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Look, I'm gonna be straight with you—I almost didn't write this article. It's late Thursday afternoon, my daughter just woke up from her nap, and honestly? I'm tired of seeing these cookie-cutter home buying guides that skip over the stuff people actually struggle with. But then I thought about the borrower I talked to yesterday who'd been Googling "how to buy a house" for six months and still felt totally lost. So here we are.
Buying a house in 2025 isn't quite like it was even two years ago. The market's doing this weird thing where inventory's up in some areas but prices are still climbing in others, and don't even get me started on how confusing the interest rate situation has become. I've been in this industry since I was 18, and I can tell you—there's never been a "perfect" time to buy a home. There's just your time, whenever that happens to be.
This guide walks through 15 essential steps (yes, I added two more than most guides because they're that important). I'm not gonna sugarcoat it—this process takes work. But I've also seen thousands of people make it to closing day, and trust me, you can do this too.
Before you start browsing Zillow at midnight—yeah, I know you're doing it—we need to have an honest conversation about whether you're ready to buy. Not whether you want to buy (that's the easy part), but whether your financial situation can handle what's about to happen.
Here's what lenders look at, and more importantly, what you should look at for yourself:
Lenders want to see steady income, preferably two years' worth at the same job or in the same field. Now, I say "preferably" because there are exceptions—I've helped plenty of people who switched jobs for higher pay or who have seasonal income patterns. But the general rule is that consistent income makes everything easier.
Think about it from a practical standpoint, not just a lender's perspective. A mortgage payment happens every single month for the next 15 or 30 years. If your income's bouncing around like a pinball, that's gonna stress you out even if a lender approves you.
According to data from the Consumer Financial Protection Bureau, mortgage shoppers who apply for loans save an average of $300 annually by comparing offers—but you've gotta be in a position to qualify first (CFPB, 2025).
This one trips people up constantly. Your DTI is just the percentage of your monthly gross income that goes toward debt payments. So if you make $5,000 a month before taxes and you've got $1,500 in debt payments (car loan, student loans, credit cards, etc.), your DTI is 30%.
Most lenders want to see a DTI of 43% or less, though some programs allow higher ratios. But here's where I'm gonna give you advice that goes beyond what lenders require—if your DTI is pushing 43%, you might technically qualify, but you're gonna feel house poor real quick. I've seen it happen. Not gonna lie, it's stressful.
There's this temptation to max out what you can borrow, especially in markets where homes are expensive. But borrowing the absolute maximum you qualify for often means sacrificing every other financial goal you have. Want to take a vacation? Too bad. Need a new car? Better hope nothing goes wrong with your current one. Your kid wants to do travel soccer? Get ready for some uncomfortable conversations.
Let's talk about credit scores without the usual fear-mongering. Yes, your credit score matters. Yes, a higher score gets you better rates. But no, you don't need an 800 score to buy a house.
Here's the breakdown based on current 2025 lending standards:
The difference between a 680 score and a 740 score might cost you maybe a quarter point in interest rate. On a $350,000 loan, that's roughly $60 per month. Not nothing, but also not the end of the world if you're otherwise ready to buy.
I had a borrower last month who'd been obsessing over getting their score from 685 to 720 before applying. They waited eight months. Know what happened to home prices in their market during those eight months? They went up 4.3%. So they saved maybe $40 a month in interest but now needed an extra $15,000 for the same house. Sometimes waiting isn't the smart move.
Okay, so this is where things have gotten really interesting in 2025. The old "you need 20% down" advice is basically dead for most first-time buyers, and honestly, it's been dying for a while.
According to HUD's National Homeownership Month 2025 report, FHA has insured mortgages for over 140,000 first-time homebuyers since January 2025 alone, and the majority of those buyers put down less than 5% (HUD, June 2025).
Now, here's the thing about putting down less than 20%—you'll typically pay for mortgage insurance. On a conventional loan, that's PMI (private mortgage insurance). On an FHA loan, it's MIP (mortgage insurance premium). Is it ideal? No. Is it a deal-breaker? Also no.
Let me give you a real example. I'm working with a couple right now who could wait another three years to save up 20% on a $400,000 home, or they could buy now with 5% down. If they wait, and if prices increase even 3% annually (which is conservative based on current trends), that same house costs $424,872 in three years. Plus they'd pay maybe $45,000 in rent during that time. Meanwhile, buying now with PMI costs them about $200 a month in mortgage insurance, but they're building equity instead of paying a landlord.
