First-Time Homebuyer’s Checklist: A Step-by-Step Guide to Buying Your First House

Your first home is a big move. Here’s the exact playbook to go from curious to closing.

Step 1: Get crystal clear on your numbers

Before you tour a single house, map your money.

Know your take-home pay, not just salary. List net monthly income from all sources.
Track current debts: student loans, car, credit cards, personal loans.
List monthly bills: rent, utilities, subscriptions, groceries, transit, childcare.

Now estimate what you can afford:

Target a total housing payment (mortgage, taxes, insurance, HOA) that’s comfortable long-term. Many first-timers aim for 25–33% of gross income, but your budget should rule, not just a rule of thumb.
Lenders look at your DTI (debt-to-income). For many conventional loans, 43% is common, sometimes higher with strong files. FHA can be more flexible.
Build a buffer. Homeownership brings expenses you don’t have as a renter. Plan an emergency fund with at least three months of expenses separate from your down payment.

What affects affordability:

Property taxes vary street to street. Check actual numbers on listings or county sites.
Homeowners insurance can jump based on claim history, roof age, and local risks.
HOA dues, if any, count toward your monthly payment.
Utilities and maintenance on a larger home can surprise new owners. Budget 1–2% of purchase price annually for upkeep.

Pro tip: Try a “practice payment” for three months. Save the difference between your expected mortgage payment and current rent. If it’s tight, you’ll know before you buy.

Step 2: Tune up your credit

Your rate and options hinge on your credit profile.

Pull all three reports at AnnualCreditReport.com and scan for errors, duplicate accounts, and old collections. Dispute inaccuracies in writing.
Pay down revolving balances. Aim for under 30% utilization on each card, ideally under 10% before applying.
Avoid opening or closing accounts during your mortgage process. Don’t finance furniture or a car until after closing.
If thin credit is an issue, ask a lender about rapid rescoring or alternative credit (rent, utilities) accepted by certain programs.

Score bands matter:

Conventional loans favor higher scores for best rates.
FHA is friendlier to modest scores and smaller down payments but includes mortgage insurance.
VA and USDA have unique rules and $0 down options for eligible buyers.

Step 3: Build your down payment and cash-to-close

There isn’t a single “right” down payment. There’s a workable one for your plan.

Conventional loans can start at 3–5% down.
FHA often requires 3.5% down.
VA and USDA can be 0% down for eligible borrowers and areas.
Jumbo loans usually need more.

But down payment isn’t everything. You’ll also need:

Closing costs: typically 2–5% of purchase price. This includes lender fees, title, escrow, appraisal, prepaid taxes and insurance, and interest.
Reserves: some loans require one to six months of mortgage payments in the bank after closing.

Ways to lower cash-to-close:

Seller credits for closing costs (limits apply by loan type).
Lender credits in exchange for a slightly higher rate.
Down payment assistance grants and forgivable loans from state and local programs.
Gift funds from family (documented properly per loan guidelines).

Keep your funds “seasoned.” Large, unexplained deposits draw questions. Talk to your loan officer before moving money around.

Step 4: Choose the right mortgage and get pre-approved

This is where the rubber meets the road.

Fixed vs. ARM: Most first-timers prefer the predictability of a 30-year fixed. ARMs can fit if your timeline is short and you understand the risk.
Term: 30-year lowers the payment; 15-year crushes interest faster if you can afford it.
Points: Paying points buys a lower rate. Calculate break-even based on how long you’ll keep the loan.
Rate locks: Lock when you’re serious. Monitor lock period length and any float-down options.

Shop lenders:

Compare at least three: a local bank or credit union, an independent mortgage broker, and an online lender.
Focus on total cost: rate, points, lender fees, third-party fees, and lock terms.
Ask about underwriting speed, appraiser panels, and communication style.

Pre-qualification vs pre-approval vs pre-underwrite:

Pre-qualification is a quick estimate.
Full pre-approval verifies documents and runs credit—this strengthens offers.
Pre-underwriting means an underwriter reviewed your file upfront. It’s the strongest and can help you win in tight markets.

Step 5: Assemble your homebuying team

You don’t need to do this alone.

Buyer’s agent: Look for deep local knowledge, recent first-time buyer success, and a calm negotiator. Ask how they handle bidding wars and inspection negotiations.
Loan officer: Availability matters. You want someone who answers the phone on weekends.
Real estate attorney: Required in some states, smart in complex deals everywhere.
Home inspector: Licensed, insured, and thorough. Request a sample report.
Insurance broker: Shop policies early for coverage and price.
Title/escrow company: You can request one; your agent can suggest trusted options.

Clarify how each person is paid. Your agent is usually paid by the seller, but not always—know the agreement you’re signing.

Step 6: Define must-haves, nice-to-haves, and dealbreakers

Get specific before emotions take over.

