First-Time Homebuyers

Resources to help everyone walk through the entire homebuying process, from understanding key terms and finding a mortgage lender, to closing and moving into your first home.

Sponsored by What's this?

Key Terms

Frequently Asked Questions

  • How much should I save before buying a house?

    The main factors to save for when buying a house are earnest money—the deposit you make when putting an offer on a home—the rest of your down payment, and closing costs. Most earnest money deposits average between 1% and 3% of the home price, and closing costs average about 2% to 5% of the purchase price of the home. As for the down payment, experts suggest saving at least 20% of the price of the home, but depending on your situation, less than 20% may work too.

  • What are the prepaid costs when buying a home?

    Prepaid costs—also referred to as prepaids—are upfront cash payments that you make in addition to your down payment, in order to obtain a mortgage. These can include property taxes, hazard insurance, private mortgage insurance, and special assessments. They are paid at closing and placed into an escrow account to later cover the expenses related to a mortgage.

  • What costs are involved in buying your first home?

    The biggest costs to plan for when buying your first home include the down payment and the monthly mortgage payments. You will also pay various one-time fees, including those related to closing costs, mortgage application, home inspection and appraisal, and more. Before finalizing your purchase, speak with your real estate agent, lender, or attorney in order to understand all costs involved.

  • What questions should you ask when buying a home?

    Before making an offer on a house, a buyer should ask specific questions about three main things: price, home condition, and location. When asking about location, for example, you may ask about where the nearest schools are located or whether or not the house is in a flood zone.

  • How much money do you need to put a down payment on a house?

    When it comes to the down payment, most experts suggest that you should be willing to put down 20% of the purchase price of a home. While putting 20% down is not the only way to achieve homeownership, when you put that much down, you’ll avoid paying for private mortgage insurance. To calculate the amount you would need for a 20% down payment, multiply your home’s purchase price by 20% (or 0.20).

  • When is the appraisal done when buying a home?

    An appraisal is a process, solidified by a written document, that shows an opinion of how much a property is worth. Typically, the appraisal happens after an offer has been made and the home in question has been inspected. It’s not always required, but recommended. The buyer usually has to pay for and arrange the appraisal, and once it is complete, the final report is sent directly to the lender.

  • What are the tax deductions associated with buying your first home?

    The IRS offers deductions to those who qualify for the prepaid mortgage interest. For instance, the IRS allows certain first-time homebuyers to avoid a specific tax penalty if they withdraw money from an IRA to help pay for their home. In order to qualify, though, you must meet the specific definition that the IRS uses for “first-time homebuyer.”