The math isn't always as simple as "bigger down payment = better decision." Sometimes it is. Sometimes it isn't.
This is where people's budgets fall apart, so pay attention. You don't just need money for your down payment—you also need 3-6% of the purchase price for closing costs. On a $350,000 home, that's anywhere from $10,500 to $21,000.
What counts as closing costs? Basically everything involved in actually transferring the property to you:
Some of these you can negotiate. Some you can't. Some sellers will cover part of closing costs as an incentive, especially in slower markets. But you need to have this money available.
Between you and me? This is the part nobody talks about enough. Everyone focuses on the down payment, but I've seen deals fall apart at the last minute because buyers didn't budget for closing costs properly.
Let's say you meet all the basic requirements from Step 1. Cool. Now comes the part where we figure out what you can actually afford—not what a lender will let you borrow (those can be very different numbers), but what makes sense for your life.
I've been doing this for years, and I can't tell you how many times I've had to have the "just because you qualify doesn't mean you should" conversation. Lenders look at numbers. They don't know that your in-laws visit twice a year and you need a guest room, or that your car has 160,000 miles and might need replacing soon, or that you're planning to have kids in the next few years.
The traditional advice is that your housing payment shouldn't exceed 28% of your gross monthly income, and your total debt shouldn't exceed 36%. So if you make $6,000 a month, your housing payment should stay under $1,680.
This rule is... fine. It's a starting point. But it doesn't account for things like:
I talked to someone yesterday in the DFW area making $90,000 a year. According to the 28% rule, their housing payment should be around $2,100. Know what $2,100 gets you here for a mortgage payment? Not much, and definitely not in the neighborhoods where they wanted to live and work. Sometimes the rules just don't match reality.
Your mortgage payment isn't your only housing cost. Rookie mistake I see constantly—people calculate what they can afford based solely on principal and interest, then get blindsided by everything else.
Your actual monthly payment includes:
Let me walk through a real example. Say you're buying a $325,000 home in a decent suburb:
But wait, we're not done. That house needs maintenance. Maybe the HVAC dies ($6,000). Maybe the roof needs replacing in five years ($12,000). The water heater is 10 years old and on borrowed time. You need to keep money in savings for this stuff.
So really, you should be planning for more like $3,100-$3,300 per month in housing costs when you average it out. That's a big difference from the $1,952 people focus on when they're shopping.
Online calculators are useful—AmeriSave has a solid affordability calculator that takes most of these factors into account. But calculators can't know your full situation. They don't know you're planning a wedding next year, or that you want to go back to school, or that your industry might be facing layoffs.
Use the calculator to get a ballpark range. Then ask yourself: "If my income dropped by 20% tomorrow, could I still afford this house?" If the answer is "absolutely not," you might be stretching too thin.
Okay, you've done the math and you know roughly what you need. Now comes the unglamorous part—actually saving the money. Not gonna lie, this is where a lot of people get stuck for years.
The median first-time homebuyer in 2025 is now 38 years old, up from 35 just two years ago, according to recent National Association of Realtors data. Know why? Because saving for a down payment and closing costs takes forever when you're also paying rent and student loans and trying to live your life (NAR, 2025).
If you're planning to buy within the next 1-3 years, keep your down payment money somewhere safe and liquid. High-yield savings accounts are paying decent interest in 2025—not amazing, but better than the 0.01% traditional banks offer.
Your timeline matters here. Don't put money you need in 18 months into stocks or crypto or your cousin's "sure thing" investment opportunity. You need this money to actually be there when you're ready to buy. The last thing you want is to find the perfect house and then realize your down payment money lost 20% value because the market had a bad month.
Here's something a lot of people don't know about—almost every state has down payment assistance programs. Some are grants (free money). Some are second mortgages with low or zero interest. Some are forgivable loans that disappear if you stay in the home for a certain number of years.
These programs typically have income limits and may restrict which areas you can buy in, but they're worth researching. I've seen them provide anywhere from $2,500 to $25,000 in down payment help. That's real money that can make the difference between buying now and waiting another two years.
