First-Time Home Buyer Guide
The 8-step roadmap Brian and RED use to get first-time buyers from "someday" to keys-in-hand.
1. Check your starting point
Pull your credit report (free at annualcreditreport.com), list monthly debts, and estimate savings. Take the 60-second Readiness Scorecard to see where you land against real lender thresholds.
2. Pick the right loan program
FHA (580+ credit, 3.5% down) is the workhorse for first-timers. Conventional 97 lets you put 3% down with 620+ credit. VA (0% down) is for eligible veterans. USDA (0% down) is for eligible rural areas.
3. Build the down payment + reserves
Most FTHBs need 3–3.5% down plus 2–3% for closing costs. Reserves (1–2 months PITI in the bank at closing) strengthen your file. Down Payment Assistance programs exist in every state — ask RED which apply to you.
4. Fix your credit levers (the 3 that move fastest)
Get utilization under 30% (ideally <10%) — this alone can move scores 20–40 points in 30 days. Never let anything go 30 days past due. Don't open new tradelines within 90 days of applying.
5. Watch your debt-to-income (DTI)
Most programs cap total DTI at 43–50%. Every $100/mo of debt eaten up costs you roughly $15,000–$18,000 in buying power. Pay down cards before financing a car.
6. Get pre-approved before you shop
A pre-approval (not just pre-qualification) means a lender pulled credit and reviewed income. Sellers require it. It also locks in your true max purchase price at today's rates.
7. Understand your total monthly (PITI)
Your payment isn't just principal + interest. Add taxes, homeowners insurance, PMI if under 20% down, and HOA if any. Use the affordability calculator to see the real number.
8. Close with eyes open
Between offer and closing: inspection, appraisal, underwriting, title work, and clear-to-close. Do not change jobs, open new credit, or make large deposits. Bring a cashier's check for cash to close.
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