Buying your first home is probably the biggest investment that you will ever make. It marks an important turning point in your life and can be the first step to a brighter future.

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Step One = Find your dream home

You did it! You found the home of your dreams and preliminarily determined that the total purchase price is affordable. (It is recommended that you sit down with a lender even before you start looking for your new home to determine how much home you can afford. This is usually a quick, free and painless exercise that can save you a lot of time and money. See also "How Much Can I Afford To Spend On a Home" section to see what the lender will be looking for.) You make a deposit and sign a Sales Contract signifying your intention to buy the home. Once the Seller accepts your Sales Contract an Escrow will be opened.

Step Two = Apply for a mortgage loan

Your next step is to obtain financing. Mortgage loans are available through savings banks, commercial banks, savings and loan institutions, mortgage bankers and some credit unions.

Most mortgage lenders will review four elements on a borrower's application:

• Monthly Income (income before taxes)
• Monthly Liabilities (auto loan, credit card, other)
• Employment
• Funds for the down payment (including closing costs)

The lender would also require funds from you to order a credit report and also to order an appraisal upon loan approval. This amount varies from lender to lender and typically is no more than $500.

Step Three = Loan Approval

The mortgage lender will verify the information on your application and if everything checks out and you fit their lending requirements they will issue you a Conditional Loan Approval subject to an appraisal being completed. This verification and issuance of loan approval is typically completed in 4 to 6 weeks from submitting your loan application.

The lender will then order an appraisal to determine the market value of your new home. When the appraisal report is complete and meets the terms of the sale and/or your circumstances the lender will issue you a Final Loan Approval.

Step Four = Closing

Escrow is an independent third party representing both the buyer and seller in the sale, and insures that all requirements are met. The following are examples of items escrow will coordinate:

• Title search - includes search for outstanding mortgages, liens, restrictions, easements and rightful owner of the property.
• Lender requirements - such as an appraisal, termite inspection, survey and homeowner's insurance policy.
• Required payments for closing - you will be required to bring certified funds to cover the down payment, prepaids and closing costs. Closing costs could include attorney fees, title insurance, points, recording fees, appraisal fees and surveys.
• Holding and distributing funds from you, the mortgage lender and other parties.

When all requirements are met, you are ready for closing. At closing, documents are signed and funds are exchanged. At this time, the closing statement and other closing papers will be explained in to you, in detail, by the escrow officer. In the following three to four weeks, escrow will file the necessary documents with the recording office and you should receive the following:

• Recorded deed
• Title insurance policies
• Mortgage documents