Follow these 12 steps to buy your first home: prepare finances, get pre-approved, hire an agent, find a property, secure your mortgage and close.
September 9, 2025
While it's an exciting and happy event, there are lots of moving parts to homeownership, which could make you feel confused or overwhelmed.
The National Association of Realtors found that first-time buyers spend about 2.5 months house hunting and look at seven different homes before finding the right one. With this much time and effort involved, having a clear plan becomes essential.
This article walks you through 12 essential steps to buying your first home, helping you approach homeownership with confidence and avoid costly mistakes.
Before you attend an open house or speak to a mortgage lender, pinpoint where you want to live. Consider:
Pro tip: Be sure to distinguish between needs and wants. Needs (like multiple bedrooms for a large family) are non-negotiable, while wants (like a pool) can be taken off the list if you find they don't fit your budget.
Buying a home involves an initial and ongoing financial commitment. If you can't afford to purchase a house in cash, you'll need to take out a mortgage. Your lender will need reasonable assurance that you can repay the debt as agreed.
Here's what you must get in order before applying for a home loan:
You should also create a budget that accounts for all home-related expenses, such as your:
If homeownership feels financially out of reach, research first-time homebuyer programs. These programs could help you cover your down payment or closing costs.
There are many types of mortgages to compare, so having an understanding of how they work will help you choose the right one for you. Here are the most common mortgage types:
Once you select your mortgage type, you must choose your loan term and interest rate structure:
"Your agent can make or break your homebuying experience, so select wisely. Try to find someone who specializes in your target market and has worked with first-time buyers," says Jonathan Ayala, licensed real estate agent and founder of Hudson Condos.
Ayala suggests asking potential agents about their:
"Chemistry matters too. You're going to spend a lot of time together, and you're going to be making big decisions. Look for someone who responds to your needs and isn't just trying to close a deal fast," says Ayala.
Pro tip: Don't forget to ask about your agent's commission structure. While you may be able to get the seller to cover this cost, it's good to be aware of the potential expense upfront.
A mortgage pre-approval, while not a guarantee of loan eligibility, will give you a good idea of how much you're qualified to borrow. Plus, having a pre-approval letter in hand shows sellers that you're a serious buyer, which can make your offer stand out in a competitive market.
To get pre-approved, you'll need to provide the lender with proof of your income, like pay stubs and tax returns, and authorize them to check your credit. Your pre-approval letter will be valid for 60-90 days, so don't complete this step until you're ready to go house shopping.
Pro tip: Your pre-approved amount is the most you can spend, but you don't have to use all of it. Your budget will tell you how much home you can comfortably afford.
There are many ways to discover potential homes, such as:
As you find homes that may work, ask your agent for property tours. While in each house, ask yourself: "Can I picture myself living here in five years? How does the feeling of this home compare to others I've looked at? The right one for you should tick your logical and emotional boxes," says Ayala.
Pro tip: Schachter recommends, "looking at the home at night, on weekends, during rush hour, and off rush hour [because doing so] gives you a sense of the noise and other variables that may make you decide if the home is right for you."
Once you've found "the one," have your agent submit an offer. If the seller accepts your offer, the home is considered under contract. You may need to put down an earnest money deposit of one percent of the sale price to show you're serious.
A real estate contract is binding, so ensure it contains protection clauses. You want to be able to back out of the sale and get your earnest money back if:
You also want the document to clearly define your closing date and what items stay in the house, such as appliances and furniture.
"If something is unclear, ask your agent or real estate attorney. Upfront clarity is better than expensive surprises later," says Ayala.
You don't need to get a mortgage from the same financial institution that pre-approved you. It's smart to shop around. Getting a few quotes can help you secure the best loan for your situation.
"Rates can vary by as much as 1% for the same loan, and this can amount to tens of thousands of dollars over the life of the loan. For an 'apples-to-apples' comparison, obtain quotes for the same term loan, without points, and within a few days of each other (if market rates are changing)," says Einberger.
The lender you choose will require you to prove your identity, income, debts, credit standing, and assets. Be sure to respond to their requests for information as soon as possible so you don't have to delay closing.
You should always get a home inspection—even if the seller has stated the home is for sale as-is. The inspection will cover the home's major components, such as the roof, foundation, electrical system, HVAC system, and plumbing.
Ultimately, you'll discover if the property needs extensive (and expensive) repairs before you commit to buying.
"Get recommendations for three different inspectors who act in the buyer's best interest. Remember that your realtor's recommended inspector may not be the best choice since they're incentivized to close the transaction. Ask to see inspection report templates to understand what you'll receive," advises Einberger.
Your lender will likely order a home appraisal before agreeing to issue you a mortgage for the property. The appraisal will determine the home's current market value.
You're in good shape if the home appraises for the sale price or higher. However, if it appraises for less, you'll have to put more money down to make up the difference, ask the seller to lower the price, or walk away from the house.
The lender will never give you a loan for more than the home is worth because they won't be able to recoup their losses if you default and they need to sell the property.
A homeowner's insurance policy protects your investment—and your lender's. If you experience a qualifying event, the insurance will cover:
Your lender will likely require you to purchase coverage before closing. It's wise to get multiple quotes before committing.
Pro tip: "Consider adding an insurance contingency clause to the offer—that is, if you can't get insurance or adequate coverage, you can walk away," advises Einberger.
Closing day is the date the home officially becomes yours. During the meeting, you can expect to sign a lot of paperwork and submit a certified check to cover your closing costs and down payment (if applicable). You may be able to roll some of your closing costs into your mortgage, but doing so will result in more debt and a larger monthly payment.
Pro tip: A day or two before closing, you'll likely do a final walkthrough of the property to ensure it's in the same condition as when you made the offer.
After closing, Ayala recommends that you:
Pro tip: "Ensure that you have the correct information if you live in a community with an HOA. The lender doesn't collect this fee in your mortgage payment, and if you don't have the correct information, it can lead to some violations with past due payments," says Schachter.
1. How much should I save for a down payment?
Down payment requirements vary by loan type. VA and USDA loans require no down payment, while FHA loans require as little as 3%. Conventional loans typically require 5-20%, but putting down 20% or more helps you avoid mortgage insurance payments.
2. How long does the home-buying process take?
From start to finish, the home-buying process typically takes 30-60 days once you're pre-approved and have found a home. However, the National Association of Realtors found that first-time buyers spend about 2.5 months house hunting before finding the right property.
3. What credit score do I need to buy a house?
Most mortgage programs require a minimum credit score of 620, though some FHA loans may accept scores as low as 580. A higher credit score typically means better interest rates and loan terms, so it's worth improving your score before applying if possible.
Laura has been a freelance writer since 2018. Her work primarily focuses on managing your money, navigating your career, and running a successful business. Her words have been featured in U.S. News & World Report, Fortune Recommends, The New York Post, USA Today, and many other publications.
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