A Guide to Buying Your First Home

The important thing is to focus on what you can control. By partnering with a local agent and a trusted lender, you can get a clear picture of what you can borrow, what your monthly payment would be, and how the rate impacts it.

Repairs: An inspection during the buying process gives you a clear look at the home's condition before you commit. If something is really nagging at you, your agent can ask the seller for a home warranty to cover major systems like HVAC.

Stretching your budget: A little bit of a stretch is normal, most first-time buyers cut back on extras for a while. But if you wouldn't have enough left over for gas and groceries, that's a sign to look at a different price point. As your career and income grow, that stretch gets easier.

When you rent, your payment goes to your landlord and it's gone. When you own, part of your payment comes back to you as equity, the wealth you build as your home appreciates and you pay down the loan.

First American compared renting and owning across four time periods (2006, 2015, 2019, and 2022) factoring in mortgage payments, taxes, insurance, repairs, and maintenance against the equity gained. In every period, renters lost money over time and homeowners gained it. The longer you own, the wider the gap.

2 out of every 5 Americans believe you need excellent credit to qualify for a mortgage. Not true. The median credit score for all buyers is 775, but the median score in the lowest 10% of buyers is around 650.

FICO itself says there's no single "cutoff score" used by all lenders. A portion of buyers are getting approved with scores in the 600s. If credit has been the reason you've been waiting, it might be time to take another look.

72% of people with student loans think their debt will delay buying a home. But according to NAR, 33% of first-time buyers had student loan debt and still qualified. Student loans are generally treated like any other debt on your credit report, such as credit cards or auto loans. If your income is steady and your finances are solid, homeownership can still be within reach.

80% of first-time buyers qualify for down payment assistance, but only 13% actually use it. The average program provides a benefit of roughly $18,000. Ask about what you may qualify for, the money may already be on the table.

Pre-approval means a lender has reviewed your income, assets, credit, debts, and savings, and told you how much they're willing to lend. It's a reality check for your search so you can shop with confidence.

• Clarity: Know what you can afford before falling in love with something out of reach
• Confidence: Sellers take pre-approved offers seriously
• Control: If rates drop, you're already a step ahead

Pre-approval doesn't mean you're buying tomorrow, it just means you'll be ready when the time comes. Most are good for 60-90 days and can be refreshed easily.

• Don't change bank accounts
• Don't apply for new credit or close any credit accounts
• Don't deposit large amounts of cash before speaking with your lender
• Don't co-sign loans for anyone
• Don't make any large purchases

Before doing anything financial in nature, talk to your lender first.

Fixer-uppers: Homes that need some work typically run about 29% less than move-in-ready options, a solid choice if you're handy or willing to invest in sweat equity.

Townhomes: Average townhome costs around $363K versus $446K for a detached single-family home, more room in the budget without giving up ownership.

Pooling resources: Buying with a friend or family member combines incomes and can help you qualify for more, while splitting the mortgage and bills.