Welcome, and thanks for coming out tonight. I am Dominic George with Rockway Mortgage, right here in Rocky River. This is about thirty minutes, in plain English, and it is a class, not a sales pitch. By the end you will understand the whole path from thinking about buying to holding your keys, and you will know enough to feel in control instead of overwhelmed. Stop me and ask questions any time, that is exactly what this is for.
Here is the mindset shift I want you to leave with. When you rent, you are already making a mortgage payment, it just happens to be your landlord's. Equity is the part of the home you actually own, the price minus what you still owe the bank, and every month you own, that number grows. Renting is not throwing money away, but it builds someone else's wealth instead of yours. Owning has real costs too, repairs, taxes, upkeep, and I will always be honest about that, but the payment becomes savings you get to keep.
This is the entire class on one slide. Seven steps, in order, the same way every single time. It looks like a lot, but almost all the stress in buying a home comes from not knowing what happens next, and now you will. We start by getting you pre-approved so you know your budget, and we end at the closing table with keys in your hand. I will walk you through each step tonight, and when you work with us, we do this right beside you the whole way.
Before you look at a single house, get pre-approved. A pre-approval means a lender has actually verified your income, your savings, and your credit, so you know exactly what you can spend, and so does the seller. This is very different from a quick prequalification, which is really just a guess based on what you told them over the phone. A fully documented pre-approval makes your offer far stronger, because the seller trusts it will not fall apart. To start, you will share proof of income like pay stubs and W-2s or tax returns, bank statements for your savings, and a photo ID. It is free, we can begin with a soft credit check that will not ding your score, and it usually takes about an hour.
Credit scares people more than it should. Your credit score is just a number, roughly 300 to 850, that sums up how you have handled borrowed money. Lenders look at whether you pay on time, how much of your available credit you are using, and how long you have had credit. You do not need a perfect score to buy a home, there are loan programs built for a wide range of credit profiles. If your credit is not where you want it, we can look at it together and give you a simple plan, and sometimes just a couple of moves make a real difference. The worst thing you can do is assume you will not qualify without ever checking.
This is the single biggest myth in home buying, and it stops more people than anything else. You do not need twenty percent down. A conventional loan, the most common type, can go as low as three percent down. An FHA loan, which is government backed and more flexible on credit, is three and a half percent. And if you have served in the military or you are buying in an eligible rural area, VA and USDA loans can be zero down for those who qualify. On top of all that, there are down payment assistance programs that can help cover some or even all of it. The twenty percent number comes from avoiding one specific insurance cost, which I will explain, but it is absolutely not required to buy.
When people picture a mortgage payment, they think of the loan. But your real monthly payment is four things, and lenders call it PITI. Principal, which pays down what you borrowed. Interest, the cost of borrowing the money. Taxes, meaning your property taxes. And insurance, your homeowner's insurance and sometimes mortgage insurance. To decide how much you can borrow, lenders look at your debt-to-income ratio, or DTI, which is simply your monthly debt payments divided by your monthly income before taxes. Lower is better. My real advice: do not borrow the absolute maximum you qualify for. Pick a payment you can live comfortably under, so the house feels like a win every month instead of a stretch.
Beyond your down payment, there are closing costs. These are the one-time fees to actually finalize the purchase: the appraisal, title work that confirms the home is legally yours to buy, lender fees, and recording fees with the county. As a general rule of thumb, closing costs run somewhere around two to five percent of the loan amount, though it varies with the price, the loan type, and where you are buying. Two things to remember. One, this is separate from your down payment, so budget for both. Two, in a lot of deals the seller can agree to cover some of your closing costs, which we can negotiate, depending on the loan program and its limits.
There are four loan types you will hear about, and each fits a different buyer. Conventional is the most common, not government backed, and can go as low as three percent down if you have decent credit. FHA is government backed and more forgiving on credit, with three and a half percent down, which is why it is a favorite for first-time buyers. VA loans are for veterans, active-duty service members, and some surviving spouses, often with zero down and no monthly mortgage insurance, one of the best deals in the country. USDA loans are for eligible rural and some suburban areas, also often zero down. You do not have to memorize any of this. Part of my job is matching you to the right one.
You do not do this alone, and the two people who matter most are your real estate agent and your lender. A good local agent knows the neighborhoods, spots problems you would miss, and negotiates for you, and as the buyer it usually costs you nothing because the seller typically pays the agent. Your lender should be local and reachable, someone who actually answers when you call, not a 1-800 number or an app that ghosts you. When you house hunt, shop with your pre-approval in hand so you only look at homes you can truly buy, and write a short list of what you genuinely need versus what is nice to have. The right team makes the whole thing calmer.
When you find the one, your agent helps you write the offer. Price is the obvious part, and your agent uses recent nearby sales to land on a number that is competitive but fair. You will usually include earnest money, a good-faith deposit that shows the seller you are serious. It is not lost money, it gets applied to your down payment or closing costs at the end. But price is not everything: your closing date, your contingencies, and what you ask the seller to cover all shape whether your offer wins. In a competitive market, a strong pre-approval and a clean, simple offer often beat a slightly higher price.
Once your offer is accepted, two things happen that exist purely to protect you. The inspection is where a professional walks the home and tells you what is really going on: the roof, the furnace, the plumbing, the foundation. If something big turns up, you can negotiate repairs, ask for credits, or walk away. The appraisal is ordered by your lender, where a neutral expert confirms the home is worth what you agreed to pay, so you do not overpay and so your loan is backed by real value. One protects you from a bad house, the other from a bad price. Please do not skip the inspection just to win a bid, that is a gamble that can cost you far more down the road.
After the inspection and appraisal, your file goes to underwriting, which is the lender's final, detailed review of your income, your assets, and the home itself. This is usually the quietest and most nerve-wracking stretch, and here is the most important thing I can tell you tonight: do not rock the boat. Until you have the keys, do not open new credit cards or finance anything, do not change or quit your job, and do not make big purchases like a car or a whole house of furniture. Any one of those can change your numbers and put your loan at risk right before the finish line. If you are ever unsure whether something matters, call me first. That one phone call has saved a lot of closings.
Let me save you the four most common regrets I see. One, house hunting before you are pre-approved, so you fall in love with something you cannot get, or you lose it to a buyer who was ready. Two, borrowing the absolute maximum, which leaves you no breathing room when life happens. Three, skipping the inspection to win a bid, then inheriting expensive surprises. Four, making big money moves during the process, which we just covered on the last slide. Notice that almost every one of these comes from moving fast without a guide. Slow down at the right moments, and you will avoid nearly all of them.
There is more help out there than most people realize, and a lot of it is aimed right at first-time buyers. Many states and local agencies offer down payment assistance, money to help cover that upfront cost, sometimes as a grant you do not have to repay. There are loan programs with first-time-buyer-friendly terms, and in some areas, tax credits that put money back in your pocket. Eligibility depends on things like your income, the area, and the program's own rules, so the trick is simply to ask what you qualify for instead of assuming you do not. When we talk, I will help you find the programs you are actually eligible for. Certain limitations apply, so we will check the details together.
That is the whole path, and here is my only ask. If you are even thinking about buying in the next year, the smartest first move is a simple, no-pressure conversation so you know your real numbers. When you work with us, we are a broker, which means we shop a lot of lenders on your behalf and bring back strong options, instead of you calling around one bank at a time. It is free to talk, it will not hurt your credit, and there is zero obligation. Grab me right after class, call the number on the screen, or visit the website. Thank you for spending your evening with me. Now, let's get your questions answered.