First Time Home Buyer Guide

A concise U.S. roadmap from budgeting to closing.

Step 1: Budget and credit

Pull your credit scores, target ≤28/36 DTI, and build a 3–6 month reserve.

Step 2: Down payment & programs

Options include FHA (3.5%), Conventional 97, USDA/RD, VA for eligible borrowers, and local down payment assistance grants.

Step 3: Get preapproved

Provide income, assets, and debts. Compare at least three lenders for rate, APR, and fees.

Step 4: Shop homes smartly

Consider taxes, insurance, HOA, commute, and resale potential. Budget for inspection and appraisal.

Step 5: Closing costs

Typically 2–5% of price. Ask for seller credits or lender credits; avoid rolling fees in unless break-even works.

FAQ

• Is 20% down required? No; it removes PMI but many first-time buyers use 3–5% down.
• What is earnest money? A good-faith deposit credited at closing; held in escrow.
• Should I buy points? Only if the monthly savings times the years you’ll keep the loan exceed the upfront cost.

Try our affordability calculator and mortgage calculator before touring homes.