If you're fortunate enough to have family members willing to help with your down payment, that money is usually acceptable to lenders. The catch is you need what's called a gift letter—basically a signed statement saying the money is a gift, not a loan that needs to be repaid. Lenders care about this because they need to know your true debt obligations. If your parents "gift" you $20,000 but you've secretly agreed to pay them back, that's technically fraud. Don't do that. Be honest about where your money comes from.
Between you and me, about 30% of first-time buyers get some kind of family help, so don't feel weird about it if that's your situation. The wealth gap between renters and homeowners keeps growing, and family help is one of the ways that gap perpetuates—for better or worse.
Alright, let's talk about the different types of loans out there. This section could get boring real fast, but it's actually pretty important because choosing the wrong loan type can cost you thousands of dollars or prevent you from buying at all.
These are your standard, non-government-backed mortgages. Most people end up with conventional loans if they've got decent credit (620+) and can put at least 3% down.
Pros:
Cons:
If you're a relatively strong borrower—decent credit, stable income, some savings—conventional is usually your best bet.
Federal Housing Administration loans were designed specifically for people who might not qualify for conventional loans. They're super popular with first-time buyers.
Pros:
Cons:
I work with a ton of FHA buyers, and honestly, there's nothing wrong with these loans. People sometimes feel like they're "settling" for an FHA loan, but that's nonsense. It's a tool that helps you buy a home sooner rather than later.
According to HUD's latest data, over 7 million households currently live in homes financed by FHA-insured mortgages. That's a lot of people who made FHA work for them (HUD, June 2025).
If you're a veteran, active-duty military, or qualifying spouse, VA loans are hands-down the best mortgage product available. I'm not exaggerating.
Pros:
Cons:
If you qualify for a VA loan and don't use it, we need to have a serious talk. This benefit was earned through your service—take advantage of it.
USDA loans (backed by the U.S. Department of Agriculture) are designed for rural and suburban areas. Despite what you might think, "rural" covers a lot more area than you'd expect—about 97% of U.S. land mass.
Pros:
Cons:
I've had buyers write off USDA loans assuming they're only for farms, then be shocked to learn their suburban neighborhood qualifies. Worth checking—the USDA eligibility map is online.
Okay, this is where things start getting real. Preapproval is when a lender actually reviews your financial documents and tells you how much they'll lend you. This is different from prequalification, which is basically just an estimate based on what you tell them.
In today's market, showing up to look at homes without a preapproval letter is like showing up to a job interview without a resume. Sure, maybe they'll still talk to you, but you're immediately at a disadvantage.
Sellers want to know you're serious and can actually close the deal. If they're choosing between your offer and another offer, and you don't have a preapproval letter, guess whose offer gets accepted? Not yours.
Get ready to share basically your entire financial life. Lenders typically want:
If you're self-employed, add:
Self-employment makes everything more complicated, not because lenders don't want to work with you, but because verifying income is trickier. If your income fluctuates significantly year to year, they'll probably average your last two years.
Some lenders (including AmeriSave) offer what's called a Certified Approval, which is even more thorough than standard preapproval. An underwriter actually reviews your file before you make an offer. This is the gold standard because it eliminates a lot of the uncertainty that comes up during the actual mortgage process.
In competitive markets, Certified Approval can be the difference between getting your offer accepted or losing out to another buyer. Sellers know that a loan that's already been reviewed by an underwriter is way more likely to actually close.
How Long Does Preapproval Last?
Most preapproval letters are good for 60-90 days. After that, the lender will need to pull your credit again and verify your financial situation hasn't changed. During your preapproval period, don't do anything that changes your financial profile—no buying cars, opening new credit cards, changing jobs, or making large unexplained deposits.
Seriously, I've seen people blow up their preapproval by buying a new car "because we'll need something more reliable once we move." Then their DTI ratio goes up, and suddenly they don't qualify for the same loan amount anymore. Wait until after closing for major purchases.
Your real estate agent is going to be your partner throughout this whole process, so choosing the right one matters. The good news is that as a buyer, you typically don't pay your agent's commission—the seller does. So you get professional representation at no direct cost to you.
I'll be honest—not all agents are created equal. Some are phenomenal, some are... less phenomenal. Here's what you want:
Local Market Knowledge: Your agent should know the neighborhoods you're interested in. Not just "oh yeah, that's a nice area," but actual details about school districts, property tax rates, HOA rules, recent sales, and which streets flood when it rains.
