A Quick Guide to Buying Your First Home

Buying your first home is an exciting milestone — but it can also be overwhelming. From understanding your finances to closing day, the home buying process has many moving parts. This step‑by‑step first‑time home buying guide breaks everything down so you know exactly what to expect and how to prepare.

Check Your Financial Health

Before you start browsing homes, it’s important to understand what you can realistically afford. A home is likely the largest purchase you’ll ever make, so having a strong financial foundation is essential.

Assess Your Budget

Review your:

• Monthly income

• Regular expenses

• Savings

• Outstanding debt

Online mortgage calculators can help estimate a comfortable monthly payment and overall home price range.

Check Your Credit Score

Your credit score plays a major role in determining your mortgage interest rate.

• Higher scores usually qualify for better loan terms

• Scores below 700 may benefit from improvement before applying

Paying down debt and making on‑time payments can help boost your score over time.

Save for a Down Payment

Many first‑time buyers think they need 20% down, but some mortgage programs allow as little as 3–5%. Keep in mind:

• Larger down payments reduce monthly payments

• They may also help you avoid private mortgage insurance (PMI)

Budget for Closing Costs

Closing costs typically range from 2–5% of the home’s purchase price. Be sure to plan for these expenses in addition to your down payment.

Step 2: Get Pre‑Approved for a Mortgage

Getting pre‑approved for a mortgage before house hunting gives you a clear price range and shows sellers you’re a serious buyer. A mortgage pre‑approval usually includes:

• Credit review

• Income and employment verification (W‑2s, pay stubs, tax returns)

• Debt‑to‑income (DTI) ratio calculation

Once approved, you’ll receive a pre‑approval letter stating how much you can borrow. This letter strengthens your offer when competing with other buyers. Most pre‑approvals are valid for about 90 days, depending on the lender.

Step 3: Find the Right Home

With financing in place, it’s time to start house hunting.

Define Your Priorities

Create a list of must‑haves and nice‑to‑haves, such as:

• Location (commute, schools, amenities)

• Size and layout (bedrooms, bathrooms, storage)

• Condition (move‑in ready vs. renovation potential)

Work with a Real Estate Agent

A knowledgeable real estate agent can:

• Schedule showings

• Help you understand local market trends

• Negotiate on your behalf

• Provide insight into neighborhoods and pricing

Attend Open Houses and Showings

Take your time during walkthroughs. Ask questions, look for signs of wear or damage, and imagine how the home fits your lifestyle.

Step 4: Make an Offer and Negotiate

When you find a home you love, your agent will help you submit a competitive offer based on:

• Market conditions

• Comparable home prices

• Seller demand

What Happens After You Submit an Offer?

• Seller response. Accept, reject, or counter

• Negotiation. Price, closing timeline, repairs, or included items

• Earnest money deposit. typically 1–3% of the purchase price

If your offer is accepted, you’re officially under contract — but there are still a few important steps ahead.

Step 5: Home Inspection and Appraisal

Home Inspection

The home inspection is an important step that can help reduce the risk that you'll end up with a home that has a lot of expensive issues you need to fix. A professional home inspection evaluates the property’s condition, including:

• Roof and foundation

• Plumbing and electrical systems

• HVAC and major appliances

If significant issues are uncovered, you may renegotiate repairs or price adjustments.

Home Appraisal

Your lender will order an appraisal to confirm the home’s value. If the appraisal comes in lower than the purchase price, you may need to:

• Renegotiate with the seller

• Cover the difference

• Walk away, depending on your contract terms

Step 6: Close on Your New Home

Closing day is the final step in the home buying process.

What to Expect at Closing

• Final walkthrough to confirm the home’s condition

• Payment of closing costs, including lender and title fees

• Signing loan documents and mortgage paperwork

Once everything is complete, you’ll receive the keys to your new home—congratulations!

Final Thoughts on Buying Your First Home

Buying your first home can feel complex, but breaking it into steps makes the process manageable. By preparing financially, getting pre‑approved, and working with trusted professionals, you’ll be well‑equipped to find a home that fits both your lifestyle and your budget.

How Can Peak Credit Union Help?

Buying a home is a big decision. Peak Credit Union is here to support you every step of the way. From mortgage pre‑approval to competitive home loan rates, our team of home loan experts are ready to help make homeownership a reality. We offer a wide variety of loans including 3% and 0% loans, VA, and FHA loans. To learn more about our home loan programs, visit peakcu.org/mortgages, call (800) 258-3115, or visit any Peak location.