A couple I know got pre-approved for $425,000, found a house they loved at $410,000, and felt like they were being responsible by staying under budget. Six months after closing, they were drowning. Property taxes were $200/month higher than expected, the HVAC died ($8,500), and they’d burned through their savings just getting moved in. They could afford the mortgage. They couldn’t afford the house.
That’s the gap this checklist fills. These aren’t the first time home buyer questions you’ll find in a generic “10 tips” article. These are 27 specific questions, organized across six stages of the buying process, that protect you from the mistakes first-time buyers actually make. The expensive ones.
Print it, bring it to every meeting, and don’t skip ahead. The order matters.
Financial Readiness
Before you open Zillow, open your bank statement.
1. How much home can I realistically afford?
The bank will approve you for more than you should spend. That’s not a conspiracy. It’s just how underwriting works. They’re calculating your maximum debt capacity, not your comfortable living situation.
Keep total housing costs (mortgage, taxes, insurance, HOA) below 28% of your gross monthly income. And treat that as a ceiling, not a target. At the $340,000 median home price in many metro areas, even a small miscalculation puts real pressure on your monthly budget.
2. Do I have enough saved for a down payment and reserves?
Your down payment isn’t the only cash you need. Not even close.
Here’s the real list: down payment, closing costs (2-5% of the price), moving expenses, immediate repairs, and an emergency fund. You should have three to six months of expenses still in the bank after closing. If that sounds aggressive, think about it this way: your furnace doesn’t care that you just spent your last dollar on closing costs.
Putting down less than 20%? Budget for PMI on top of everything else.
3. What is my credit score, and should I improve it before applying?
Your credit score directly controls your interest rate. On a 30-year loan, the difference between 6.5% and 7.0% is roughly $45,000 in total interest. Your score is worth real money.
Conventional loans require a minimum 620. But 740+ is where you unlock the best rates. If you’re sitting at 680, a few months of paying down credit card balances and avoiding new inquiries could bump you into a better tier. That patience pays off every single month for 30 years.
4. Am I aware of down payment assistance programs I might qualify for?
Most first-time buyers don’t know these exist. Federal, state, and local programs offer grants, forgivable loans, and low-interest second mortgages that can cover part or all of your down payment.
Check your state housing finance agency for 2026 programs. FHA loans allow 3.5% down. Some conventional programs go as low as 3%. Ask your lender directly about assistance programs. They don’t always volunteer the information, but a good one will.
Mortgage and Financing Questions
Your mortgage is likely the largest debt you’ll ever carry. Shopping the first offer you receive is like buying the first car you test drive.
5. What’s the difference between pre-qualification and pre-approval?
Pre-qualification is a guess. Pre-approval is a commitment.
A pre-qualification is a rough estimate based on self-reported numbers with no credit check and no document review. A pre-approval means a lender has verified your income, assets, debts, and credit history and issued a conditional commitment for a specific amount. Sellers know the difference. In a competitive 2026 market, a pre-approval letter can be the thing that wins you the house.
6. What type of mortgage is best for my situation?
Fixed-rate, adjustable-rate, FHA, VA, USDA, conventional: each has different requirements and trade-offs. Don’t just accept whatever your lender defaults to.
Staying more than 5-7 years? A 30-year fixed offers the most predictability. A veteran? VA loans often require zero down payment and no PMI, so explore those first. Buying in a rural area? USDA loans might work. Ask your lender to compare at least three options side by side with actual numbers, not just descriptions.
7. What will my total monthly payment actually be?
This is where first-time buyers get burned most often.
Your payment isn’t just principal and interest. It’s principal + interest + property taxes + homeowners insurance + PMI (if applicable) + HOA dues (if applicable). I’ve seen buyers budget for a $1,800 P&I payment and end up with a $2,450 total payment once everything’s included.
Get the full PITI breakdown plus PMI and HOA. That total is your real number.
8. Are there any hidden fees in the loan?
Origination fees, discount points, application fees, underwriting fees, prepayment penalties. They add up to thousands, and they vary wildly between lenders.
Request a Loan Estimate from each lender you’re considering. It’s a standardized form that makes comparison simple. Pay special attention to prepayment penalties. You don’t want to get charged for paying off your own loan early.
9. Should I lock my interest rate, and for how long?
Rates move daily. A rate lock guarantees your quoted rate for a set period, usually 30 to 60 days, while your loan is processed.
Ask about the cost of the lock, how long it lasts, and what happens if closing gets delayed past the lock window. In a volatile rate environment, locking sooner rather than later is usually the safer bet. But also ask about float-down options, since some locks let you take advantage of rate drops.
