How to Buy a House: A Guide for First-Time Home Buyers in 2026

Buying your first home is a big step, and it’s important to know what to expect. Here’s a straightforward guide to help you understand the process, the benefits of being a first-time buyer, and your loan options.
 

Who Is Considered a First-Time Home Buyer?

You can qualify for special programs as a first-time home buyer if:
 

• You’ve never bought a single-family home before.
• You haven’t owned a home in the past three years, even with someone else.
• You’re a displaced homemaker or single parent who hasn’t owned a home (unless it was with a spouse) in the last three years.

Usually, you will also need a steady income and manageable debts to get a first-time home buyer loan.
 

Steps to Buying Your First Home

1. Figure Out How Much You Can Afford

Know your budget before you start looking. As a basic rule, try not to spend more than about 28% of your monthly pre-tax income on housing costs (including mortgage, taxes, and insurance).

Also, save enough money for closing costs, which are usually between 2% and 5% of the home’s price.

You can reduce these costs by comparing offers from different lenders and negotiating.

2. Compare Mortgage Lenders

Shop around. Most buyers look at more than one lender. Compare not just interest rates, but also fees like loan origination fees and total closing costs. Get written offers and see which one is best for you.

3. Start Looking for a Home

Make a list of what you need in a home and what would be nice to have. Visit open houses and pick out a few options. Your real estate agent will help you make offers and negotiate.

4. Choose Your Lender

After your offer is accepted, you’ll finalize your lender choice. Ask each lender for clear terms so you can compare them easily. Once you choose, the next steps are an appraisal, inspection, and preparing for closing.

5. Get Ready to Close

A few days before closing, you’ll get a document that lists all the costs and fees. On closing day, you’ll sign the final paperwork and officially own the home!
 

Special Benefits for First-Time Home Buyers

Lower Down Payment

You may only need a 3% down payment (some lenders even less), compared to the traditional 20%. This helps you buy a home with less cash up front.

Help with Down Payment and Closing Costs

There are many federal, state, and nonprofit programs that can help with your down payment or closing costs. These are often available for teachers, veterans, first responders, and low- to moderate-income families.

Some employers also help their employees buy homes.

Easier Credit Requirements

If your credit score is low, you can still qualify for certain loans. For example, FHA loans require a score as low as 500 (with a higher down payment), or 620 for some conventional loans.

Education Courses

Some programs require you to complete a short course to help you understand the home-buying process.
 

Common Challenges

 

• High Mortgage Rates: Rates are higher than recent years, making it harder for some people to afford buying a home.
• Limited Housing Supply: Fewer homes are available, so prices stay high and choices are limited.
• Saving for a Down Payment: Rising home prices and inflation make it difficult to save enough money for a down payment.

 

Types of Mortgages for First-Time Buyers

• FHA Loans: Require lower credit scores and a smaller down payment.
• VA Loans: For military families; no down payment needed.
• USDA Loans: For rural area buyers with low-to-moderate income; no down payment needed.
• HomeReady and Home Possible Loans: Special programs with low down payments for first-time buyers.

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Need help with your down payment? Find resources and assistance here!