First Home Purchase

Buying a home is the largest financial transaction of your life. Here's how to prepare, what it really costs, and when it makes sense.

Are You Ready?

3-20%

Down Payment

Of purchase price

2-5%

Closing Costs

Additional cash needed

3-6 mo

Emergency Reserves

After closing

<36%

Ideal DTI Ratio

Debt-to-income

Saving $1,100/month Toward $40K Down Payment

Savings Balance

Loan Options Compared

Mortgage Types

Feature	Down Payment	Best For
Conventional	3-20%	Good credit (700+), PMI drops at 20% equity
FHA	3.5%	Lower credit OK (580+), permanent MIP
VA	0%	Veterans/military, no PMI
USDA	0%	Rural areas, income limits
First-Time Buyer Programs	0-3%	State/local grants, income limits

The Buying Process

6-12 Months Before

Get Pre-Approved

Know your budget. Lock rate. Sellers take pre-approved buyers seriously.

Month 1-3

House Hunt

Tour homes, make offers. Expect 2-5 offers before one is accepted.

Under Contract

Inspection & Appraisal

30-45 day period. Inspector finds issues, appraiser confirms value.

Closing Day

Sign & Get Keys

Wire funds, sign 100+ pages, get your keys. You're a homeowner.

Hidden Costs Most Forget

Property Tax

1-3% of home value annually. $3K-$10K/year on a $350K home.

Home Insurance

$1,200-$3,000/year. Required by lender.

Maintenance

Budget 1% of home value/year ($3,500 on a $350K home).

HOA Fees

$200-$500/month in condos/planned communities.

Utilities Increase

House utilities are 50-100% more than apartment.

The True Monthly Cost

Mortgage payment is NOT your housing cost. Add property tax, insurance, maintenance, and HOA. A $2,000 mortgage easily becomes $3,000+/month in true cost.

Key Takeaways

Save 3-20% down payment PLUS 2-5% closing costs PLUS 3-6 month reserves
Get pre-approved before house hunting — know your real budget
True monthly cost = mortgage + tax + insurance + maintenance + HOA
First-time buyer programs can reduce down payment to 0-3%
Don't buy until debt-to-income ratio is under 36%

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