First-Time Buyer Experience: If this is your first home, you want someone who's good at explaining things and doesn't get frustrated answering the same question three different ways. Buying a house has a lot of jargon and moving parts—you need someone patient.
Responsiveness: When you find a house you want to see, you probably want to see it today, not next Tuesday. In hot markets, homes can go under contract within hours. Your agent needs to respond quickly.
Negotiation Skills: This matters more than people realize. A good agent can save you thousands (or tens of thousands) in negotiations. A mediocre agent just presents your offer and hopes for the best.
Compatibility: You're going to be spending a lot of time with this person, including possibly some stressful moments. Make sure you actually like them and feel comfortable asking questions.
Between you and me, my wife is a real estate agent, so I see both sides of this relationship. The best agents genuinely care about helping you find the right home, even if it takes longer. The worst ones just want to close a deal and move on to the next one.
Don't hire the first agent you meet. Talk to 2-3 agents before making a decision. Ask them:
Good agents won't be offended by these questions. Bad agents will get defensive.
Okay, now we get to the part everyone's excited about—actually looking at homes. This is when all that preparation starts to pay off because you know your budget, you're preapproved, and you've got an agent to help you.
Before you start looking, sit down (preferably with anyone you're buying with) and make a list of must-haves, nice-to-haves, and absolute deal-breakers. Be realistic. Everyone wants a 5-bedroom house with a pool and a three-car garage for $200,000, but that's not happening in most markets.
Must-Haves (the non-negotiables):
Nice-to-Haves (you'd love these but can be flexible):
Deal-Breakers (things that will make you walk away):
Give your agent this list. It helps them filter properties and not waste your time showing you houses that won't work.
Most people start by scrolling through Zillow, Realtor.com, or similar sites. That's fine—it's how everyone shops now. But photos can be deceiving. I've seen listings where the photographer must have used magic because the house looks amazing online and terrible in person. I've also seen the reverse—homes that photograph badly but feel great when you walk through.
Plan to see homes in person before making any offers. Your agent can usually schedule multiple showings in one day, which makes the process more efficient.
How Many Homes Should You Look At?
There's no magic number, but most people look at 8-15 homes before making an offer. Some people find "the one" on the first showing. Others look at 30+ houses over several months.
Don't feel rushed, but also don't fall into analysis paralysis where you're endlessly searching for the perfect house. Perfect doesn't exist. Good enough with great bones and good location? That exists, and that's what you're looking for.
You found it. The house. You walked through and could picture your furniture there, and maybe you stood in what would be your home office imagining how you'd set it up. Now comes the nerve-wracking part—making an offer.
Your agent will help you put together an offer package that includes:
Purchase Price: Obviously the most important number. Your agent will show you comparable sales (comps) in the neighborhood to help determine a fair offer price. In competitive markets, you might offer over asking. In slower markets, you might offer under.
Earnest Money Deposit: This is typically 1-3% of the purchase price and shows the seller you're serious. This money gets held in escrow and goes toward your down payment and closing costs if the sale goes through. If you back out for reasons not covered by contingencies, you might lose this money.
Financing Contingency: This says that if you can't get final mortgage approval, you can back out without losing your earnest money. Some buyers waive this in competitive markets, but that's risky unless you're paying cash.
Inspection Contingency: Gives you the right to get the home inspected and either negotiate repairs, ask for credits, or back out if major problems are found.
Appraisal Contingency: Protects you if the home appraises for less than the purchase price. Without this, you'd have to come up with the difference in cash or risk losing your earnest money.
Closing Date: When you'll actually take ownership. This is often 30-45 days from offer acceptance but can be negotiated.
Other Contingencies: Maybe you need to sell your current home first. Maybe you want a home warranty included. All this gets negotiated.
If homes are flying off the market in your area, you might need an aggressive offer strategy—offering at or above asking price, maybe waiving some contingencies (talk to your agent about the risks), and including an escalation clause that automatically increases your offer if someone bids higher.
If the market's slower and homes are sitting for weeks, you might offer below asking and negotiate harder on things like closing costs and repairs.
Your agent should know what's working in your specific market right now. Markets vary wildly even within the same metro area—some neighborhoods are hot, others are cooling.
This is where things get stressful. You make an offer, then find out there are 4 other offers on the same house. Now what?
