We all have dreams, and for many people, owning a home is their dream. But the home buying process can be stressful - especially for people who don't know what to expect.

You, however, have come to the right place to learn about the home buying process and what to expect. So let's start by looking at the basic steps you'll complete during the home buying process:

Calculate Your Buying Power

The easiest way to eliminate the stress of buying a new home is to have a clear understanding of your buying power - or how much home you can comfortably afford. When you know what you can afford, you can focus on looking for homes that are right for you - and within your budget.

Apply for a Home Loan

Once you have an idea of what you can afford, you're ready to apply for a home loan. Remember, you don't have to wait until you find the house you want to apply for a loan. In fact, we recommend that you apply before you start looking. If you're pre-qualified for a home loan before you start looking, you'll have a better idea of where to look, and sellers will know you're serious about buying. To help you get things started, we've created What You Need to Apply checklists to let you know what information you'll need to apply and an online application (English Application / Spanish Application).

After You Apply:

After processing the information from your application, your Amerites loan consultant will explain the various Amerites loan programs for which you qualify. After you've discussed and determined your loan program, your loan consultant will provide you with several disclosure documents, including:

n       Good Faith Estimate:  this document details your closing costs and your monthly payment (principal and interest).

n       Truth in Lending statement:  this document details the cost of finance charges and the total amount you'll pay for credit.

You may also receive additional disclosures, including any required by your state and/or loan program.

Locking In Your Interest Rate

Depending on market conditions, you may prefer to "lock in" your interest rate immediately while you shop for a home, or wait until you're almost ready to close on your loan.

Be sure to ask how far in advance you can lock a guaranteed rate - a longer lock period may affect your costs.

As always, if you have any questions, contact your Amerites loan consultant, who will be happy to help you with this and all other stages of the home buying process.

Your First Meeting with Amerites

Your loan approval process generally begins with an initial meeting with a Amerites loan consultant. During this meeting, you'll discuss the potential loan and also have the opportunity to ask questions about any aspect of the home buying process. If you haven't completed our online application ( English Application  / Spanish Application ), please bring the information found in our What You Need to Apply  checklists. You'll need to bring the following to your initial meeting:

■        Purchase contract (if you have one)

■        Checking and savings account statements for the last 2 - 3 months

■        Pay stubs for each borrower and co-borrower(s) - reflecting earnings for the last 30 days and year-to-date earnings (these must be computer-generated or typed originals that identify the employer and the employee's name)

■        Last year's W2 (and 1099 if applicable) for each borrower and co-borrower(s), plus federal tax returns for the last 2 years (or other proof of income and employment verification)

■        Divorce settlement papers (if applicable)

■        Credit card bills for the last few billing periods, or cancelled checks for rent or utility bill payments

■        Information about other debts such as car loans, furniture loans, student loans, and retail credit cards

■        A gift letter if you are using a gift from a parent, relative, or organization to help with your down payment and/or closing costs. If you are using a gift, check with your Amerites loan consultant.

Your application will be processed faster if you supply the documents listed above when you meet with your Amerites loan consultant.

After your initial meeting, you'll have a good idea whether you qualify for the type and size of loan you want. Within a few days, your Amerites loan consultant will let you know if you're approved. If your loan application is denied, your Amerites loan consultant will explain why and discuss any alternative lending options with you.

Find a Home

Even if you're not a shop-a-holic, finding a home can be a fun, exciting shopping experience. Maybe you'll want to start looking at home listings on the Internet. Perhaps you prefer to drive around your favorite neighborhood and look for houses that are for sale. You might want to work with a real estate professional (Amerites Real Estate professionals provide full Real Estate services in Houston, Texas) Or you could be very industrious and do all of the above! (Use the following information as a general guide, as many states have different requirements and laws pertaining to home sales.)

Using the Internet

The Internet has definitely helped prospective homeowners quickly and efficiently find homes that are right for them. With just a few simple searches, you can easily find hundreds of houses in your area and across the country that are ready for you to buy. Most Web sites that list houses provide maps, tax information for specific areas, school locations, crime statistics, and some even let you tour the homes' interiors from the convenience of your desk. For Houston Properties use Search Houston MLS option.

Driving Around

If you prefer to look for homes the old-fashioned way, you can hop in your car and start looking for available homes in your area. You'll be surprised at what you drive by every day, and at what new areas you'll discover when you slow down and start looking.

Contacting a Real Estate Professional

If you haven't contacted a real estate professional in your area, you might consider looking for one. Real estate professionals are licensed professionals who can help you save both time and money, and can provide a short list of homes with the features you can't live without - whether it's a fireplace, double garage, or pool.

