First-time home buying guide: A roadmap to

Buying your first home is an exciting journey, but it can also feel like navigating a maze. As first-time home buyers, knowing how to buy a house and understanding every step of the home-buying process will help you move forward with confidence. 

From improving your credit score to closing with ease on closing day, let’s break it down into clear, actionable steps so you can focus on finding the perfect place to call your own.

1. Assessing Your Financial Readiness

Before you start home shopping, take a hard look at your finances:

Your credit score is one of the most important numbers in the home-buying journey. Start by pulling your credit report from each of the three major bureaus to ensure no errors or outdated accounts are dragging your score down. 

Lenders use this score to determine your eligibility for a home loan and the interest rate you’ll be offered. Improving your credit score (like making payments on time) can help lower your mortgage rates. 

This is how lenders calculate your debt-to-income ratio (DTI): They divide your total monthly debt payments by your gross monthly income. 

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A DTI below 43% is generally preferred. It shows that you're able to manage your monthly mortgage payments alongside existing obligations, like student loans, without financial strain. If your DTI is too high, consider paying down balances or increasing income before applying for pre-approval.

Once you own a home, unexpected costs, like a failing water heater or a leaky roof, can arise at any moment. This is why it’s essential to have an emergency fund in place. This should cover 3–6 months of living expenses, ensuring you’re prepared for any unexpected costs. 

Plan to set aside around 1–2% of your home’s value each year for routine maintenance and home repairs, so you’re never scrambling to cover necessary upkeep.

Pre-qualification gives you an estimate of what you might borrow based on self-reported financial details. In contrast, many offices use a virtual phone number to handle pre-approval of loans. It involves a formal review by a loan officer or processor, often at a credit union or a traditional bank, and requires documentation of your income, assets, and credit. Sellers take pre-approved buyers more seriously, and you’ll know exactly how much you can offer on a home.

Estimating your real monthly obligation is crucial. With mortgage calculators, you get an estimate of your monthly payments. Enter the loan amount, interest rate, and property tax, and play with different down-payment options and loan terms. This gives you a clear understanding of what fits comfortably within your budget and avoids unpleasant surprises once your loan is finalized.

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2. Exploring Loan Options

With your pre-approval in hand, it’s time to explore the types of home loan programs available. Each option comes with its own set of requirements, interest rates, and benefits. So it’s worth understanding the nuances before you decide.

These are often the first choice for buyers who have a solid credit score and can make a sizable down payment, typically between 5% and 20%. These mortgages aren’t backed by a government agency, so they may offer more flexibility in loan terms and property types.

The FHA loan, backed by the Federal Housing Administration, lets buyers make down payments as low as 3.5%. This makes it an attractive route if your FICO score (a type of credit score) isn’t perfect. 

If you’re a veteran or active-duty service member, a VA LOAN can be a game-changer. With no required down payment and competitive interest rates, it’s a benefit earned through service. For buyers in eligible rural areas, the USDA LOAN program also offers 0% down financing. However, you’ll need to meet income limits and property location guidelines. 

If you haven’t yet sold your current home but want to move quickly, a bridge loan can provide short-term financing. This loan “bridges” the gap between purchasing your new property and selling your old one. It provides you with the flexibility to secure a new home without waiting for the sale proceeds to clear.

3. Partnering with Real Estate Professionals

Finding the right help can make your home-buying process smoother and more efficient. Find a real estate broker who can guide you through the complexities of the real estate market.

Start by asking friends and family if they recommend someone, and read online reviews. The agent needs to have a proven track record of working with first-time homebuyers—someone who understands your concerns and budget. 

Additionally, enroll in homebuyer education workshops. These serve as resources as they explain essential documents that you’ll encounter during the buying process, so you know exactly what you’re signing and why each step matters.

4. Launching Your Home Search

Now that you’ve lined up your financing and secured a trusted real estate agent, it’s time to dive into the home search. 

Start by tapping into the Multiple Listing Service (MLS) to see every available property in your desired area. Don’t just skim photos. Take a deep look at neighborhood details. Also, weigh the pros and cons of, for example, a townhouse vs a condo. 

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5. Making an Offer and Entering Contract

Once you’ve found “the one,” it’s time to make your move by submitting an offer. This stage is all about crafting terms that protect you while appealing to the seller.

• Work with your real estate agent to create a solid purchase agreement. This should clearly outline the purchase price, timelines, and contingencies, such as the home inspection, financing approval, and appraisal, to safeguard your investment.