Some options:
Losing out on houses sucks. I'm not gonna pretend it doesn't. But getting into a bidding war and overpaying by $50,000 because you're emotional also sucks. Sometimes the best move is to walk away and keep looking.
Don't be surprised if the seller doesn't accept your first offer. They might counter with a higher price, different closing date, or modified terms. You can accept their counteroffer, counter back with new terms, or walk away.
This negotiation dance can go back and forth multiple times. Stay patient and don't take it personally—this is business, not a personal rejection.
Okay, so your offer was accepted. Congrats! Now comes one of the most important steps that too many buyers try to skip—the home inspection.
A home inspection typically costs $300-$500 depending on the size and location of the home. That might seem like a lot when you're already hemorrhaging money on appraisals and applications but trust me—a good inspection can save you from buying someone else's disaster.
A professional inspector will examine basically everything:
They'll give you a detailed report (usually 20-50 pages) documenting everything they found, complete with photos. Some issues are minor ("the bathroom exhaust fan is noisy"). Others are major ("the foundation has significant cracks and settling").
Always, always, always attend the home inspection. The written report is useful, but walking through with the inspector while they explain things is invaluable. They'll show you where the main water shutoff is, how to change the HVAC filter, quirks about the house, and potential future issues to watch.
I did my own home inspection a few years ago when we bought our condo—different situation since it's a high-rise, but still. The inspector found some electrical issues that I never would have noticed. We got the seller to fix them before closing. That peace of mind was worth way more than the $450 it cost.
After you get the report, you typically have 5-10 days (depending on what was in your offer) to decide how to proceed. Your options:
Accept the property as-is: Maybe the issues found are minor or things you're willing to deal with. You move forward without asking for anything.
Negotiate repairs: Ask the seller to fix specific items before closing. They might agree to some or all repairs, or they might refuse.
Ask for credits: Instead of having the seller make repairs, ask for money off the purchase price or closing cost credits that you can use to fix things yourself. Sometimes sellers prefer this because they don't have to coordinate contractors.
Renegotiate the price: If major issues were found, you might ask for a lower purchase price to account for the needed repairs.
Walk away: If the inspection reveals deal-breaking problems and the seller won't negotiate, you can back out (assuming you have an inspection contingency) and get your earnest money back.
Not every issue on an inspection report is worth negotiating over. Inspectors are paid to find problems, so they're thorough—sometimes too thorough. Your agent can help you sort out what's actually important.
Major Issues (definitely negotiate):
Minor Issues (probably accept as-is):
Between you and me, some buyers lose deals by trying to negotiate every tiny thing on the inspection report. Pick your battles. Focus on the expensive stuff that actually matters.
While you're worrying about the inspection, the lender is worrying about the appraisal. An appraisal is when a licensed appraiser assesses the home's value to make sure it's actually worth what you're paying for it.
Lenders require this because they're using the home as collateral for your loan. They need to know that if you default and they have to foreclose, they can sell the property and recoup their money.
An appraiser will visit the home, measure it, take photos, check condition, and note features like number of bedrooms, bathrooms, garage spaces, etc. Then they'll pull comparable sales (similar homes that sold recently in the area) and adjust for differences.
For example, if your home has 3 bedrooms and 2 baths, the appraiser looks for similar 3-bed/2-bath homes that sold in the last 3-6 months nearby. If one comp sold for $340,000 but didn't have a garage and yours does, they'll add value for that difference.
The entire process takes a few weeks from order to receiving the final report. You don't attend the appraisal like you do the inspection.
This is the scenario everyone dreads. You offer $350,000 on a house, but it appraises at $335,000. Now what?
The lender will only loan you money based on the appraised value, not your purchase price. So unless you have an appraisal contingency (you should), you've got several options:
Renegotiate the price: Ask the seller to lower the price to match the appraisal. In a slower market, they might agree. In a hot market, they might tell you to pound sand.
Bring more cash: Come up with the $15,000 difference out of pocket. This obviously only works if you have the money.
Meet in the middle: Negotiate a price between the appraised value and original price, with you bringing some extra cash and the seller coming down some.
Challenge the appraisal: If you think the appraisal is wrong, you can contest it with different comps. This works occasionally but not often.
Walk away: If you have an appraisal contingency and can't work it out, back out of the deal and get your earnest money back.