Must-haves: bedrooms, accessible entry, commute cap, parking, yard for a dog.
Nice-to-haves: finished basement, second living area, south-facing light, updated kitchen.
Dealbreakers: busy road noise, flood zone, foundation issues, excessive HOA restrictions.

Property type trade-offs:

Single-family: privacy and control, more maintenance.
Townhouse: shared walls, lower yard work, HOA rules.
Condo/co-op: lower maintenance, dues and board policies.
New construction: warranties and efficiency, but builder timelines and punch lists.
Older homes: character and mature neighborhoods, potential for higher upkeep.

Research the area:

Visit at different times: commute hours, late nights, weekends.
Noise map: airports, trains, highways, venues.
School lines, even if you don’t have kids—they impact resale.
Future development and zoning changes.
Insurance flags: wind/hail deductibles, wildfire zones, flood maps.

Step 7: Hunt with purpose

Make the search efficient, not exhausting.

Set alerts for your price range and target neighborhoods.
Tour quickly; good homes move fast.
Consider off-market leads: agent networks, community groups, direct mail to target streets, new-build communities.

Touring checklist:

Roof age, gutters, drainage away from the foundation.
Exterior cracks, grading, and signs of water intrusion.
Electrical panel brand and capacity; visible DIY wiring is a red flag.
Plumbing: water pressure, pipe materials, water heater age.
Windows: fogging, ease of opening, drafts.
HVAC age, service records, filter condition.
Attic: insulation depth, ventilation, stains suggesting leaks.
Basement/crawl: dampness, efflorescence, sump pumps.
Smells: musty odors can signal hidden moisture.

_{Photo by Tierra Mallorca on Unsplash}

Common red flags:

Fresh paint only on one lower wall—look for past water damage.
Heavily scented candles or diffusers—could mask odors.
Sloping floors and sticky doors—check foundation and framing.
DIY additions without permits.

Step 8: Price and write a winning offer

Ground your offer in data, not nerves.

Your agent should pull true comps: similar size, condition, location, and recent sales. Adjust for differences.
Gauge market heat: days on market, list-to-sale ratios, seasonal trends.

Key offer pieces:

Purchase price and earnest money deposit (shows you’re serious).
Contingencies: financing, appraisal, inspection, title. Each protects you; tailor based on your comfort and market.
Timeline: closing date, seller leaseback if they need time, inspection and financing deadlines.
Inclusions: appliances, window treatments, smart-home gear.

Tools for tight markets:

Escalation clause with a cap and proof requirements.
Appraisal gap coverage, if you have excess cash and understand the risk.
Shorter inspection periods with a right to terminate and walk if issues arise.
Higher earnest money, still refundable under contingency terms.

Tools for balanced or buyer-leaning markets:

Closing cost credits from the seller.
Rate buydown contributions.
Repair requests baked into the offer.

Keep your financing terms quiet in the contract; avoid tipping the seller to perceived weaknesses.

Step 9: Inspect and negotiate confidently

Inspections inform your next move.

Types to consider:

General home inspection.
Termite/wood-destroying organisms.
Radon.
Sewer scope (critical for older homes or large trees).
Chimney, roof, pool/spa, well and septic if applicable.
Lead-based paint disclosure and testing for pre-1978 homes.

What to ask for:

Health, safety, and structural items should top the list.
Major systems near end-of-life may justify a credit.
Cosmetic issues are negotiable but not core priorities.

Credits vs repairs:

Credits put you in control of quality and timeline.
Repairs may work if the seller uses licensed pros and permits as needed.
Get everything in writing with addenda and deadlines.

If a deal-breaker pops up, your inspection contingency should allow you to cancel within the time window, with earnest money returned.

Step 10: Appraisal and underwriting

Appraisal outcomes:

At value: proceed as planned.
Low appraisal: options include renegotiating price, meeting in the middle, challenging with better comps via an ROV, or bringing cash to cover the gap if you can.
High appraisals are rare and simply add peace of mind.

Underwriting requests:

Updated pay stubs, W-2s/1099s, tax returns if self-employed.
Bank statements with all pages; document large deposits.
LOEs (letters of explanation) for credit inquiries, employment gaps, or address changes.
Don’t change jobs or open new debt without talking to your lender.

Watch your timelines: appraisal, financing contingency, and rate lock expiration.

Step 11: Lock down insurance and title

Homeowners insurance:

Coverage A (dwelling) should match rebuild cost, not market value.
Ask about extended replacement cost, ordinance or law coverage, water backup, and roof settlement type (replacement cost vs actual cash value).
Understand deductibles, especially for wind/hail or named storms.

Flood insurance:

Required in high-risk zones with a mortgage.
Optional but worth pricing in moderate zones. One bad storm is all it takes.

Title work:

Title search should clear liens and verify legal ownership.
Lender’s title insurance protects the lender; owner’s title policy protects you. It’s a one-time cost that can save you from expensive surprises.

