The Real First-Time Buyer Checklist
Forget the generic advice. Here's what first-time buyers actually need to know — in the order you need to know it.
1. Know Your Real Budget (Not the Bank's Number)
Your lender will approve you for more than you should spend. A bank might say you can afford $450,000 — but that doesn't account for property taxes, HOA fees, insurance, maintenance (budget 1% of home value annually), and the fact that you still want to eat out occasionally.
Rule of thumb: Keep your total housing costs (mortgage + taxes + insurance + HOA) under 28% of your gross monthly income. On a $75,000 salary, that's about $1,750/month maximum.
2. Check Your Credit — Then Improve It
Your credit score directly controls your interest rate, which controls how much you pay over 30 years. The difference between a 680 and a 740 score can be 0.5% in rate — on a $300,000 loan, that's over $30,000 in extra interest over the life of the loan.
Minimum scores: Conventional: 620 · FHA: 580 (3.5% down) or 500 (10% down) · VA: No official minimum, most lenders want 620+
3. Save More Than You Think
Down payment is just the start. You also need closing costs (2-5% of loan amount), an emergency fund (3-6 months of housing costs), and move-in costs (movers, furniture, immediate repairs). On a $300,000 home with 5% down, plan for $25,000-$40,000 total.
Down payment assistance: Many states offer programs that cover part or all of your down payment. FHA loans require just 3.5% down. Conventional loans can go as low as 3%.
4. Get Pre-Approved Before You Shop
Pre-approval is different from pre-qualification. Pre-qualification is an estimate. Pre-approval means a lender has verified your income, assets, and credit and will lend you a specific amount. In 2026's market, sellers often won't consider offers without a pre-approval letter.
5. Find the Right Agent (and Get Cash Back)
Your agent is the most important decision after choosing your home. A great agent saves you money through negotiation, protects you from bad deals, and guides you through a process designed by lawyers, not normal humans.
Pro tip: Use Welcome Home Referrals to get matched with a top agent — free. Buyers get 15% cash back at closing. On a $300,000 home, that's about $1,125 back.
6. Don't Skip the Inspection
A home inspection costs $300-$500. Skipping it can cost you $50,000. The inspection reveals hidden problems — roof damage, foundation issues, electrical problems, plumbing failures — that aren't visible during a showing. Never waive the inspection contingency to "win" a bidding war.
2026 Market Reality
The market has shifted. After years of extreme seller advantage, 2026 is moving toward balance. More inventory is hitting the market, sellers are more flexible on price and terms, and mortgage rates — while still above pandemic lows — are expected to continue their gradual descent.
What this means for first-time buyers: you have more negotiating power than any time in the last 5 years. Use it. Ask for closing cost credits, request repairs, and don't feel pressured to waive contingencies.
Loan Options for First-Time Buyers
- Conventional (3-5% down): Best rates for 740+ credit. PMI required below 20% down but can be removed later
- FHA (3.5% down): More forgiving credit requirements (580+). Higher insurance costs but easier to qualify
- VA (0% down): Available to veterans and active military. No PMI. Often the best deal if you qualify
- USDA (0% down): For eligible rural and suburban areas. Income limits apply. No down payment required