First-Time Home Buyer Checklist — 12 Steps to Closing

Your 12-Step Path From Renter to Homeowner

Buying your first home involves more steps than most people expect. Miss one, and you could overpay by thousands or lose the house entirely. This checklist walks through every step in order — from the first credit check to the day you get your keys.

Find out how much house you can afford before you start shopping with the Mortgage Calculator→

Step 1: Check Your Credit (6-12 Months Before)

Pull your free credit reports at AnnualCreditReport.com. You need a minimum 580 for FHA loans, 620 for conventional. But the real target is 740+ — that's where you unlock the best interest rates.

If your score needs work:

• Pay down credit card balances below 30% utilization
• Don't open new accounts or close old ones
• Dispute any errors on your report
• Set up autopay to avoid late payments

Every 20-point increase can save you 0.125-0.25% on your rate — worth $20,000-$40,000 over a 30-year loan.

Step 2: Figure Out Your Budget

Don't rely on what a lender says you can afford. Banks will approve you for the maximum — that doesn't mean you should borrow it.

Conservative approach: keep your housing payment (principal, interest, taxes, insurance) below 25% of take-home pay. If you bring home $4,000/month, aim for a $1,000 mortgage payment.

Step 3: Save for Down Payment + Closing Costs + Reserves

Many first-time buyers underestimate closing costs. Budget 2-5% of the purchase price. Our Closing Cost Calculator gives you a state-specific estimate.

Step 4: Research Down Payment Assistance

Over 2,000 programs exist nationwide offering $5,000-$50,000 in grants or forgivable loans for first-time buyers. Check:

• State housing finance agencies (every state has one)
• City/county programs (income-restricted)
• Employer programs (some large employers offer assistance)
• Federal programs (Good Neighbor Next Door for teachers/firefighters/officers)

Step 5: Get Pre-Approved (Not Pre-Qualified)

Pre-qualification is a rough estimate. Pre-approval is a lender verifying your income, assets, and credit — and committing to a specific loan amount. Sellers take pre-approved buyers much more seriously.

Get pre-approved by 2-3 lenders within a 14-day window (multiple hard inquiries count as one).

Step 6: Find a Buyer's Agent

In most states, the seller pays both agents' commissions. A good buyer's agent will:

• Access MLS listings before they hit Zillow
• Write competitive offers
• Negotiate repairs after inspection
• Guide you through closing paperwork

Interview 2-3 agents. Ask about their experience with first-time buyers and their average list-to-sale price ratio.

Step 7: House Hunt (2-6 Months)

Make a "must have" vs "nice to have" list before you start looking. Touring homes without clear criteria leads to decision fatigue and emotional overspending.

Must-haves: location, number of bedrooms, budget ceiling Nice-to-haves: updated kitchen, garage, yard size

Visit at least 10-15 homes before making an offer. Visit your top choices at different times of day.

Step 8: Make an Offer

Your agent will help you craft an offer based on comparable sales ("comps"), days on market, and competition level. In a buyer's market, offer 3-5% below asking. In a seller's market, you may need to offer at or above asking.

Include contingencies: inspection, appraisal, and financing. These protect you if problems arise.

Step 9: Home Inspection ($300-$600)

Never skip this. Inspectors check the roof, foundation, electrical, plumbing, HVAC, and more. If they find major issues, you can:

• Request the seller fix them
• Negotiate a price reduction
• Walk away (if you have an inspection contingency)

Step 10: Appraisal

Your lender orders an appraisal to confirm the home is worth what you're paying. If the appraisal comes in low, you can renegotiate the price, pay the difference in cash, or walk away.

Step 11: Final Walkthrough

24-48 hours before closing, walk through the home to verify:

• Agreed repairs were completed
• No new damage occurred
• All fixtures and appliances are present
• Utilities are working

Step 12: Close

You'll sign a mountain of paperwork, wire your down payment and closing costs, and receive the keys. Bring a government-issued ID and a cashier's check (or confirm wire transfer instructions directly with your title company — never trust emailed wire instructions).

CFPB — Owning a Home Guide→

Quick Reference Timeline

Calculate your full costs with our Mortgage Calculator and Down Payment Calculator.