Buying your first home is one of the biggest financial decisions you’ll ever make. For many Americans, the process feels overwhelming—credit scores, down payments, mortgage rates, inspections, closing costs. But when you understand the system, homeownership becomes achievable and empowering.
This step-by-step guide will show you exactly how to buy your first home in the USA, even with limited savings or average credit.
Table of Contents
- How Much Home You Can Really Afford
- Credit Score Requirements
- Saving for a Down Payment
- First-Time Buyer Loan Programs
- Mortgage Pre-Approval Process
- How to Find the Right Home
- Making an Offer
- Home Inspection & Appraisal
- Closing Costs Explained
- Common First-Time Buyer Mistakes
- FAQs
1. How Much Home Can You Afford?
A safe rule: Your monthly housing cost should not exceed 28%–31% of your gross income.
2. Minimum Credit Score to Buy a Home
- 580+ → FHA loan
- 620+ → Conventional loan
- 640+ → USDA loan
- 660+ → VA loan (with service eligibility)
3. Saving for a Down Payment
- FHA: 3.5%
- Conventional: 3–20%
- USDA & VA: 0% down
4. First-Time Home Buyer Programs
- FHA Loans
- USDA Rural Loans
- VA Loans
- State down payment assistance programs
5. Getting Pre-Approved for a Mortgage
A pre-approval strengthens your offer and shows sellers you’re financially serious.
6. Finding the Right Home
- Work with a buyer’s agent
- Check crime, schools, and resale value
- Compare property taxes
7. Making an Offer
Offers include price, contingencies, earnest money, and closing date.
8. Home Inspection & Appraisal
Inspection protects you. Appraisal protects the lender.
9. Closing Costs Explained
- Loan origination
- Appraisal
- Title insurance
- Attorney fees
- Prepaid taxes & insurance
10. Common First-Time Buyer Mistakes
- Buying too much house
- Skipping inspection
- Draining emergency savings
- Ignoring property taxes
FAQs
Can I buy a home with bad credit?
Yes. FHA loans allow scores as low as 580 with a 3.5% down payment.
Is renting better than buying?
It depends on market conditions and personal finances. Buying builds long-term equity.
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