House Hunting Essentials
Now comes the fun part. Just don’t let a granite countertop make you forget about the foundation.
10. What are my true must-haves versus nice-to-haves?
Without a clear list, emotion takes over. You fall in love with an open floor plan and overlook the 45-minute commute, the single bathroom, or the school district you didn’t research.
Sit down before your first showing and separate non-negotiables (number of bedrooms, location, commute distance) from nice-to-haves (updated finishes, big yard, two-car garage). Here’s the thing: you can renovate a kitchen. You can’t move a house closer to your office.
11. How long has this property been on the market?
A home sitting for 60+ days is either overpriced or has issues. Either way, it tells you something.
Ask your agent to pull the listing history. Multiple price drops? That’s a seller who’s getting more motivated by the week. A house that’s been listed for 90 days is in a completely different negotiating position than one that went live yesterday.
12. What are the property taxes, and could they increase after I buy?
Here’s a surprise that catches first-time buyers off guard: some counties reassess property taxes at the purchase price. The seller might be paying $3,200/year in taxes on a home they bought for $180,000 in 2010. You buy it for $350,000, and suddenly your tax bill is $6,100/year.
Get the current annual tax amount, check the county’s reassessment rules, and budget for the potential new amount, not the seller’s current bill.
13. Is there an HOA, and what does it require?
HOA fees range from $50 to $500+ per month. Rules might restrict paint colors, parking, rentals, even what you put on your porch. And special assessments (one-time charges for major repairs) can hit for thousands with little warning.
Request the HOA financial statements, recent meeting minutes, and the full CC&Rs before you make an offer. Check the reserve fund. A poorly funded HOA is a ticking time bomb for special assessments.
14. What is the neighborhood like at different times of day?
A quiet Tuesday afternoon showing tells you nothing about Friday night or Monday morning rush hour.
Visit the neighborhood at least twice at different times. Drive your actual commute during rush hour. Walk the block. Talk to a neighbor if you can. You’re not just buying a building. You’re buying a daily experience.
Making an Offer on Your First Home
You found a place. Now don’t overpay for it.
15. What have similar homes sold for recently?
The listing price is the seller’s wish. Comparable sales (“comps”) are reality.
Ask your agent for a comparative market analysis: similar homes sold within the past 3-6 months, within a half-mile or so. That data is your negotiation foundation. If every comparable home sold for $330,000 and this one’s listed at $365,000, you have leverage. If comps are at $370,000, the listing might actually be a deal.
16. How much earnest money should I put down?
Earnest money (typically 1-3% of the price) shows the seller you’re serious. It’s held in escrow and applied to your purchase at closing, but you can lose it if you back out outside your contract terms.
Understand exactly when your deposit is refundable. This is where contingencies become your best friend.
17. What contingencies should I include?
Contingencies are escape hatches that let you walk away without losing your earnest money. The big three: inspection, financing, and appraisal.
Tip: Be very, very careful about waiving contingencies to win a bidding war. Skipping an inspection contingency to beat another offer can save you $5,000 in negotiations and cost you $40,000 in hidden foundation problems. An aggressive offer is one thing. A reckless one is another.
18. Why is the seller selling?
A seller relocating for a job in two weeks will take a different offer than a seller who’s “testing the market.” Understanding their motivation gives you negotiating leverage you won’t get any other way.
Your agent can often get this information from the listing agent. Sometimes a flexible closing date matters more to the seller than a few thousand dollars, and that costs you nothing.
Inspections and Due Diligence
This is where you find out what you’re really buying. Do not skip this section.
19. Who should I hire for the home inspection?
A $400-$600 home inspection is the single best money you’ll spend in this entire process. It uncovers invisible problems: foundation cracks, faulty wiring, a roof with two years left, plumbing about to fail.
Hire a licensed inspector who is not recommended by the seller or the seller’s agent. Attend in person. Follow them around. Ask every question that pops into your head. Bring a good flashlight and a notebook so you can see dark corners and jot notes in real time. An inspector who discourages your questions isn’t a good inspector.
20. Are there signs of major structural, electrical, or plumbing issues?
Cosmetic problems (ugly paint, dated fixtures, worn carpet) are cheap and easy. Structural problems are the ones that break budgets.
Focus on: foundation cracks or settling, roof age and condition, electrical panel age (Federal Pacific and Zinsco panels are red flags), plumbing material (galvanized and lead pipes need replacement), water damage stains, and any sign of mold. A $15,000 foundation repair will ruin your first year of homeownership.