According to recent data, low appraisals have become more common in 2025 as markets cool in some areas while prices remain high. It's frustrating, but appraisals exist for a reason—to keep you from overpaying (CFPB, 2025).
Some buyers in competitive markets waive the appraisal contingency or agree upfront to cover any appraisal gap. This makes your offer more attractive to sellers but puts you at financial risk if the home doesn't appraise.
Only do this if you have significant cash reserves and you're confident in your offer price. Don't waive this contingency just because everyone else is—that's how people end up financially stressed.
While all this inspection and appraisal stuff is happening, your loan is going through underwriting. This is where actual humans at the lender review every detail of your financial life to make a final decision on your loan.
Underwriters verify everything you submitted during preapproval, plus they'll:
They might ask for additional documentation—updated bank statements, explanation letters for deposits, proof that old debts were paid off, etc. Respond quickly to these requests. The faster you provide what they need, the faster your loan closes.
Don't be surprised if underwriters come back with conditions—things they need before approving your loan. Common conditions include:
Some conditions are frustrating and feel invasive, but they're part of the process. Just comply and move on.
When underwriting is complete and all conditions are satisfied, you'll get "clear to close" status. This means you're approved and can schedule closing. Usually happens 3-5 days before your actual closing date.
Between preapproval and clear to close, do not:
All of these things can blow up your loan approval. I've seen it happen multiple times. People get impatient, buy furniture for their new house on credit, and suddenly their DTI ratio is too high. Wait until after closing for anything majo
Three business days before closing, you'll receive your Closing Disclosure. This is a standardized form that details every single aspect of your loan and what you'll pay at closing.
The Closing Disclosure is 5 pages of important information:
This document is your opportunity to catch mistakes before it's too late. Compare it to the Loan Estimate you received when you first applied. The numbers should be similar—some changes are normal, but big differences need explanation.
Interest rate change: Your rate should be locked, so if it's different, find out why immediately.
Higher closing costs: Some costs can increase slightly, but if your total closing costs are way higher than estimated, ask questions.
Wrong loan amount: Make sure the numbers match what you agreed to.
Incorrect payment calculations: Check that principal, interest, taxes, and insurance are calculated correctly.
Unexpected fees: If there are charges you weren't expecting, ask your lender to explain them.
You have three days to review this document. Use that time. Don't just skim it and sign—actually read it. I know it's boring, but so is paying $5,000 more in closing costs because you didn't catch an error.
The day before closing (or morning of closing if that's the only option), do a final walk-through of the property. This is your last chance to make sure:
I once had a buyer discover during the final walk-through that the seller had taken all the light fixtures, even though they were supposed to stay. Had they not done the walk-through, they wouldn't have known until after closing when they had no recourse. The walk-through gave them leverage to negotiate a solution.
If you find issues during the walk-through, you have a few options:
Don't skip the final walk-through just because you're excited or busy. It takes 30 minutes and can save you a lot of headaches.
Closing day! This is the moment you've been working toward for months. You'll meet with a closing agent (sometimes called an escrow officer or settlement agent), sign approximately 10,000 pages of documents (okay, more like 50-100, but it feels like more), and officially become a homeowner.
Required items:
Your lender will tell you the exact amount needed for closing. Wire this money at least 24 hours before closing if possible. Cashier's checks work too, but verify with your closing agent first.
You'll sit down with the closing agent who will walk you through each document and explain what you're signing. The main documents include:
The Promissory Note: Your actual promise to repay the loan. This is the most important document—it states your obligation to pay back the money you borrowed.
The Mortgage/Deed of Trust: This secures the note by giving the lender a claim on the property if you don't pay. In some states it's called a mortgage, in others a deed of trust. Same basic concept.
Closing Disclosure: You'll sign to acknowledge you received and reviewed it.
Settlement Statement: Itemizes all the money changing hands—what the seller gets, what you're paying, what goes to the lender, taxes, fees, etc.
Title Documents: Transfer ownership from the seller to you.
Various other forms: Acknowledgments, disclosures, IRS forms, etc.
The whole process takes 1-2 hours depending on how complicated your loan is and how many questions you ask. Ask questions! This is not the time to be shy. If you don't understand something, speak up.
After signing everything and the closing agent confirms all money has been received and recorded, you'll get the keys to your new home. Congratulations—you're officially a homeowner!
