Buying Your First Home

A home is the largest purchase most people ever make, and the gap between "I think I can afford this" and "I can actually afford this" is where first-time buyers get hurt. This guide walks the distance between deciding to buy and getting the keys.

The true cost of homeownership (beyond the mortgage)

The mortgage payment is the floor, not the cost. Budget for the full picture: property taxes, homeowners insurance, private mortgage insurance (PMI) if you put down less than 20%, and ongoing maintenance — a common rule of thumb is about 1% of the home's value per year. Add HOA dues where they apply, plus one-time closing costs that typically run a few percent of the purchase price. The all-in monthly number is what you actually need to afford.

How lenders evaluate you: DTI, credit, reserves

Lenders look at three things. Debt-to-income (DTI) — a common guideline keeps housing costs under about 28% of gross income and total debt payments under about 36%, though some loan programs allow higher. Credit score — better scores unlock better rates; conventional loans generally want a mid-600s score or higher, while FHA loans go lower. Reserves — savings left after closing, often a few months of payments, that show you can weather a rough patch. Strengthen all three before you apply.

Down payment math: 3.5%, 10%, 20%

There's no single right number. FHA loans can go as low as 3.5% down, and some conventional programs start around 3–5%. Putting down 20% lets you skip PMI and lowers both the loan and the payment. The tradeoff is real: a smaller down payment lets you buy sooner but costs more over time in PMI and interest; a larger one costs less but takes longer to save.

Use the calculator to see the price range your income, debts, and down payment actually support.

Pre-approval vs. pre-qualification

These sound similar and aren't. A pre-qualification is a rough estimate based on numbers you state. A pre-approval is a lender's vetted commitment after reviewing your documents and credit — it tells you a real budget and signals to sellers that you're serious. Get pre-approved before you start touring homes.

Inspection, appraisal, and closing day

Three checkpoints stand between an accepted offer and the keys. The inspection is your protection — it surfaces problems you can negotiate on or walk away from. The appraisal is the lender's protection — the home has to appraise for enough to support the loan. Closing is where you sign, pay your down payment and closing costs, and take ownership. One rule throughout: keep your finances stable between pre-approval and closing — no new loans, big purchases, or job changes, which can sink the loan at the last minute.