Buying your first home is an exciting milestone, but it can also feel overwhelming. With the housing market evolving and new financial tools available, it’s crucial to approach this journey with knowledge and preparation. This guide provides step-by-step insights, practical tips, and current data to help you navigate the home-buying process confidently.

Assess Your Financial Health

Before diving into property listings, ensure your finances are in order.

Check Your Credit Score

Your credit score significantly impacts your mortgage options. In 2025, lenders typically prefer a score of 620 or higher for conventional loans. A higher score can secure better interest rates, potentially saving you thousands over the life of the loan. DFPI

Understand Your Budget

Determine how much house you can afford by considering:

• Monthly income: Aim for housing costs (mortgage, taxes, insurance) under 28–30% of your gross income.

• Debt-to-income ratio: Lenders often prefer a ratio below 36%.

• Down payment: While 20% is standard, some programs allow as low as 3% down. kormendytrott.com

Save for Additional Costs

Beyond the down payment, budget for:

• Closing costs: Typically 2–5% of the home’s price.

• Home inspection fees: Essential for identifying potential issues.

• Moving expenses: Including utilities setup and insurance.

Get Pre-Approved for a Mortgage

Securing pre-approval gives you a clear picture of your budget and shows sellers you’re a serious buyer.

Gather Necessary Documents

Prepare:

• Proof of income: Pay stubs, tax returns.

• Credit history: Recent credit reports.

• Employment verification: Recent pay slips or employment letters.

Understand Loan Options

Explore various mortgage types:

• Conventional loans: Standard loans not insured by the government.

• FHA loans: Government-backed loans with lower down payment requirements.

• VA loans: For veterans, often requiring no down payment.

• USDA loans: For rural property buyers, with no down payment options.

Define Your Home Criteria

Clarify what you’re looking for to streamline your search.

Choose the Right Location

Consider:

• Proximity to work and schools.

• Neighborhood safety.

• Access to amenities like parks and shopping centers.

Determine Home Features

List your must-haves:

• Number of bedrooms and bathrooms.

• Yard size.

• Garage or parking space.

Future Growth Potential

Research the area’s potential for appreciation. Look for neighborhoods with planned infrastructure improvements or rising demand. bentleyproperties.com

Start House Hunting

With your criteria in hand, begin exploring available properties.

Utilize Online Platforms

Websites like Realtor.com offer comprehensive listings with filters to match your preferences.

Attend Open Houses

Visiting homes in person provides a better sense of the property’s condition and the neighborhood.

Work with a Real Estate Agent

An experienced agent can:

• Provide access to listings before they hit the market.

• Negotiate on your behalf.

• Guide you through paperwork and legalities.

Make an Offer and Negotiate

When you find the right home, it’s time to make an offer.

Determine Offer Price

Base your offer on:

• Comparable sales in the area.

• Home condition and any needed repairs.

• Market conditions: Is it a buyer’s or seller’s market?

Include Contingencies

Common contingencies include:

• Home inspection: To identify potential issues.

• Appraisal: To ensure the home’s value aligns with the loan amount.

• Financing: To protect against loan approval issues.

Negotiate Terms

Be prepared for counteroffers. Your agent can assist in negotiating terms that align with your best interests.

Conduct Inspections and Appraisal

Ensure the property’s condition meets your expectations.

Home Inspection

A licensed inspector will assess:

• Structural integrity: Foundation, roof, walls.

• Systems: Plumbing, electrical, HVAC.

• Safety hazards: Mold, pests, radon.

Appraisal

Lenders require an appraisal to confirm the home’s value supports the loan amount. If the appraisal is lower than the offer, you may need to renegotiate the price or increase your down payment.

Finalize Your Mortgage

With inspections complete, it’s time to finalize your loan.

Review Loan Terms

Ensure you understand:

• Interest rate: Fixed or adjustable.

• Loan term: 15, 20, or 30 years.

• Monthly payments: Principal, interest, taxes, insurance.

Prepare for Closing Costs

Closing costs can include:

• Loan origination fees.

• Title insurance.

• Escrow fees.

These typically range from 2–5% of the home’s purchase price.

Close the Deal

On closing day, you’ll sign the final paperwork and take ownership.

Review Documents

Ensure all terms are as agreed upon, including:

• Purchase agreement.

• Loan documents.

• Title transfer documents.

Pay Closing Costs

Bring a certified check or arrange a wire transfer for the closing costs.

Receive the Keys

Once everything is signed and funds are transferred, you’ll receive the keys to your new home!

Move In and Maintain Your Home

After closing, focus on settling in and maintaining your property.

Plan Your Move

• Schedule utilities: Electricity, water, internet.

• Change address: Notify USPS and other institutions.

• Hire movers: Or plan a DIY move.

 Regular Maintenance

Keep your home in top condition by:

• Cleaning gutters: Prevent water damage.

• Inspecting HVAC systems: Ensure efficiency.

• Checking for leaks: Address issues promptly.

Summary Table: First-Time Home Buyer Checklist