Some closings happen in the morning, some in the afternoon. If you close early in the day, you might be able to move in that day. If you close later, you'll probably move in the next day. Coordinate with your agent and the sellers on timing.
Okay, so you've closed and moved in. You might think the hard part is over. In some ways it is—you're done with lenders and underwriters and all that. But homeownership comes with ongoing responsibilities that renters don't have to deal with.
Your first mortgage payment is typically due about 30-45 days after closing. Set up automatic payments if possible—missing a mortgage payment tanks your credit score fast and starts you down a bad path.
Keep track of your escrow account if you have one. This is where your lender holds money for property taxes and homeowners insurance. They'll send you annual statements showing the balance and whether you need to adjust your payment.
If you didn't have one before, you need one now. Aim for 3-6 months of expenses saved up. Home repairs are expensive and unpredictable. The water heater will die at the worst possible time. The AC will break during a heat wave. The roof will start leaking during heavy rain. That's just how it goes.
Experts typically recommend budgeting 1-2% of your home's value annually for maintenance and repairs. So if your home cost $300,000, plan to spend $3,000-$6,000 per year on upkeep. Some years you'll spend less, some years way more, but it averages out.
Regular maintenance prevents bigger problems down the road:
This stuff isn't glamorous, but it keeps your home in good shape and protects your investment. A well-maintained $300,000 home in 10 years is worth more than a neglected one.
Your home will likely appreciate over time (though not always—see 2008 for exceptions). As you pay down your mortgage and as the home's value increases, you build equity. This equity can be used later for things like:
Don't think of your home just as a place to live—it's also a savings account that (hopefully) grows in value. That's one reason homeowners have significantly higher net worth than renters over time, according to Federal Reserve data.
Keep an eye on interest rates. If rates drop significantly (like 1% or more below your current rate), it might make sense to refinance. You'll pay closing costs again, but you could save thousands in interest over the life of your loan.
Also consider refinancing if you want to:
But don't refinance just because rates dropped a tiny bit. Run the numbers to make sure you'll actually save money after accounting for closing costs.
Look, buying a house in 2025 is complicated. It costs a lot of money. It takes months of work. There will be stressful moments and paperwork that makes you want to give up. But at the end of it all, you own a home. That's pretty incredible when you think about it.
I started in this industry at 18—barely old enough to understand what a mortgage even was, honestly. Over the years, I've helped thousands of people buy homes, and every single closing feels special. People cry, they celebrate, they thank everyone involved, they take photos in front of their new house. It never gets old.
The American homeownership rate sits at around 66% right now, which means millions of people have already figured this out. You can too. Start with Step 1—honestly assess your financial readiness. Then work through each subsequent step methodically. Get help from professionals—lenders, agents, inspectors, lawyers when needed. Ask questions when you don't understand something. Don't rush into decisions out of fear or pressure.
And remember, buying your first home doesn't have to be your forever home. It just needs to be a good decision for your current situation. Maybe you'll stay for five years, build some equity, and then upgrade. Maybe you'll be there for thirty years and pay off the mortgage. Either way, you're building wealth instead of paying rent.
If you're ready to start this journey, AmeriSave can help. We work with first-time buyers every day, and we know how to navigate all the scenarios and complications that come up. My team genuinely cares about finding the right loan for your situation—not just getting you approved for the biggest amount possible, but matching you with a loan that makes sense for your life.
Your homeownership journey starts with a single step. Take it.
Realistically, you need 3-5% for down payment plus another 3-6% for closing costs. So on a $300,000 home, that's roughly $18,000-$33,000 total. Some down payment assistance programs can help reduce this amount, and VA/USDA loans eliminate the down payment requirement entirely if you qualify. But don't forget you also need reserves—most lenders want to see at least 2 months of mortgage payments in savings after closing.
For conventional loans, 620 is typically the minimum, though some lenders will go as low as 600. FHA loans can work with scores as low as 580 (or even 500-579 if you put 10% down). VA loans have no official minimum, though most lenders want 580+. USDA loans usually require 640+. That said, the higher your score, the better your interest rate. There's a significant rate difference between a 620 score and a 740 score—we're talking maybe half a percent, which adds up to real money over 30 years.