21. Do I need specialized inspections beyond the general one?
General inspections don’t cover everything. Depending on the home’s age and location, you might need separate inspections for termites, radon, sewer lines, septic systems, or well water.
Your inspector or agent can advise which ones apply. In older homes, a sewer scope ($150-$300) is almost always worth the cost, since replacing a sewer line runs $5,000 to $20,000.
22. Does the seller’s disclosure match the inspection findings?
Sellers are legally required to disclose known issues. Not all of them do.
Compare the disclosure to the inspection report line by line. If the seller checked “no water issues” but the inspector found water stains in the basement, that’s a conversation your agent needs to have immediately. Discrepancies don’t necessarily kill the deal, but they change what you should be asking for.
The Closing Process for First-Time Buyers
Almost there. These questions prevent last-minute financial surprises.
23. What are my total closing costs?
Closing costs run 2-5% of the purchase price. On a $350,000 home, that’s $7,000 to $17,500 on top of your down payment.
You’ll receive a Closing Disclosure three days before closing. Compare it to your original Loan Estimate and question any significant increases. Some fees are negotiable. Others, like title insurance, might have room if you shop around.
24. Did the appraisal come in at or above the purchase price?
If the appraisal comes in low, the lender won’t finance the full amount. You’re now in a gap situation. Your options: ask the seller to lower the price, split the difference, cover the gap with cash, or use your appraisal contingency to cancel the deal.
None of those options are fun. But having an appraisal contingency means you won’t be forced into paying more than the home is worth.
25. Do I have the right homeowners insurance?
Your lender requires insurance before closing. But standard policies don’t cover floods or earthquakes, two things that surprise first-time buyers who assumed “homeowners insurance” meant “everything.”
Get quotes from at least three companies. Make sure coverage is at full replacement cost (not just market value). And specifically ask about flood and earthquake risk for your property, even if you think you’re not in a risk zone. FEMA maps update, and surprises happen.
26. What should I check during the final walkthrough?
The walkthrough happens 24-48 hours before closing. It’s your last chance to confirm the home’s condition matches what you’re paying for.
Test every light switch, faucet, and appliance. Flush every toilet. Run the dishwasher. Verify that agreed-upon repairs were actually completed. Confirm the seller’s belongings are out. Bring a tape measure to double-check any spaces where your furniture needs to fit. If something’s wrong, tell your agent before you sit down at the closing table.
27. Do I understand everything I’m signing?
You’ll sign a stack of legal and financial documents that control the next 15-30 years of your financial life.
Ask for copies of the major documents a few days before closing so you can read them without time pressure. At the closing table, don’t be embarrassed to ask what something means. Every real estate attorney and title agent has been asked “what does this mean?” a thousand times. That’s literally their job.
Quick Reference Checklist
Financial Readiness
- Calculated a realistic budget (28% rule)
- Confirmed savings for down payment, closing costs, and reserves
- Checked and improved credit score if needed
- Researched down payment assistance programs
Mortgage and Financing
- Got pre-approved (not just pre-qualified)
- Compared at least three mortgage types
- Got full monthly payment breakdown (PITI + PMI + HOA)
- Reviewed Loan Estimates from multiple lenders
- Discussed rate lock timing
House Hunting
- Made must-haves vs. nice-to-haves list
- Checked days on market and price history
- Researched property taxes and reassessment rules
- Reviewed HOA fees, rules, and finances
- Visited neighborhood at different times
Making an Offer
- Reviewed comparable sales
- Understood earnest money terms
- Included key contingencies
- Learned seller’s motivation
Inspections and Due Diligence
- Hired independent, licensed inspector
- Reviewed report for major issues
- Ordered specialized inspections if needed
- Compared disclosures against findings
Closing Process
- Compared Closing Disclosure to Loan Estimate
- Addressed any appraisal gaps
- Secured adequate homeowners insurance
- Completed final walkthrough
- Read and understood all closing documents
First-Time Buyer Mistakes: Red Flags vs. Green Flags
| Red Flag (Costly Mistake) | Green Flag (Smart Move) |
|---|---|
| Skipping the pre-approval. You’re wasting everyone’s time, including your own, shopping without one. Sellers won’t take your offer seriously, and you have no idea what you can actually afford. | Getting pre-approved before your first showing. You know your real budget, sellers take you seriously, and you can move fast when you find the right home. |
| Spending your maximum approval amount. The bank approved you for $400,000. That doesn’t mean you should spend $400,000. Leave margin for repairs, surprises, and the life you want to live after buying a house. | Buying 10-15% below your max approval. This leaves breathing room for unexpected repairs, property tax increases, and the reality that homeownership costs more than the mortgage payment. |
