Free guide

First-time home buyer guide

The steps from "just looking" to keys in hand, in plain English. Shared by Jamie Demo, Demo Brokerage.

1. Know your budget before you shop

   Look at your monthly budget, savings and credit before you look at homes. Your payment is more than principal and interest: it usually includes property taxes, homeowners insurance and, with less than 20% down on many loans, mortgage insurance.

   Free or low-cost help: HUD-approved housing counselors can walk you through budgeting and buying. Find one at hud.gov/findacounselor.

2. Learn the main loan types

   FHA loans allow a down payment as low as 3.5% for borrowers with a credit score of 580 or higher (HUD).

   Some conventional loans allow as little as 3% down for eligible buyers (Fannie Mae).

   VA home loans usually need no down payment for eligible service members, veterans and surviving spouses (VA).

   USDA guaranteed loans can need no down payment for eligible buyers in eligible rural and suburban areas, with income limits (USDA).

   Ask your state housing finance agency about down payment help for first-time buyers.

3. Get pre-approved and compare offers

   A pre-approval tells you what a lender may lend and shows sellers you are ready. Talk to more than one lender.

   After you apply, the lender must give you a Loan Estimate within three business days. Use it to compare loans side by side (CFPB).

4. Tour homes with a plan

   Write down your must-haves and nice-to-haves, your areas and your top price. Tour in person or by video and take notes on each home.

5. Make an offer

   Your offer sets the price, the earnest money deposit, the closing date and contingencies such as inspection, appraisal and financing. Your agent explains each term before you sign.

6. Inspection and appraisal

   A home inspection looks at the condition of the home. An appraisal is the lender's check on value. Either one can lead to a repair request or a new conversation about price.

7. Close

   You get a Closing Disclosure at least three business days before closing. Compare it with your Loan Estimate and ask about any change (CFPB).

   Before you wire money, call your title or closing company at a phone number you already know is real. Wire fraud emails can look official.

   On many conventional loans, you can ask to cancel private mortgage insurance once your balance reaches 80% of the home's original value (CFPB).

Sources

• CFPB: Buying a house
• CFPB: Loan Estimate and Closing Disclosure
• CFPB: When can I remove private mortgage insurance?
• HUD: FHA minimum credit score and maximum financing (Mortgagee Letter 2010-29)
• HUD: Find a housing counselor
• VA: Purchase loan
• USDA: Single Family Housing Guaranteed Loan Program
• Fannie Mae: HomeReady mortgage

General information, not lender, legal or tax advice. Loan programs change; check with a lender and the sources above.