Depends on how long you plan to stay in the home. Discount points cost 1% of your loan amount and typically lower your rate by about 0.25%. On a $300,000 loan, that's $3,000 upfront to save maybe $40-50 per month. It takes roughly 5-7 years to break even, so only pay points if you're confident you'll stay in the home that long. If you might move in 3-4 years, skip the points and keep that money for other uses.
Depends on your financial situation and goals. A 15-year mortgage has a much higher monthly payment but you'll pay way less interest over the life of the loan and build equity faster. A 30-year mortgage has a lower monthly payment, giving you more flexibility and breathing room in your budget. Most first-time buyers go with 30-year because the lower payment is more manageable. You can always make extra payments toward principal if you want to pay it off faster, which gives you the best of both worlds—the security of a lower required payment but the option to pay more when you can afford it.
The "perfect time to buy" doesn't exist—if you wait for perfect conditions, you'll wait forever. That said, 2025 has some interesting dynamics. Inventory has increased in many markets compared to 2023-2024, which is good for buyers. Interest rates have stabilized but remain elevated compared to the 2020-2021 era. Home prices continue to rise in most areas, though at a slower pace. According to HUD's latest housing market summary, the national median home price was $426,600 as of May 2025, up about 3% year-over-year. The real question isn't "is 2025 good?" but "are you ready?" If your finances are stable, you have a down payment saved, and you plan to stay in the area for at least 5 years, then it's a good time for you specifically.
Focus on making your offer as attractive as possible beyond just price. Get a verified approval or strong preapproval letter. Be flexible on closing dates to match seller preferences. Minimize contingencies where you can safely do so (but don't put yourself at financial risk). Consider an escalation clause that automatically increases your offer up to a certain limit if other bids come in. Write a personal letter to the seller if appropriate (though some agents think these are overused). Offer to pay some or all closing costs. Be ready to move fast—houses with multiple offers often have short timelines. But also know when to walk away. Getting the house at any cost can leave you financially stressed or overpaying significantly.
Being self-employed doesn't disqualify you from buying a home, but it does make the documentation more intensive. Lenders typically want two years of business tax returns plus profit and loss statements for the current year. They'll average your net income (after business expenses) over two years to calculate what you qualify for. If your income fluctuates significantly, this can work against you. Some strategies to improve your chances: keep business and personal finances clearly separated, work with an accountant to optimize your tax returns (though taking too many deductions can lower your qualifying income), and save for a larger down payment to offset perceived risk. Self-employed borrowers often benefit from working with lenders who specialize in non-traditional income documentation.
This is the question everyone asks and the answer is frustratingly individual. Buying makes sense if you plan to stay in the area for at least 5 years (preferably longer), your job and income are stable, you have a down payment saved, and you're ready for the responsibilities of homeownership. Renting makes sense if you value flexibility, aren't sure where you want to live long-term, don't have a stable income yet, or can't afford the costs of homeownership. Financially, homeownership typically comes out ahead over the long term, but not always. Run the actual numbers for your situation. The wealth gap between homeowners and renters is real and growing—the median homeowner has roughly 40 times the net worth of the median renter, according to Federal Reserve data. That's not because homeowners are inherently better with money; it's because forced savings through mortgage payments builds wealth over time.
The biggest mistake I see is buying at the absolute maximum of what you qualify for. Just because you can borrow $400,000 doesn't mean you should. Leave yourself room for life—unexpected expenses, job changes, wanting to have kids, literally anything. Other common mistakes include: skipping the home inspection to save money (penny wise, pound foolish), not shopping around for mortgage rates (costs you thousands over the life of the loan), buying in a school district that doesn't matter to you just because it's "good" (you're paying premium prices for something you're not using), and making big purchases right before or during the mortgage process. I've watched people lose loan approval because they bought a car two weeks before closing. Also, don't rely on someone else's opinion of what you should buy—your parents, your friends, whoever. They're not the ones making the mortgage payment every month.
This happens a lot—roommates, partners who aren't married, friends, family members. It can work, but you need solid legal agreements in place about what happens if someone wants to sell, if someone stops paying their share, if your relationship changes, or if someone dies. Get a lawyer to draft a co-ownership agreement before you buy. Decide upfront how ownership percentages work (50/50 or based on down payment contribution?), how expenses are split, how decisions get made, and what the exit strategy looks like. Both parties need to be on the loan application, and both will be equally responsible for the entire payment—not just "your half." If one person stops paying, the lender comes after both of you and both credit scores suffer.
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