First-Time Homebuyer Tips: What You Need to Know Before You Buy

Buying your first home is exciting—but it can also feel overwhelming. Between understanding your budget, navigating mortgage options, and choosing the right property, there’s a lot to take in. The good news? With the right guidance and preparation, you can make smart decisions and avoid common pitfalls.

Here are essential tips every first-time home buyer should know before making the leap.

1. Know What You Can Afford

Before falling in love with a dream home, determine how much house you can realistically afford. A good rule of thumb: keep your monthly housing costs under 28% of your gross monthly income. This is an older and perhaps, out of date guideline for developing a budget. Lenders once followed a strict guide of 28% “Front-end Ratio” (just the principal, interest, taxes and insurance, known as “PITI” and if you will pay association dues, “PITIA”) and a 36% “Back-end Ratio”, which includes the “Front-End” plus your installment and revolving debts.

To calculate your budget:

• Factor in mortgage payments, property taxes, insurance, (PITI) and HOA fees (PITIA).
• Use a tool like this one to estimate your buying power.

Also, pay attention to your debt-to-income (DTI) ratio—most lenders prefer it to be under 43% but again, we can go higher under certain conditions.

2. Check and Strengthen Your Credit

Your credit score plays a big role in the mortgage rate and loan type you qualify for. Most conventional loans require a score of at least 620, while FHA loans may accept scores as low as 580 (that comes with some rules though).

Improve your credit by:

• Paying down credit card balances
• Avoiding new debt or major purchases
• Checking your report for errors at AnnualCreditReport.com

Higher credit scores typically lead to lower interest rates, which can save you thousands over the life of your loan.

3. Get Preapproved for a Mortgage

A preapproval letter shows sellers you’re a serious buyer—and gives you a clear price range when house hunting.

What you’ll need:

• W-2s and/or tax returns
• Pay stubs
• Bank statements
• Proof of identity

Learn more about the preapproval process from the Consumer Financial Protection Bureau.

4. Factor in All Costs—Not Just the Price Tag

Beyond the listing price, you’ll also need to budget for:

• Closing costs (2%–5% of the home price)
• Home inspections and appraisals
• Moving expenses
• Maintenance and repairs

Also, don’t forget your down payment—which doesn’t have to be 20%. Many first-time buyers qualify for programs offering as little as 3% down.

👉 Explore Fannie Mae’s first-time homebuyer resources to learn about low-down-payment options.

5. Don’t Skip the Home Inspection

A home may look perfect on the surface—but could hide major issues like foundation damage, roof problems, or outdated plumbing.

Always hire a licensed, independent home inspector to evaluate the property. It’s one of the most important protections you have as a buyer—and it can give you leverage in negotiations.

6. Choose the Right Location

You can change paint colors and fixtures—but not your neighborhood. Think about:

• Commute times
• School districts
• Local amenities
• Long-term growth potential

Even if you don’t have kids, buying in a desirable school district can help your home hold value.

Final Tip: Work With a Trusted Team

Surround yourself with a great real estate agent, a responsive lender (LIKE ME! 😊), and other professionals who can guide you. Don’t be afraid to ask questions—it’s our job to help you make informed decisions.

Buying your first home is a journey—but with the right plan and support, you’ll feel empowered every step of the way. Ready to get pre-approved? Let’s GO!