Financial guide for first-time home buyers
A home is the largest purchase of your life — know your numbers before you fall in love with a house.
First-time home buying is exciting and financially consequential in equal measure. The wrong purchase — too much house, underfunded down payment, high-rate mortgage — can constrain your finances for a decade. The right purchase, made with clear eyes, builds equity and stability.
Start with the numbers: how much can you truly afford (not what a lender will approve), what your credit score qualifies you for, and whether now is the right time or if waiting 6–12 months to save more would meaningfully improve your terms. A 1% lower mortgage rate on a $500,000 home saves $175,000 over 30 years.
Action checklist
Work through the steps in order. Progress saves in this browser, without an account.
Know your numbers
6–12 months before
Run the true cost, including opportunity cost.
Tool: Buy vs Rent CalculatorNot what a lender approves — what fits your life.
Tool: Home AffordabilityEven a small rate cut saves you tens of thousands. Below 660? Follow the week-by-week Credit Roadmap.
Tool: Credit RoadmapArticle: Credit score factors explained
Get ready to apply
0–6 months before
Credit, DTI, down payment, and reserves all matter.
Tool: Mortgage Readiness Score6–12 more months of saving can change your terms.
Tool: Buy Now vs WaitLess debt means a larger approval and a better rate.
After you buy
First few years
Closing drains cash and new homes bring surprises.
If rates drop, refinancing may pay off.
Tool: Refinance AnalyzerArticle: When to refinance your mortgage
Tools for your situation
Free calculators and assessments selected for this guide.
- 1Home AffordabilityDTI analysis, PMI calculator, cash-to-close, and a 5-dimension Home Readiness Score
- 2Mortgage Readiness ScoreAre you truly ready to apply? Credit, DTI, down payment, and reserves scored
- 3Refinance AnalyzerBreak-even calculator if you plan to refinance after buying at a higher rate
- 4Buy Now vs WaitModel the 5-year cost of buying today vs saving more — with rent included
- 5Credit Score SimulatorSee how improving your credit score now could lower your mortgage rate
- 6Credit RoadmapPoor credit? A week-by-week program to a mortgage-ready score, tracked weekly
- 7Buy vs Rent CalculatorTrue cost comparison — break-even year, equity, and opportunity cost
Recommended reading
Have a specific question?
The AI Financial Tutor gives an educational answer to a finance question in about a minute. For example: “I'm a first-time home buyer looking at homes in the $450,000–$550,000 range. I have $80,000 saved and a credit score of 720. Am I ready to buy, and what should I know before I start?”