First-Time Homebuyer Checklist
A complete first-time homebuyer checklist — from checking your credit 6 months before buying to getting keys at closing. Learn the 8 stages, what to do at each step, and the mistakes that trip up first-time buyers most often.
At a glance
The 8-stage process
Financial preparation
- Check all three credit reports at AnnualCreditReport.com
- Dispute any errors — corrections take 30–60 days
- Pay down revolving debt to reduce DTI
- Avoid opening new credit accounts
- Start building your down payment and reserves fund
Know your numbers
- Calculate your DTI and compare to loan type limits
- Research down payment assistance programs in your state
- Estimate affordability range using the calculator
- Research neighborhoods, commute distances, and school districts
Get pre-approved
- Gather W-2s, pay stubs, bank statements, and tax returns
- Apply to 3+ lenders within a 14-day rate-shopping window
- Choose a lender and get a pre-approval letter
- Understand the loan type, rate, and estimated payment
Find and make an offer
- Tour homes within your pre-approved range
- Review comparable sales before making any offer
- Include appropriate contingencies (financing, inspection, appraisal)
- Pay earnest money deposit when offer is accepted
Due diligence period
- Schedule a home inspection within 5–10 days
- Review inspection report and negotiate repairs or credits
- Order an appraisal (lender arranges)
- Begin title search and homeowners insurance quotes
Loan processing and underwriting
- Respond to any lender documentation requests promptly
- Do not make large purchases or change jobs
- Review the Closing Disclosure 3 business days before closing
- Wire closing funds or get a cashier's check
Close and take ownership
- Do a final walk-through of the property
- Sign loan documents at the closing table
- Pay closing costs and down payment
- Receive keys after deed is recorded
Settle in and protect your investment
- Set up automatic mortgage payments to avoid late fees
- File for homestead exemption if available in your county
- Change locks, set up utilities, update mailing address
- Track your LTV — PMI can be canceled at 80%
The most common first-time buyer mistakes
- Opening new credit before closing. Every new account raises your DTI and can kill final approval. No new cards, car loans, or personal loans from pre-approval to close.
- Buying at the top of the pre-approval amount. Lenders approve the maximum you qualify for — not what is comfortable. Budget for maintenance (1–2% of value/year), HOA increases, and property tax reassessments.
- Skipping the inspection. Waiving the inspection contingency in a competitive market is common but risky. A $600 inspection can reveal $20,000 in needed repairs. If you waive it, at least hire an inspector for informational purposes after the offer is accepted.
- Not rate-shopping. CFPB research shows that borrowers who get 5+ quotes save significantly more than those who use the first lender. Multiple inquiries in a 14-day window count as one credit pull.
- Forgetting reserves after closing. Closing day is not the finish line — it is the start of ownership. Have 2–3 months of PITI in a liquid account after paying closing costs and down payment.
Common questions
How long does buying a home take from start to finish?
Most first-time buyers take 3–12 months from "I want to buy" to keys in hand. The timeline breaks down roughly as: 1–3 months to prepare finances and get pre-approved, 1–6 months of active searching and offer-making (longer in competitive markets), and 30–60 days from accepted offer to closing. Buyers in fast-moving markets like Austin or Denver have closed in 6 weeks total; buyers in slower markets with financing complications can take 9+ months.
How much money do I need to buy my first home?
At minimum: your down payment (3–3.5% for FHA or conventional low-down programs), closing costs (2–5% of purchase price), and 2–3 months of reserves (recommended for post-close stability). On a $350,000 home: $10,500 down (3%), $7,000–$17,500 closing costs, and $3,000–$5,000 in reserves = $20,500–$33,000 minimum. Down payment assistance programs can cover part of this. Use the affordability calculator to model your specific number.
Do I need 20% down to buy a home?
No. Conventional loans allow as little as 3% down (Fannie Mae HomeReady, Freddie Mac Home Possible). FHA loans require 3.5% with a 580+ credit score. VA loans for eligible veterans and service members allow 0% down. The tradeoff: less than 20% down on a conventional loan requires PMI. FHA loans carry mortgage insurance premiums (MIP) for the life of the loan unless you put 10%+ down. The 20% threshold is a goal for avoiding PMI, not a requirement.
What is earnest money and can I lose it?
Earnest money is a good-faith deposit (typically 1–3% of purchase price) paid when your offer is accepted, held in escrow until closing. It signals commitment. You can lose it if you back out for reasons not covered by a contract contingency. Common contingencies that protect your deposit: financing contingency (loan denied), inspection contingency (unacceptable defects found), and appraisal contingency (home appraises below purchase price). Waiving contingencies is common in competitive markets but increases the risk of losing your deposit.
What is a buyer's agent and do I need one?
A buyer's agent represents your interests in the transaction — helping with search, offer strategy, negotiation, and contract review. Post-NAR settlement (August 2024), buyers must now sign a written representation agreement before touring homes with an agent, and the agent's compensation must be agreed in advance rather than automatically paid from the seller's proceeds. For a first-time buyer navigating a complex transaction, a good buyer's agent is generally worth the cost — but you should understand and agree to the fee structure upfront.