can also attend open houses on your own if you come across available homes that stand out to you.

9. Make an Offer

The next step on the road to homeownership is making an offer. Your real estate agent should know what similar homes are going for in your market—and they can use that to help you craft an attractive offer. Whether your offer is accepted depends partly on whether it's a buyer's market or seller's market.

• Buyer's market: This is when home sales are down and there are more available homes than there are buyers. That lack of demand can give you a leg up when buying a home because competition isn't as fierce. Home prices also tend to be lower.
• Seller's market: This happens when inventory is low, homes are selling fast and prices are on the rise. You may have to make a more competitive offer to set you apart from other buyers.

Be prepared for some back-and-forth after putting in an offer. Decide beforehand how much you're willing and able to spend, and let your real estate agent negotiate on your behalf.

10. Arrange a Home Inspection

If your offer is accepted, you'll want to arrange a home inspection to ensure that the property is up to your standards. A licensed professional will walk through the home looking for material defects and safety risks, which could affect the home's value. They'll likely inspect the home's:

• Major systems, like the heating and air conditioning, plumbing and electricity
• Foundation and structural components
• Roof
• Walls, doors and windows

If they find any serious issues, you may choose to negotiate a lower price—or back out of the deal altogether, which you can do if you have a home inspection contingency in your contract.

11. Negotiate Repairs

A 2024 Clever Real Estate report found that 82% of recent buyers have regrets. If your inspection comes back with red flags, like the need for costly repairs, you'll have to decide if it's worth the time and energy to fix them. One option is to negotiate a lower sale price, leaving you with more money left over to make repairs. Alternatively, you could request that the seller make the repairs before moving forward.

According to Redfin, some of the most common home inspection issues include the following:

Source: Redfin

12. Get a Home Appraisal

You can expect your mortgage lender to require a home appraisal, which determines the home's market value. If the appraisal is less than your offer price, you won't be approved for the full mortgage amount—even if you qualify for it. You'll have a few options in this situation:

• Come up with extra cash to cover the difference.
• Negotiate a lower price with the seller.
• Walk away from the deal, which you can do if you have an appraisal contingency in your contract.
• Hire your own appraiser to challenge the original findings. Some states allow this, but if competition is high, the seller might simply go with another buyer who's ready to close the deal.

13. Do a Final Walk-Through

You and your real estate agent can take one last look at each room, including any problem areas you've been concerned about along the way. For example:

• Did the seller make any repairs they agreed to make?
• Do all the appliances work?
• Are there any new issues you're noticing now?

There's still time to revisit negotiations—or possibly pull out of the deal. Keep in mind that walking away from the sale might result in losing your earnest money deposit. This is a good faith deposit sellers typically make early on to show the seller they're committed to the deal. It usually ranges from 1% to 3% of the offer price and goes toward your down payment if the sale goes through as planned.

14. Close on Your Mortgage

After receiving final approval for your mortgage, it's time to complete the transaction. You'll need to bring the following to the closing table:

• Proof of identity
• The rest of your down payment, which is typically paid with a wire transfer or cashier's check
• Proof of homeowners insurance

At this point, you'll sign all the required documents. This usually involves your real estate agent, title insurance company, escrow company and attorney (if you're using one). In some states, all parties come together to sign the documents at the same time. In others, the closing could take longer as each signature is collected. When it's all done, you'll become responsible for your home loan—and will officially be a homeowner.

Frequently Asked Questions

The Bottom Line

Depending on your goals and financial situation, buying a home might be something you pursue in 2026. Being prepared, partnering with the right real estate agent and maintaining strong credit can make for a smoother experience. If all goes well, you'll receive the keys to a home you love.