First-Time Home Buyer Guide

Buying a new home is an exciting milestone, but it’s also one of the most expensive purchases you’ll make. It’s important to educate yourself on how to buy a home for the first time so you can make informed decisions. 

Learn what you need to know about picking a real estate agent, finding loans to buy a home, and preparing for closing with our guide for first-time home buyers below. 

Key takeaways 

• If you’re planning to one day own a home, take the time now to prepare your finances by saving for a down payment and paying off current debts.  
• Calculate how much home you can afford based on your income, savings, and monthly debts to avoid overextending yourself.  
• Formalize your home buying budget by getting a mortgage preapproval from your chosen lender. 
• Partner with the right professionals to guide you through the first-time home buying process. A knowledgeable real estate agent and mortgage lender can simplify the process and advocate for your best interests. 
• Once your offer is accepted and the mortgage application is complete, the closing process typically takes 30 to 60 days before the home is yours. 

1. Get your finances ready 

There are a few things you should start doing early to make sure you’re ready for a mortgage:  

• Save up a down payment: You’ll typically need to save 3% to 20% of the purchase price. For a $400,000 home, 3% is $12,000. 
• Decrease your debt: You’ll find it easier to get approved and receive a lower mortgage rate if you can decrease your debt, so work on paying off any outstanding loans or credit cards now. 
• Improve your credit score: A good credit score will also help you get better rates and terms for a mortgage.  

Dive deeper: Learn more about how to get mortgage-ready with our in-depth guide. 

2. Know what you can afford 

A key step in any first-time home buyer guide is creating your budget before you start shopping. Start by looking at your income, savings, and monthly debts to figure out how much you can afford. 

A good guideline for estimating how much you should spend on a mortgage payment is to keep it under 30% of your gross monthly income. If you make $6,000 per month, your payment should ideally be $1,800 or less. That leaves room for food, transit, savings, and other priorities without stretching yourself too thin. 

Dive deeper: Plug in your numbers and learn how much home you can afford. 

3. Choose the right lender and loan type

Once you know your budget, you can shop around for the right mortgage. There are many different mortgage lenders; some specialize in certain types of home loans or offer different types of borrowers. That’s why it’s important to shop around to find the right mortgage for your needs.  

If you’re a veteran, for example, you may want to look for a lender who specializes in VA loans, while first-time home buyers might prefer a lender who’s familiar with FHA loans and down payment assistance programs.  

Dive deeper: Learn how to compare mortgage lenders and find the best one for you. 

4. Get a mortgage preapproval

A preapproval is a lender’s written offer of how much you can borrow, based on your income, debts, credit score, and other factors. It’s a detailed financial snapshot that gives you a clear price range and signals to sellers that you’re a serious buyer. 

Getting preapproval is an important step because it empowers you to shop with confidence and move fast when you find the right home. 

Dive deeper: Compare prequalified vs. preapproved to determine which one is right for where you are in the buying process. 

5. Choose a real estate agent 

With your finances in order and preapproval in hand, you’re almost ready to start shopping around. Experienced real estate agents can guide first-time home buyers through the entire purchase process, which can sometimes be confusing.  

Ask friends and family for their agent recommendations and look for someone with experience in the kinds of homes you’re interested in. They should be familiar with the local market and responsive to your questions. A good real estate agent will also help you craft strong offers to give you the best chance of securing the right home. 

Visit AmeriSave Realty to find an experienced real estate agent in your area. 

6. Shop around and make an offer

Real estate agents have access to the Multiple Listing Service (MLS) in your area and can help you pick out properties for sale that meet your needs. They can also arrange for you to tour the homes you’re interested in.  

When you find the right home, your real estate agent will help you write up a purchase offer, which proposes the terms of a potential sale. If the seller accepts your offer, you can move forward with finalizing your mortgage. 

7. Finalize your mortgage 

If your offer is accepted by the seller, your next step is to finalize your mortgage and get formal approval. Earlier in the home buying process you were preapproved for a mortgage, but that was not a commitment.  

Once your offer is accepted, provide the property details to your lender, including the address and purchase price. The lender will finalize your mortgage application and begin the underwriting process, which is where they verify that you have the ability to repay the loan.  

8. Prepare for closing 

With your offer accepted and mortgage approved, the finish line comes into view — but there’s still work to do before you get the keys to your first home. 

Your lender will schedule an appraisal to confirm the home’s value matches the purchase price. This protects both you and the lender from overpaying. Around the same time, you’ll arrange a home inspection to check for hidden issues — foundation cracks, aging HVAC systems, or roof damage — that could impact your decision to move forward. 

From there, the lender finalizes your loan details, the title is reviewed, and closing documents are prepared. During this time, you’ll also collect your down payment and earnest money, secure home insurance for the property, and buy title insurance. You’ll get a closing disclosure at least three days before signing, so you have time to review the final numbers. 

Dive deeper: See everything that happens and how long it takes during the closing process. 

9. Sign on the dotted line

The last step may be the most nerve-wracking, but it’s also the most exciting: the day you sign the paperwork and get the keys.  

On closing day, you’ll need to bring funds for your down payment and closing costs, such as a cashier’s or certified check. You’ll also need your driver’s license, proof of insurance, and any other documents your lender requires. A spare pen could come in handy, too, because you’ll be signing a lot of papers.  

Once closing is complete and you’ve signed the title, the home is yours. Gather your keys, order a pizza, and start unpacking! 

How AmeriSave supports first-time home buyers 

Sometimes you need more than a first-time home buying guide to feel confident in the process. After all, purchasing a home is a big decision, and it makes sense that you want to get it right. 

AmeriSave provides resources to answer your first-time home buyer FAQs, including AI tools and calculators to help you run the numbers and review personalized mortgage scenarios to find the best fit for you. When you’re ready to get started, our easy, digital process and Loan Experts help you move from planning to preapproval to purchase.  

Start your home buying journey today. 

Frequently asked questions 

How do I buy a home for the first time?

When you’re ready to buy a home, make sure you have down payment savings and a budget in mind. Shop around for a lender and get preapproved, then work with a real estate agent to find the right home. Once your offer is accepted by the seller, you can formally apply for your mortgage and then close on the home. 

What do I need to buy a home for the first time?

One of the best things you can do as a first-time home buyer is to build your credit, save for a down payment, and work with trusted professionals, like your mortgage lender and real estate agent. They’ll help you navigate the home buying process so you can get a great loan — and a great home — that fits your needs.