Buying your first home is one of the largest financial moves you will ever make, and doing it without préparation is expensive. Start by pulling your credit report from all three bureaus, disputing any errors, and paying down revolving balances to below 30% of your credit limit. A score above 700 unlocks the best conventional loan rates, while an FHA loan is accessible with a score as low as 580 and a 3.5% down payment, making it the go-to option for many first-time buyers with limited savings.
Down payment assistance programs worth knowing
Most states run their own down payment assistance programs specifically for first-time buyers. These range from forgivable second mortgages to outright grants of $5,000 to $25,000 depending on your income and the property location. Programs like Fannie Mae HomeReady and Freddie Mac Home Possible allow as little as 3% down for qualifying buyers with income at or below the area median. Check your state housing finance agency website before assuming you need to put 20% down.
The biggest mistakes first-time buyers make
Skipping the home inspection to save $400 to $600 is the most common and costly error. A licensed inspector examines the roof, foundation, HVAC, electrical panel, and plumbing, producing a report that can reveal $20,000 in deferred repairs. The second major mistake is stretching the budget to its absolute limit, leaving no room for property taxes, HOA fees, maintenance, or the inevitable appliance replacement. A conservative purchase price protects your financial flexibility and sets you up for your next move.