 primary images_feature article week 3_color.png
How To Build Your Homebuying Support System
Two people meet with their real estate agent before shopping for their first home.
The First 365: Paying For & Enjoying Your First Home
A couple speaks with a real estate agent
Redlining
How Do US Laws Protect LGBTQ Homebuyers From Discrimination?
How Do US Laws Protect LGBTQ Homebuyers From Discrimination?
Real estate agent showing a home to a young couple
How Long Does It Take To Buy a House?
Couple buying a house and closing the deal with the real estate agent
FHA Loan
Two young women talking sprawled on floor at home
Types of Mortgage Loans for Homebuyers
Homebuyers consulting with a contractor
A First-Time Homebuyer's New Construction Guide
factors that can delay or precent home closing
How Long Does It Take To Close on a House?
An inspector with a clipboard talks to a homeowner.
Appraisal
Young couple in empty kitchen of new house
What Is the First-Time Homebuyer's Credit?
Couple embracing outside new house
First-Time Homebuyer Programs
what income is needed to buy a house?
How Much Income Do You Need To Buy a House?
Monthly mortgage insurance provided is required on all FHA loans.
FHA Mortgage Insurance: What You Need To Know
Couple buying their first home
First-Time Homebuyer Act of 2021
Couple looking at a home with real estate agent
When To Buy a House
A couple sit at a table, smiling and reviewing finances together on a laptop
What Is the Average Down Payment on a House for a First-Time Homebuyer?
Couple with two children carrying boxes through front door of new home
Mortgage
A family moves into a home.
How To Find the Best Place To Buy a House
Person sitting on stairs and petting dog
First-Time Homebuyer Qualifications
Couple signing paperwork in office with lawyer
Buying a Home? Get Help Covering Closing Costs
Real estate agent showing vacant house to a couple
How To Save for a House
Parent holding toddler in front of new home
First-Time Homebuyer Loan
Two people looking at a house for sale with a real estate agent
Pros and Cons of First-Time Homebuyer Loans
Pros and Cons of VA Loans include Pros: Lower costs upfront May offer better rates and lower terms Assumable by new homeowners Consumer-friendly loan terms Cons: Strict service requirements Not offered by all lenders Risky if home values drop
What Is a VA Loan?
Young Asian couple discusses financial matters while using laptop on sofa
How To Refinance FHA and Other First-Time Homebuyer Loans
A couple sitting and chatting at a kitchen table in a new home
What to Know About Buying a House With Low Income
Couple browsing a townhouse development with real estate agent
Your Guide To Buying a Townhouse
Real estate agent talking to a couple looking at a house
5 Tips for Making an Offer on a House
A woman sits at a desk with a computer.
Do You Get a Tax Break for Buying a House?
A father hoists his smiling young daughter aloft.
How Much Does a First-Time Homebuyer Need for a Down Payment?
A young couple and their dog take a break from unpacking moving boxes to eat pizza on the floor of their new home
How To Qualify for a Home Loan
Real estate salesperson greeting customers while standing outside house
Here’s How To Win a Bidding War on Your First Home
 A man sits with his child at a desk.
Steering in Real Estate
Couple surrounded by boxes while moving into new home
What To Know About First-Time Homebuyer Classes
Person working on a laptop at a small pottery business
How To Buy a House When Self-Employed
A couple looks at real estate flyers on an agency window
First-Time Homebuyers: Should You Use Your Roth IRA for the Purchase?
Three people walking together on a beach
What Is the Average Age of a First-Time Homebuyer?
Parent and child lifting moving boxes in a new home
How To Budget for a House
Couple reviewing documents
Buying Your First Home? Check Out These Mortgage Tips
A couple unpacking boxes in living room of new house
Types of Home Loans for First-Time Homebuyers
People discussing paperwork
Fair Housing Act
This illustration describes all about home down payments including "Types of minimum down payments: VA Loans, FHA Loans, Conventional Loans," and "Where you can get money for a down payment: Gifts or loan from family, Personal loan, Withdrawal from retirement accounts, and Sell other assets."
How Much To Put Down on a House
A couple reviews finances while sitting on the couch.
Mortgage Rebate
A couple enjoys coffee in a home kitchen.
What Are the Benefits of Being a First-Time Homebuyer?
A parent and infant look out the front door of their home.
First-Time Homebuyer
A woman and a real estate agent holding a document have a discussion in front of a home
Qualified Mortgage
Young woman with moving boxes and furniture
When Is the Best Age to Buy a Home?
illustration of woman calculating home-buying fees. Text shows: "title insurance, survey fees, escrow fees, appraisal fees, pest/mold inspection fees, homeowner's insurance."
Fees You Need To Know About When Buying a Home
A person seated on the floor reviews paperwork.
Buying a House Online: Where To Look and How To Do It
Smiling, embracing couple in front of new home
Buyer's Market
Person seated a desk, looking at a computer screen
Can You Buy Your First Home With Bitcoin?
Young man reviews paperwork while using laptop at home
Housing Expense Ratio
A young couple open moving boxes containing kitchen tools and supplies in a clean, well-lighted place.
What Is the Minimum Down Payment for a Conventional Loan?
A child drinks a glass of juice.
A List of Household Expenses (and Ways To Save)
A young family takes a break from unpacking moving boxes.
Chase Homebuyer Grant
Couple meeting with a real estate agent
How To Buy a House With a Friend
Person installing a new faucet
What To Do After Buying a House
Real estate agent showing a house
What First-Time Homebuyers Should Look for in a Real Estate Agent
A builder and client look at a blueprint.
What First-Time Homebuyers Need to Know About Building a House
 
 
 
 

Page Sources

  1. U.S. Department of Housing and Urban Development. “Common Questions From First-Time Homebuyers.”

  2. National Association of Realtors. “Upfront Cost of Buying a Home.”

  3. H&R Block. “Tax Deductions For Home Purchase.”