First-Time Home Buyer Guide

Buying your first home is part finance, part logistics, part emotional endurance sport. This guide lays out the whole journey in order — with the numbers most first-timers wish they had known at the start.

Step 1: Know your numbers (before Zillow)

Check your credit reports (free at AnnualCreditReport.com) and score; lenders price from ~740 at the best tier and approve from 580–620 depending on program. Set a housing budget with the 28% rule, then confirm a price range in the affordability calculator. Decide your down-payment target with the down payment calculator — remembering the real cash need is down payment plus 2–5% closing costs (estimate them) plus moving and reserves.

Step 2: Pick your loan program

• Conventional 3% down — for scores ~700+; PMI cancellable later.
• FHA 3.5% down — scores from 580; easier underwriting, MIP costs. (FHA calculator)
• VA 0% down — if you have service eligibility, usually the best deal in housing. (VA calculator)
• USDA 0% down — eligible rural/suburban areas and income ranges. (USDA calculator)
• State/local assistance — thousands of down-payment assistance programs exist: grants, forgivable second loans, and matched savings. Your state housing finance agency is the authoritative list.

'First-time buyer' usually means no home ownership in the past 3 years — many repeat buyers qualify for these programs too.

Step 3: Pre-approval, then house hunting

Get a verified pre-approval (see our pre-approval guide), interview agents who work with first-timers, and tour with your all-in monthly number in hand — the PITI calculator — not a price. Taxes and insurance vary enough to break budgets drawn from list prices alone.

Step 4: Offer → contract → closing

Expect earnest money (1–3%), inspection ($300–$500, almost always worth it), appraisal ordered by the lender, and 30–45 days to close. Read the Loan Estimate within 3 days of applying and the Closing Disclosure at least 3 days before signing. At the table you will bring cash to close by cashier's check or wire — verify wire instructions by phone, always, because wire fraud targeting buyers is rampant.

The costs nobody warns first-timers about

• Moving, deposits for utilities, immediate repairs and basics (lawn gear, locks, curtains) — budget $2,000–$5,000.
• Maintenance at ~1% of home value per year, every year.
• Escrow-driven payment increases when taxes or insurance rise at renewal.
• HOA special assessments in condos and planned communities.

Step 5: Your first year as an owner

File for your homestead exemption if your state offers one (it lowers property taxes). Set calendar reminders for insurance renewal shopping. When your equity passes 20%, start the PMI-removal conversation. And when rates drop meaningfully, run the refinance calculator before the ads convince you.