Get expert insights to prepare for your first home purchase

The biggest first time home buyer tip is to get pre-approved before house hunting—not just pre-qualified. Pre-approval requires full document verification and tells you exactly what you can afford. Beyond that, save more than you think you need (closing costs add 2-5% on top of your down payment), don’t make major purchases before closing and always get a home inspection even in competitive markets.

Advice for First Time Home Buyers: Where to Start

Buying your first home feels overwhelming. There’s new vocabulary, confusing paperwork and high-pressure decisions. Breaking it into stages makes the process manageable.

Stage 1: Financial Preparation (3-12 Months Before)

Start here before looking at a single listing.

Check your credit reports. Pull free reports from AnnualCreditReport.com. Look for errors, high balances and collection accounts. Dispute mistakes and pay down credit card balances to under 30% of limits.

Build your savings. Most first-time buyers underestimate cash needs. Plan for:

• Down payment: 3-20% of purchase price
• Closing costs: 2-5% of loan amount
• Moving expenses: $1,000-$5,000
• Emergency reserves: 2-3 months of payments
• Immediate repairs or purchases: $2,000-$5,000

Calculate your true budget. Online calculators give rough estimates. Your real budget depends on your complete debt-to-income ratio, income stability and other financial goals.

Amanda Chen earned $72,000 and thought she could afford $400,000 based on an online calculator. After talking with a lender, she learned her student loans limited her to $315,000. Finding this out before falling in love with an expensive home saved her heartache.

Stage 2: Getting Pre-Approved (2-4 Weeks)

Pre-approval is non-negotiable. It tells you your exact budget and shows sellers you’re a serious buyer.

Gather your documents:

• 2 years of tax returns
• 2 years of W-2s or 1099s
• 30 days of pay stubs
• 2-3 months of bank statements
• ID and Social Security number

Apply with multiple lenders. Rates and fees vary significantly. Get at least 3 quotes. Multiple inquiries within 14-45 days count as one for scoring purposes.

Understand your approval amount. Just because you’re approved for $350,000 doesn’t mean you should spend that much. Leave room for life—vacations, emergencies, other goals.

Stage 3: Finding the Right Home (4-12 Weeks)

Now you can start the fun part.

Define your priorities. Make two lists: must-haves and nice-to-haves. Be realistic—first homes rarely check every box.

Work with a buyer’s agent. A good agent knows the local market, handles negotiations and guides you through the process. Their commission typically comes from the seller.

Stay patient. Most first-time buyers tour 10-15 homes before making an offer. Some see 30+. Rushing leads to regret.

Stage 4: Making It Official (30-45 Days)

Once you find the right home, move quickly but carefully.

Make a strong offer. Your agent will help you determine a competitive price based on comparable sales and market conditions.

Get inspections. Never skip this step. Budget $300-$500 for a general inspection plus additional costs for specialized inspections if needed.

Stay focused through closing. Avoid financial changes—no new credit, no large purchases, no job changes until you have the keys.

First Time Home Owner Advice: Common Mistakes

Learning from others’ mistakes saves thousands. Here are the most expensive first-time buyer errors.

Mistake 1: Shopping Before Getting Pre-Approved

Looking at homes before knowing your budget wastes time and causes disappointment. Worse, sellers don’t take offers seriously from buyers without pre-approval.

The fix: Complete pre-approval before your first showing. Get a letter specifying your maximum purchase price.

Mistake 2: Emptying Savings for the Down Payment

Many first-time buyers scrape together every dollar for down payment, leaving nothing for closing costs, moving expenses or emergencies.

The fix: Keep reserves. If you have $30,000 saved, don’t buy a house requiring $28,000 down. Consider a lower down payment option that leaves cushion.

The Garcia family put 20% down on their first home, leaving $2,400 in savings. When the HVAC failed during their first summer, they charged $6,800 to credit cards. That debt took two years to pay off and cost $1,400 in interest.

Mistake 3: Making Major Purchases Before Closing

That new car, furniture set or appliance package can wait. Large purchases change your debt-to-income ratio and can derail your loan approval.

The fix: Freeze all major spending from pre-approval through closing. Buy the car after you get the keys.

Mistake 4: Skipping the Home Inspection

In competitive markets, some buyers waive inspections to make their offers more attractive. This is risky for first-time buyers who may not spot problems.