• Negotiate the closing date and determine the amount of your earnest money deposit, which will be held in an escrow account until the transaction is finalized.

• Coordinate with your lender if you’re also selling another property. You may need a bridge loan or careful timing to ensure your sale and purchase align without leaving you stuck between homes.

6. Conducting the Home Inspection and Appraisal

Before you get to the finish line, two checkpoints safeguard your investment: the home inspection and home appraisal. 

They have different purposes—an inspection uncovers condition issues and potential home repairs, while an appraisal confirms the home’s market value for your lender. Their results can impact your purchase agreement and even your closing date. So, schedule both promptly and work with your real estate broker to negotiate next steps.

For this step, a certified home inspector can evaluate the structure, roof, HVAC, electrical, plumbing, and safety hazards. Plan to attend, ask questions, and review the written report carefully. Use the findings to request repairs, negotiate credits, or—if needed—reconsider your offer based on risk and cost.

Your lender will order a home appraisal to verify market value. If the appraisal comes in low, consider:

• Renegotiating the price

• Asking for seller concessions

• And increasing your down payment

A property survey confirms lot boundaries and flags easements or encroachments that could affect future projects. An energy audit highlights efficiency upgrades (insulation, sealing, appliance updates) that can lower utility bills and improve comfort after move-in.

An optional home warranty can offset the cost of unexpected breakdowns for major systems and appliances during your first year. It’s different from homeowners’ insurance: warranties cover wear-and-tear failures, while insurance covers losses from events like fire or theft.

7. Supporting Your Family

A new beginning in a new home is an important milestone for all families, but it can also be a source of stress for many of its members. This is especially true when it comes to adolescents transitioning through a period filled with internal and external changes. 

It's important to be alert to possible teenage anxiety symptoms, such as changes in behavior, sleep, or eating habits. One way to support them during the process and reassure them is to involve them in the move. They can participate in home tours, imagining what their new room could look like and how they’d like to decorate it.

8. Finalizing Financing and Preparing for Closing

With inspections wrapped, it’s time to finalize the finances and paperwork. Start by reviewing your closing disclosure line by line—it lists your:

• Closing costs

• Final interest rate

• Projected monthly payment

• Property taxes

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Compare it to your earlier loan estimate and confirm any changes with your loan officer. Discuss when to lock your mortgage rates and confirm whether your lender will set up an escrow account from which they collect insurance and property taxes along with your payment.

Next, make sure the title work is in place. Your title company runs a title search to confirm the house title is free of liens or ownership disputes. Purchase title insurance to guard against hidden defects, and secure your homeowners insurance. Your lender will usually require proof of coverage before funding the loan.

9. Closing On Your Home

Congratulations! You’ve made it to closing day. Meet at the title company (or your attorney’s office) to finalize the sale. Bring a government-issued ID, proof of homeowners' insurance, and any other documents your lender requested. 

Read everything carefully before you sign papers. Check that the purchase price, interest rate, and monthly mortgage payments are correct and match what you were promised. 

(Most probably, many prep documents and disclosures can be handled digitally. This means that you can easily e-sign documents and agreements online with reputable platforms that use encrypted identity verification, keeping transactions secure and convenient.) 

You’ll provide any remaining funds for your down payment and closing costs via wire or a cashier’s check, so that the money can be disbursed from the escrow account. 

10. Settling Into Your New Home

After you’ve signed the house title, it’s time to get settled:

• Update your home address with the post office, banks, employer, and subscriptions. Also, set up utilities, like electricity, gas, and water.

• Track your mortgage payments. If mortgage rates drop, talk to your lender about whether refinancing makes sense.

• Keep records of property taxes, insurance, and home improvements. These might be handy for tax time and if you’re considering selling your house in the future.

Final Words

Purchasing your first home is a big milestone. When you understand how to buy a house, from improving your credit score and comparing loan programs to planning monthly mortgage payments, the home-buying process becomes manageable. 

Be patient, keep copies of everything you’ve signed, and discuss any concerns you might have with a real estate agent. 

P.S. If you need help saving up for your home appliances or paying off your home loan, and upfront costs are stretching your budget, set up a free fundraiser on Fundly and let your community pitch in. 

Author bio: Kristina Iavarone

Gravatar email: [email protected]

Kristina is a content writer and editor at uSERP, with a passion for building long-lasting relationships with B2B and B2C clients through content and SEO efforts. Her work has appeared in Medical News Today, Healthline, and GetYourGuide, and when she’s not working, she’s either at a café or exploring new places with her husband. Connect with her on LinkedIn