Buying your first home
A clear path from your first budget to closing day. Start with a payment you can afford, then compare loan options and cash needed.
Start with your full budget
Your monthly cost includes more than principal and interest. Add property taxes, homeowners insurance, mortgage insurance when required, and HOA dues. Leave room for utilities, maintenance, and savings. A lender's maximum approval amount may be higher than the payment you prefer.
Your upfront cash may include a down payment, lender and title closing costs, prepaid taxes and insurance, and an initial escrow deposit. Keep a reserve for moving and repairs. A 20% down payment is not always required.
Four numbers to write down
- Monthly payment you feel comfortable making.
- Cash available for down payment and closing.
- Savings you want to keep after closing.
- Price range and timing for your move.
The tools provide planning estimates. A Loan Estimate gives loan-specific figures.
Six steps from planning to keys
Set your budget
Check credit, current debt, income, savings, and a comfortable total monthly payment.
Discuss loan options
Ask about conventional, FHA, VA, USDA, and any assistance program for which you might qualify.
Prepare for preapproval
Provide the income and asset records your lender requests. Ask what the letter covers and what remains unverified.
Shop and make an offer
Review the price, deposit, inspection terms, financing terms, and expected closing date with your agent.
Complete loan review
Compare your Loan Estimate, respond to underwriting requests, and review the appraisal and title work.
Review and close
Compare the Closing Disclosure with your Loan Estimate, confirm funds and signing details, then close.
Low down payment does not mean one loan type
These are starting points. Eligibility, mortgage insurance, fees, property rules, and available programs vary. Compare the total payment and cash to close.
Prepare before you shop
Gather recent income records, bank statements, identification, and details of debts. Self-employed income, gifts, and assistance funds may need additional records. Use a secure application for sensitive documents.
A preapproval reflects a preliminary review, not final loan approval or a rate lock. Once you choose a property, the lender reviews the home and your complete application. Avoid taking on new debt or moving large sums without discussing the effect on your loan.
Ask before you make an offer
- What will my full monthly payment include?
- How much cash should I bring to closing?
- Which program fits my finances and the property?
- Are any assistance funds available and repayable?
- What would change the rate, payment, or approval?
Read the numbers before closing
For most covered mortgages, you receive a Loan Estimate after submitting the six required application details. Compare the interest rate, APR, projected payment, closing costs, and cash to close. Ask whether the rate is locked and when the lock expires.
You generally receive a Closing Disclosure at least three business days before closing. Compare it with your Loan Estimate and ask about any change you do not understand. Confirm wiring instructions by calling a trusted phone number you already have, not a number in an unexpected message.
Helpful next steps
Use the payment calculator with a realistic tax and insurance amount. Review your cash-to-close estimate. Then discuss the property and your finances with a loan officer for loan-specific figures.
Discuss your buying planSources and details
Sources: CFPB homebuying guide ↗, Loan Estimate guide ↗, Closing Disclosure guide ↗, HUD FHA information ↗, and PHFA buyer resources ↗.
This guide is for general planning. Loan programs, assistance, rates, and costs depend on current rules, lender review, and your situation. No approval or loan offer is implied.