The fix: Always get an inspection. If the market requires waiving the contingency, get an inspection anyway—you just can’t back out based on findings.

Mistake 5: Forgetting About Ongoing Costs

Your mortgage payment is just the beginning. Property taxes, insurance, maintenance and utilities add up quickly.

The fix: Budget for total housing costs, not just the mortgage. The 1% rule suggests budgeting 1% of your home’s value annually for maintenance.

Rachel Thompson bought a $280,000 home with a $1,650 mortgage payment. She didn’t account for $450 in property taxes and insurance, $200 in utilities and $150 in average maintenance costs. Her true monthly housing cost: $2,450.

Mistake 6: Choosing the Wrong Loan Type

First-time buyers often default to whatever loan their lender suggests without exploring options. Different loans suit different situations.

The fix: Ask about multiple loan types. Compare FHA, conventional, VA (if eligible) and any first-time buyer programs in your area.

Mistake 7: Not Researching the Neighborhood

Focusing only on the house ignores factors that affect daily life and resale value.

The fix: Visit at different times of day. Drive the commute during rush hour. Check school ratings even if you don’t have kids (affects resale). Look up crime statistics and planned developments.

New Home Purchase Tips: Saving Money

First-time buyers leave money on the table by not knowing where to look for savings.

Down Payment Assistance Programs

Most states offer programs specifically for first-time buyers. These include:

• Grants (free money you don’t repay)
• Forgivable loans (disappear after 5-10 years of ownership)
• Low-interest second mortgages
• Tax credits

The Williams family in Georgia received a $7,500 forgivable loan through Georgia Dream. Combined with a 3% down conventional loan, they bought their $265,000 home with just $8,450 out of pocket.

First-Time Buyer Tax Benefits

Mortgage interest deduction: Interest paid on your mortgage may be tax-deductible if you itemize.

Property tax deduction: Up to $10,000 in state and local taxes (including property tax) can be deducted.

Mortgage Credit Certificate (MCC): Some first-time buyers qualify for a tax credit of 20-40% of mortgage interest paid annually. This is different from a deduction—it reduces your tax bill dollar-for-dollar.

Negotiate Seller Concessions

Sellers can contribute toward your closing costs, reducing your cash needed at closing. Our seller concessions guide breaks down the limits by loan type.

How it works: Instead of offering $300,000, offer $306,000 with $6,000 in seller concessions. You finance the closing costs but bring less cash to the table.

Limits apply:

• Conventional (less than 10% down): 3% of purchase price
• Conventional (10-25% down): 6% of purchase price
• FHA: 6% of purchase price
• VA: 4% of purchase price

Compare Lenders Aggressively

A 0.25% rate difference on a $300,000 loan equals $45/month or $16,200 over 30 years. Spending a few hours getting multiple quotes pays off enormously.

Get quotes from:

• Your current bank
• A credit union
• An online lender
• A mortgage broker (shops multiple lenders for you)

First Time Home Buyer Checklist

Use this timeline to stay organized.

6-12 Months Before Buying

• Check credit reports from all three bureaus
• Dispute any errors on credit reports
• Pay down credit card balances
• Avoid opening new credit accounts
• Calculate how much you can save monthly
• Set up automatic transfers to savings
• Research first-time buyer programs in your state
• Start learning about different loan types

3-6 Months Before Buying

• Continue saving aggressively
• Get pre-approved with multiple lenders
• Interview and select a real estate agent
• Define your must-haves and nice-to-haves
• Research target neighborhoods
• Attend open houses to learn the market

1-3 Months Before Buying

• Begin active house hunting
• Tour homes that match your criteria
• Make offer on chosen home
• Negotiate terms and reach agreement
• Schedule home inspection
• Review and approve inspection results
• Complete appraisal process
• Finalize loan approval

Final Weeks

• Review closing disclosure (3 days before closing)
• Conduct final walkthrough (24 hours before closing)
• Wire closing funds or get cashier’s check
• Attend closing and sign documents
• Get your keys!