Step 12: Review your Closing Disclosure and prepare funds

Three business days before closing, you’ll receive the Closing Disclosure (CD):

Compare it carefully to your Loan Estimate.
Verify your interest rate, loan term, cash-to-close, and monthly payment.
Flag errors immediately; small corrections can still be made.

Funding and wire safety:

Use a verified wire instruction from your title company. Call a known phone number to confirm. Wire fraud is rampant—never trust last-minute email changes.
If allowed, a cashier’s check is safer than a personal check.

Step 13: Final walk-through and closing day

Final walk-through checklist:

Confirm agreed repairs are completed with receipts.
Ensure all fixtures and inclusions remain.
Test lights, outlets, faucets, toilets, HVAC, and garage doors.
Run appliances through quick cycles.
Check for new damage and that the property is broom clean.

At closing you’ll:

Sign your note, mortgage or deed of trust, and various disclosures.
Provide ID and proof of funds transfer.
Get keys once recording is confirmed, depending on local custom.

Take a photo of your meter readings and hold onto your signed documents.

Step 14: After you get the keys

Secure and settle in:

Re-key or replace locks, including garage and any smart locks.
Change all passwords for smart devices.
Test smoke and CO detectors; replace with 10-year units if needed.
Clean dryer vents and HVAC filters.

Set up your owner systems:

File for homestead or primary residence exemptions where available.
Calendar maintenance: gutter cleaning, furnace servicing, roof checks, and seasonal tasks.
Track appliance serial numbers and warranties.
Start a house journal for paint colors, contractors, and receipts for improvements (useful for taxes later).

Expect mail from mortgage “servicers”—your loan may be sold. That’s normal. Verify any change notices with both companies before sending payments.

Step 15: Budget snapshot and timeline

Budget reminders:

Down payment.
Closing costs: lender, title, appraisal, prorations, prepaids, escrow setup.
Move-in expenses: movers, boxes, initial supplies.
Immediate fixes: small repairs, window coverings, safety items.
Ongoing: utilities, lawn care, HOA, maintenance fund.

A typical timeline (varies by market):

Week 1–2: Pre-approval, agent selection, define search.
Week 3–6: Showings and offers.
Week 7–10: Under contract, inspections, appraisal, underwriting.
Week 11–12: Clear to close, final walk-through, closing.

Step 16: Common pitfalls to avoid

Shopping before pre-approval. You’ll fall in love with houses you can’t buy yet.
Ignoring total payment. Taxes, insurance, and HOA can crush a budget if overlooked.
Waiving inspection blindly. Even in hot markets, at least do a walk-and-talk with a pro.
Big purchases during escrow. That new sofa can wait.
Over-focusing on interest rate alone. Fees, points, and long-term plans matter.
Short-cutting the neighborhood check. Day vs night feels totally different.
Underestimating closing costs. Build a real estimate early with your lender.
Not reading the HOA docs. Rules, budgets, and special assessments can be deal-breakers.

Step 17: Leverage programs built for first-time buyers

You may qualify for help:

Low down payment conventional programs with reduced mortgage insurance for certain incomes or areas.
State and local down payment assistance grants or forgivable seconds.
Employer or union housing benefits.
VA loans for eligible service members and veterans.
USDA loans for specific rural areas and income limits.

Ask lenders to price multiple scenarios and show total five-year and 10-year costs. The “cheapest monthly” is not always the best fit if you plan to sell or refinance.

Step 18: Negotiation scripts you can actually use

When inventory is tight:

“We can be flexible on closing and offer a short post-close occupancy if that helps your move.”
“We’ve completed full pre-underwriting and can minimize financing risk.”
“Here’s our escalation with clear proof-of-offer requirements, capped at X.”

When you hold the cards:

“Inspection revealed X, Y, and Z. We’ll accept a seller credit of $X at closing to proceed.”
“We can close in 21 days if we agree on these repair items and a price of $X.”

Keep it polite, specific, and solution-oriented.

Step 19: Your quick-reference closing checklist

Pre-approval letter updated and accurate.
Offer terms aligned with budget and comfort level.
Inspection completed; repair/credit addendum signed.
Appraisal in; any issues resolved.
Final loan approval: clear to close.
Closing Disclosure reviewed and matched to expectations.
Funds wired safely; ID ready.
Final walk-through complete.
Keys, garage remotes, manuals, and codes collected.

Final word

Buying your first home takes planning, patience, and a steady team. Follow the steps, ask questions early, and keep your budget front and center. With a clear checklist and a bit of persistence, you’ll open the door to the right house—and feel confident about every page you signed to get there.

External Links

Preparing for Your First Home Purchase: A Comprehensive Checklist Checklist for buying your first home | Rocket Mortgage A Step-by-Step Guide to Buying Your First Home [PDF] The Ultimate Guide for First-Time Homebuyers - First Bank Ultimate Homebuying Checklist - Pennsylvania Association of Realtors