Some may ask you to sign contracts stating that they exclusively represent you for a certain number of days or months. Remember, you're trying to make a business transaction, potentially the largest one you've ever made, so you want to be comfortable with the real estate professional you're working with.

Amerites provides Real Estate services in Houston, Texas. We also rebate 1% of our commission to our buyers when we represent them as Buyer Agent.

Make an Offer and Negotiate

So you've applied for your loan, obtained a pre-qualification, and found your dream home. Now it's time to make an offer.

Submitting a Contract

When you're ready to make an offer, you'll submit a contract, which will be reviewed by the seller. The contract will include your offer price, as well as your contingencies, which will help protect your interests. Contingencies are requirements that must be met in order for the sale to go through. You might want to consider including the following contingencies:

■        Home must pass inspection:  if the home inspection reveals faults in the home, you'd have the right to back out if the owner won't make repairs, if the repairs exceed a specified limit, or if the repairs can't be made.

■        Repairs must be made to your satisfaction:  if the seller agrees to make repairs, which turn out to be unacceptable, then you would be able to get out of the contract.

■        Financing must be approved:  if something were to happen to your credit or you were unable to get approval for the home loan, you would be able to get out of the contract.

In addition to the contract, you'll also need to present an earnest-money check, which will only be cashed when the sales contract is signed. Earnest money is like a deposit; it lets the seller know that he or she is entering negotiations with a serious buyer. The earnest money is held by a third party in an account often called an escrow account, and the money is applied to your closing costs.

Though earnest money guidelines vary, generally here is how it works: If negotiations break down before the contract is signed, you will get your original earnest-money check back. Likewise, if the contract falls through because the seller does not meet your requirements, you will get your original check back; however, if you back out of the contract or fail to meet the seller's requirements, you will lose your earnest money.

If your contract contains an offer that is too low for the seller or includes contingencies the seller wants to change, then you and the seller will begin negotiations. Basically, your offer contract will be changed to meet both yours and the seller's requirements. Maybe the seller will be willing to lower the price of the house, but not as much as you originally requested. Depending on the market, the seller might be very willing to negotiate with you. If and when you do reach an agreement, you'll be ready to close the deal.

More on Negotiating

Most homes are sold for less than their asking price. If you're working with a real estate professional, he or she will be the person who helps you decide what to offer, and deliver your offer to the seller. If you're buying directly from the owner, you'll be negotiating on your own.

Your ability to negotiate with the seller will depend on several factors:

■        Condition of the home:  if the home requires repairs, then you can use the estimated cost of those repairs to lower the price or ask that the seller make the repairs before you buy. (Repairs may be mandatory, depending on your loan's features.)

■        Current market:  depending on the current market, buyers or sellers may benefit. For example, in a buyer's market, more homes are available than people who are looking to buy, so you are more likely to succeed in making a lower offer and negotiating aggressively. On the other hand, a seller's market has more people looking for homes than there are homes for sale. In this situation, you'll likely have to make an offer that is close to the seller's asking price.

■        Seller's motivation:  if the seller needs to relocate quickly or buy a larger house for a growing family, he or she may be willing to accept a lower offer.

■        Seller's equity in the home:  sellers who have little equity in their homes may be less willing to accept low offers because they don't want to lose money in selling at lower prices.

Close the Deal

After you've negotiated the price of your house and any contingencies, you and the seller will sign the offer contract. Also, if you worked with a real estate professional, he/she will review and sign the contract. Once everyone has signed the contract, your earnest money check will be cashed. Then, you'll contact your Amerites loan consultant to arrange for the check you'll use to pay for your home. On closing day, you'll exchange the papers necessary for the house to be legally transferred.

On average, closing costs are about 3 - 6% of the house's sale price. Closing costs may include:

■        Origination fee

■        Points

■        Prepaid homeowner's insurance premiums

■        Appraisal fee

■        Underwriting fee

■        Processing fee

■        Tax service fee

■        Recording fee

■        Title search and insurance

■        Flood certificate fee

■        Credit report fee

■        Tax adjustments

■        Agent commissions

■        Private mortgage insurance premiums (required if your down payment is less than 20% of the home's price)

Move into Your New Home

So you've closed the deal on your new home, and now all you have to do is start moving! Hopefully you've already started lining up some friends who are willing to help you move in exchange for pizza and a chance to see your new place. Or, you might want to hire a moving company to do all the work for you.