First time home buyer

First-Time Home Buyer Guide

Educational information about first-time buyer programs, down payment assistance options, and general tips for the home buying process.

Disclaimer: This website provides general mortgage and financial information for educational purposes only. It does not constitute financial, legal, or mortgage advice. Housentia is not a licensed mortgage broker, lender, or loan originator.

Planning Your Mortgage Before House Hunting

Important Reality Check:

Many first-time buyers make the mistake of falling in love with a house first, then trying to figure out how to pay for it. This often leads to disappointment and frustration when they realize the house is beyond their budget.

The smart approach is to understand your financial capacity first, then look for homes within your budget. This way, you'll avoid the heartbreak of finding your dream home only to discover you can't afford it.

By planning your mortgage first, you'll have a clear budget range and can focus your house hunting on properties you can actually afford, making the entire process much smoother and less stressful.

The Mortgage Process: Step by Step

Step 1: Check Your Credit Score

Your credit score is an important factor in loan approval and rate determination. Generally, scores of 740 or higher may qualify for more favorable terms, though actual rates depend on many factors.

Get your free credit report from AnnualCreditReport.com
Check for errors and dispute any inaccuracies
Pay down existing debt to improve your score

Step 2: Calculate Your Budget

Determine how much house you can afford based on your income, debt, and savings.

Use our Affordability Calculator
Consider all costs: mortgage, taxes, insurance, maintenance
Leave room for emergency savings

Step 3: Save for Down Payment

Down payment requirements vary by loan type. While some conventional loans may require 20% down, many programs allow lower down payments. Here are some common options:

Conventional loans: 3-5% down
FHA loans: 3.5% down
VA loans: 0% down (for veterans)
USDA loans: 0% down (rural areas)

Step 4: Get Pre-Approved

A pre-approval letter shows sellers you're serious and tells you exactly how much you can borrow.

Compare rates from multiple lenders
Get pre-approval before house hunting
Keep your financial situation stable during the process

Step 5: Find Your Home

Now you can confidently search for homes within your pre-approved budget.

Work with a trusted real estate agent
Consider location, schools, and future resale value
Get a thorough home inspection

Step 6: Close the Deal

The final step involves paperwork, final approval, and transferring ownership.

Review all loan documents carefully
Bring required funds to closing
Get your keys and move in!

Down Payment Assistance Programs

Don't let a lack of savings prevent you from buying a home. There are many programs designed to help first-time buyers with down payments and closing costs.

CalHFA (California Housing Finance Agency)

California's state housing agency offers several programs for first-time buyers:

MyHome Assistance Program: Up to 3.5% of purchase price
CalHFA Conventional: Low down payment options
CalHFA FHA: Government-backed loans with assistance
CalHFA VA: For veterans and service members

Chenoa Fund

A national down payment assistance program:

Up to 3.5% down payment assistance
Available with FHA loans
No repayment required (forgivable after 3 years)
Available in most states

Low Down Payment Loan Options

You don't need 20% down to buy a home. Here are programs that make homeownership more accessible:

Loan Type	Key Features	Requirements/Notes
FHA Loans (3.5% Down)	For lower credit or limited savings Lower interest rates than many conventional loans Mortgage insurance required	Minimum credit score: 580 (with 3.5% down) Credit scores 500-579: 10% down required
Conventional Loans (3% Down)	HomeReady and Home Possible programs Lower mortgage insurance costs than FHA Can be combined with down payment assistance	Minimum credit score: 620
VA Loans (0% Down)	For veterans, active duty service members, and eligible spouses No down payment required No mortgage insurance Competitive interest rates	Funding fee may apply
USDA Loans (0% Down)	For homes in eligible rural areas No down payment required Guarantee fee instead of mortgage insurance	Income limits apply Property must be in USDA-eligible area

Tips for First-Time Home Buyers

Key Success Factors:

Start early: Begin saving and improving your credit at least 6-12 months before buying
Get educated: Understand the process and your options before making decisions
Work with professionals: Choose experienced real estate agents and mortgage lenders
Don't rush: Take time to find the right home and loan for your situation
Plan for the future: Consider how your needs might change in 5-10 years
Emergency fund: Keep savings for unexpected repairs and expenses

Ready to Start Your Home Buying Journey?

Use our tools to calculate your budget and explore your mortgage options.

Calculate What You Can Afford Mortgage Payment Calculator

This is completely optional. Connect with licensed mortgage professionals to explore your options further. No obligation - you can learn more about your mortgage options at your own pace.