I promised this post after Bridger and I bought our first home together in May. If I’m honest, Bridger led the way and taught me most of what I know—he’s a mortgage lender and very good at breaking down the process so it’s understandable. Home buying is complicated and not something most people learn in school, so having guidance makes a big difference.
Because I received so many questions about our experience, I wanted to share practical tips that can help you buy your first or next home. Bridger answered several common questions in a video on IGTV—watch it for quick answers—and the rest are covered below.
HOW MUCH SHOULD YOU SAVE FOR A DOWN PAYMENT? IS 20% REQUIRED?
You do not need 20% to buy a home. Putting 20% down eliminates private mortgage insurance (PMI), which lowers the monthly payment and reduces the lender’s risk. However, many buyers put down far less: in 2018, 72% of first-time buyers put down 6% or less (Freddie Mac).
First-time buyer programs often allow 3% down for conventional loans and 3.5% for FHA loans. Each additional 5% you save generally improves your qualifying metrics and may yield a better interest rate and lower mortgage insurance. For example, 10% down usually leads to better terms than 5% down.
CAN YOU PUT 0% DOWN? PROS AND CONS
Yes—some programs allow 0% down. You’ll still owe closing costs and prepaid items (usually around 2.2% of the purchase price). The VA loan is the most common 0% option and does not require mortgage insurance, making it attractive for eligible borrowers. Keep in mind that many 0% programs can carry higher interest rates, so saving even a small down payment (e.g., 3%) can improve your monthly payment.
I advise buyers considering grant or bond programs to review monthly affordability carefully. Sometimes reducing debt or tightening the monthly budget first can put first-time buyers in a stronger position than using certain zero-down products.
HOW DO YOU FIND THE RIGHT LOAN AND RATE?
The best loan and rate depend on your cash, debts, and credit profile. It’s crucial to work with a professional mortgage lender before house hunting so you understand options and limits. Veterans will typically use VA loans. For most buyers, the main decision is between FHA and conventional loans. If you plan to put the minimum down and have a credit score under 700, FHA may offer a lower monthly payment. Comparing options side-by-side helps visualize trade-offs in rates, payments, and mortgage insurance.
HOW LONG DOES IT TAKE TO GET A LOAN? WHEN SHOULD YOU GET PREAPPROVED? DOES IT AFFECT YOUR CREDIT?
Preapproval is straightforward—most lenders have digital applications that take minutes and include a credit pull. A credit inquiry can temporarily lower your score by 4–6 points but typically rebounds within 30 days.
If you get an underwritten preapproval before making offers, the timeline from accepted offer to closing can be as short as 21 days. Without that, budget around 30 days from accepted offer to closing. First reach out to a mortgage professional to assess readiness—this initial conversation often takes about 15 minutes and will tell you whether you’re ready or need to take steps first.
HOW DO YOU DETERMINE WHAT PRICE YOU CAN AFFORD?
A common guideline is that your total debt payments plus your housing costs should not exceed about 43% of gross monthly income. To calculate gross monthly income, divide annual pre-tax income by 12; hourly workers can use hourly rate × 40 × 52 ÷ 12. A lender can provide precise affordability numbers based on your profile.
TIPS ABOUT CLOSING COSTS — HOW TO ESTIMATE THEM
Estimate closing costs and prepaid items at about 2.2% of the purchase price, though this varies by state. Sellers can often pay some closing costs, and an experienced real estate agent can help negotiate these expenses down.
HOW DO YOU START SAVING FOR A HOME?
Make saving a priority. Track spending or set a monthly budget that includes a fixed savings amount, then “pay yourself” first. It’s simpler than it seems, and starting now will bring you much closer to your goal in a year.
HOW MUCH SHOULD YOU HAVE SAVED BEYOND THE DOWN PAYMENT?
Discuss this with a mortgage professional, but generally it’s wise to keep an emergency fund—aim for about six months of living expenses—after buying a home. Also talk to your lender about timing first payments and how different down payment amounts affect monthly obligations.
ROLES: MORTGAGE LENDER, BANK, AND REAL ESTATE AGENT
Mortgage lender: helps determine a comfortable monthly payment and translates that into a target purchase price. A good lender works backwards from your desired payment to find realistic buying power.
Bank: supplies the financing and underwrites eligibility, ensuring you meet repayment standards. Regulations like Dodd-Frank require banks to confirm ability to repay, which has helped stabilize lending.
Real estate agent: a buyer’s agent knows neighborhoods, schools, and local market trends and negotiates to secure the best deal. Working with experienced agents and lenders together can improve your outcome—ask for referrals.
WHAT IF A PARTNER HAS BAD CREDIT?
Loan choice and structure matter. For conventional loans, both spouses don’t need to be on the mortgage but can be on title. FHA loans typically require both partners on the mortgage and title. If a primary earner has poor credit, address the issues first when possible to secure better terms.
THREE TIPS TO IMPROVE CREDIT
- Identify why your score is low: payment history, credit utilization, length of credit history, new credit, and credit mix all matter.
- Pay down debts: reducing balances and paying on time improves your score and shows responsible borrowing.
- Maintain multiple open lines of credit: while opening new credit can temporarily lower your score, having several responsibly managed accounts helps long-term.
SHOULD YOU PAY OFF STUDENT LOANS FIRST OR SAVE FOR A DOWN PAYMENT?
It depends on your circumstances. If you can live cheaply and aggressively pay down loans, that will lower monthly debts and improve credit. If you can’t, balance saving for a down payment with building an emergency fund. Also watch for negative amortization on some student loans—make sure payments at least cover interest so balances don’t grow.
FIRST STEP: REALTOR OR LENDER?
Start with a lender. Many people meet realtors at open houses, but a lender can quickly determine if you’re ready to buy and outline steps to improve your position. That helps you know what price range and programs make sense before you shop.
RENTING VS. BUYING IN EXPENSIVE MARKETS
Talk to a local realtor for market-specific advice, but generally high-cost areas have correspondingly high rents. Buying offers benefits like appreciation, mortgage interest and property tax deductions (within current limits), mortgage insurance tax deductions in many cases, and forced equity buildup through principal payments. Renting offers flexibility and lower upfront costs, while a fixed-rate mortgage stabilizes your principal and interest payment over time (though taxes and insurance can change).
CAN YOU TALK TO A LENDER BEFORE YOU’RE READY?
Yes—absolutely. Early conversations are helpful and many lenders will review your situation and suggest a plan to get you ready. If you need a referral, ask your trusted contacts; lenders can operate across many states.
IS IT WORTH BUYING IF YOU WON’T LIVE THERE LONG-TERM?
Primary residences generally require intent to occupy for at least 12 months. For first-time buyers, aiming to stay 3–5 years helps amortize transaction costs and capture appreciation, but moving sooner is possible if circumstances change. Understand the commitment and potential scenarios if you can’t sell quickly.
FIRST-TIME HOME BUYER BENEFITS
First-time buyers often qualify for lower down-payment requirements—conventional loans can allow 3% down versus higher minimums for repeat buyers—and many programs aim to reduce the upfront barrier to entry.
IF YOU’RE 2–3 YEARS AWAY, HOW TO PREPARE
- Improve credit by addressing payment history, utilization, and other score factors.
- Save regularly. Practice a mortgage payment by setting aside a hypothetical payment each month to see how it fits your lifestyle and budget—you can pay rent from that account while you practice saving.
Thanks for the questions. If you want more personalized guidance, reach out to a mortgage professional in your area to review your unique situation and next steps.