First-Time Home Buyer Guide: Steps, Costs & Mistakes to Avoid
By Colson · Reviewed by Abodemic Editorial Standards · Updated June 1, 2026
Buying your first home comes down to a few steps: figure out what you can afford, save your down payment and closing costs, get pre-approved, shop within budget, and close. Knowing the full cost — not just the down payment — is what keeps first-timers from overextending.
What are the steps to buying your first home?
At a high level: (1) figure out what you can afford, (2) save your down payment and closing costs, (3) get pre-approved by a lender, (4) shop for homes within your budget, (5) make an offer and get it accepted, and (6) close. The two steps first-timers underestimate are the full upfront cost and the difference between pre-qualification and a real pre-approval.
Start with the affordability calculator to set a realistic price, then the closing cost calculator to size your total cash to close.
How much money do you need to buy your first home?
Two buckets: the down payment (anywhere from 0% with VA/USDA to 20% to avoid PMI) and closing costs (about 2%–5% of the loan). On a $350,000 home with 5% down, that's roughly $17,500 down plus ~$10,000 in closing costs. First-time-buyer programs and down-payment assistance can reduce the cash you need.
What credit score do first-time buyers need?
Conventional loans generally want 620+, FHA loans allow 580 (or 500 with 10% down). A higher score earns a lower rate — see how credit score affects your rate.
Common first-time-buyer mistakes
- Shopping before getting pre-approved, then falling for a home you can't finance.
- Forgetting closing costs and budgeting only for the down payment.
- Maxing out the lender's approval instead of a payment you're comfortable with.
- Opening new credit or making big purchases before closing, which can sink your approval.