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First-Time Home Buyers

Everything to prepare before buying your first home.

By Fountain Finances Editorial TeamUpdated

Get ready before you shop

Buying your first home goes more smoothly when your finances are prepared months in advance:

  • Check your credit reports and fix errors.
  • Lower your debt-to-income ratio by paying down balances.
  • Save for more than the down payment: closing costs, moving, furniture and repairs.
  • Keep your emergency fund intact after closing.
  • Avoid new credit applications during the process.
  • Conventional loans with low-down-payment programs from Fannie Mae and Freddie Mac.
  • FHA loans, which allow 3.5% down with a credit score of at least 580.
  • VA loans for eligible service members and veterans, often with no down payment.
  • USDA loans for eligible buyers in qualifying rural and suburban areas.

First-time home buyer programs

Your state housing finance agency is often the best starting point for down payment and closing cost assistance, below-market-rate mortgages and homebuyer education. The CFPB’s housing counselor search lists HUD-approved agencies that provide free or low-cost guidance.

Next steps

Find a comfortable price range with the home affordability calculator, estimate payments with the mortgage calculator and follow our step-by-step first-time home buyer guide.

Frequently asked questions

Who counts as a first-time home buyer?

Many programs define a first-time buyer as someone who has not owned a principal residence in the past three years, so previous owners may still qualify. Definitions vary by program.

Are there grants for first-time home buyers?

Many state housing finance agencies and local governments offer down payment assistance as grants, forgivable loans or low-interest second mortgages, usually with income and purchase price limits.

How much should I save before buying a house?

Plan for the down payment, closing costs, moving costs and an emergency fund that remains after closing. Saving only the minimum down payment can leave you vulnerable to early repairs.

Part of our Mortgage hub and our complete personal finance guide. Read our editorial standards.

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