After Closing

• Change locks immediately
• Set up utilities in your name
• Update your address with USPS, employers, banks
• File homestead exemption (if applicable)
• Create a home maintenance schedule
• Build emergency fund back up

First Time Buyer Programs by State

Every state offers some form of first-time buyer assistance. Here are examples from major states:

California

CalHFA MyHome Assistance: Up to 3.5% of purchase price as a silent second loan. Combined with CalHFA first mortgage.

Texas

TDHCA My First Texas Home: Below-market rates plus up to 5% in down payment assistance. Income limits apply.

Florida

Florida Housing First Time Homebuyer: Down payment assistance up to $10,000 as a 0% interest second mortgage.

New York

SONYMA Down Payment Assistance: Up to $15,000 for first-time buyers in New York State. Forgiven after 10 years.

Georgia

Georgia Dream: Up to $10,000 in down payment assistance. Additional $2,500 for buyers in certain professions.

Ohio

OHFA First-Time Homebuyer: Below-market rates plus 2.5-5% in down payment assistance.

Check your state housing finance agency website for current programs and eligibility requirements.

Advice from Real First-Time Buyers

We asked recent first-time buyers what they wish they’d known.

Marcus, 32, Atlanta: “I obsessed over the down payment and forgot about closing costs. Had to scramble for an extra $8,000 right before closing. Start saving earlier than you think.”

Jennifer, 28, Phoenix: “Our agent pushed us toward houses at the top of our budget. We’re glad we chose something $40,000 below our max. We can actually afford to live.”

David and Priya, 34/31, Chicago: “We almost skipped the inspection to compete with other offers. The inspection found $12,000 in electrical issues. Seller fixed them. Never skip inspection.”

Angela, 36, Houston: “I bought in a neighborhood I barely knew because I loved the house. Turns out traffic is terrible during school hours and there’s nothing walkable nearby. Spend more time in the area before committing.”

Carlos, 29, Denver: “Get multiple lender quotes. My first quote was 7.125%. After shopping around, I got 6.75%. That’s $75 per month.”

Frequently Asked Questions

How much should a first time home buyer put down?

First-time buyers can put down as little as 3% with conventional loans or 3.5% with FHA loans. VA and USDA loans offer 0% down for eligible buyers. While 20% down avoids PMI, most first-time buyers put down 6-7% on average.

What credit score do first time home buyers need?

Minimum 580 for FHA loans with 3.5% down, or 620 for most conventional loans. However, better scores mean better rates. A 740+ score gets you the best conventional rates. Spend a few months improving your score before applying if possible.

Can I buy a house with no money?

Not exactly, but close. VA and USDA loans offer 0% down payment. You’ll still need cash for closing costs (2-5% of loan), though some programs and seller concessions can help cover these. Budget for at least 3-5% of purchase price in cash.

How much does a first time home buyer need to make?

There’s no income minimum, but you need enough to afford monthly payments within debt-to-income limits (typically 43% max). A household earning $60,000 annually could afford roughly $1,400-$1,600 in housing costs, translating to a $200,000-$250,000 purchase depending on down payment and rates.

Should I pay off debt before buying a house?

It depends. Pay off debt if it improves your DTI enough to qualify or get better rates. However, don’t drain your down payment savings to pay off low-interest debt. High-interest credit card debt should generally be paid off first.

How long does the first time home buying process take?

From deciding to buy through closing typically takes 3-6 months. Preparation (credit repair, saving) adds time if needed. The actual transaction from accepted offer to closing runs 30-45 days with a mortgage, less with cash.

Is it better to buy a starter home or wait?

Buying a starter home lets you build equity and stop paying rent. Waiting means you need somewhere to live (rent adds up) and prices may rise. The math depends on your local market, rent costs and how long you’ll stay. Generally, if you’ll stay 3+ years, buying beats renting.

What are the hidden costs of buying a house?

Beyond purchase price: closing costs (2-5%), moving expenses ($1,000-$5,000), immediate repairs/updates ($2,000+), new furniture/appliances ($1,000+), ongoing maintenance (1% of home value annually), higher utility costs than renting, HOA fees if applicable.

Related Articles

• First-Time Home Buyer Mistakes: 15 Costly Errors to Avoid
• First-Time Home Buyer Programs: Grants, Loans and Assistance
• Appraisal Gap: What to Do When Your Home Appraises Low
• Down Payment Assistance Programs: Free Money for Home Buyers