| Waiving the inspection to “win” the deal. A $25,000 foundation problem doesn’t care about your bidding strategy. The inspection is $400-$600. The gamble of skipping it is insane. | Insisting on an inspection contingency, always. You might lose a bidding war or two, but you’ll never accidentally buy a money pit. The right house will come along. |
| Forgetting closing costs exist. Budget 2-5% of the purchase price on top of your down payment. This surprises first-time buyers constantly. | Budgeting for closing costs from day one. Factor in 2-5% of the purchase price above your down payment, and set that money aside in a separate account so it’s ready at closing. |
| Making big financial changes before closing. Don’t open credit cards, finance furniture, or switch jobs between your pre-approval and closing. Lenders recheck your finances before finalizing, and changes can tank your approval. | Keeping your finances completely boring until closing. No new debt, no job changes, no large unexplained deposits. Your approval depends on your financial picture staying exactly the same. |
| Ignoring the neighborhood. You’re buying a location as much as a structure. Research schools, crime stats, development plans, and commute times before you fall in love with the kitchen. | Visiting at different times of day and researching thoroughly. Drive the commute during rush hour, walk the block at night, check school ratings, and look up future development plans before you offer. |
| Letting emotions drive the decision. Your dream home is only a dream home if you can afford it comfortably. Stick to your budget, trust the inspection, and be willing to walk away. There will be another house. | Setting a firm budget and walking away when the numbers don’t work. Emotional detachment isn’t cold. It’s how you avoid a $350,000 mistake. The right house at the right price always shows up eventually. |
Money-Saving Tips
- Negotiate seller concessions for closing costs. In many markets, you can ask the seller to cover 2-3% of closing costs as part of your offer. This doesn’t reduce the purchase price, but it keeps thousands of dollars in your pocket at the closing table.
- Compare at least three lenders and three insurance companies. The difference between the cheapest and most expensive lender can be $10,000+ over the life of the loan. Same goes for homeowners insurance. Thirty minutes of phone calls can save you real money.
- Use a first-time buyer program. State housing finance agencies, local governments, and nonprofits offer grants and forgivable loans that can cover part or all of your down payment. Some programs save buyers $5,000 to $15,000. Check your state’s housing agency website or ask a HUD-approved housing counselor.
- Buy in the off-season. Late fall and winter (November through February) tend to have less buyer competition. Sellers who list during the holidays are often more motivated, which gives you better negotiating leverage.
- Don’t over-improve before you move in. New homeowners love to gut the kitchen on day one. Resist that urge. Live in the house for six months first. You’ll have a much better sense of what actually needs changing versus what you just want to change.
- Shop title insurance. In most states, you can choose your own title insurance company, and prices vary significantly. A few phone calls can save you $500 to $1,500 at closing.
- Challenge your property tax assessment. If your county reassesses at the purchase price and the number seems high, you have the right to appeal. Many homeowners who appeal get reductions. The process is usually free and can save you hundreds per year.
- Skip the extended home warranty (usually). Sellers sometimes offer a one-year home warranty as a sweetener. These cost $400 to $600 and have a reputation for denying claims. In most cases, you’re better off putting that money into your emergency fund.
Glossary
Earnest Money: A deposit (typically 1-3% of the purchase price) that you submit with your offer to show the seller you’re serious. It’s held in an escrow account and applied to your purchase at closing. You can lose it if you back out of the deal outside the terms of your contingencies.
Contingency: A condition written into your purchase contract that must be met for the deal to go through. Common contingencies include inspection, financing, and appraisal. If a contingency isn’t satisfied, you can typically walk away and get your earnest money back.
PMI (Private Mortgage Insurance): A monthly fee charged by lenders when you put less than 20% down on a conventional loan. PMI protects the lender (not you) if you default. It typically costs 0.5% to 1.5% of the loan amount per year and can be removed once you reach 20% equity.
Appraisal: An independent assessment of a home’s market value, ordered by your lender to ensure the property is worth the amount being financed. If the appraisal comes in lower than the purchase price, you’ll need to renegotiate, cover the gap with cash, or use your appraisal contingency to exit the deal.
Escrow: A neutral third-party account that holds funds during a real estate transaction. During the purchase, escrow holds your earnest money until closing. After closing, your lender’s escrow account collects a portion of each monthly payment to cover property taxes and homeowners insurance.
Title Insurance: A one-time policy purchased at closing that protects you (owner’s policy) and your lender (lender’s policy) against claims on the property’s ownership history, such as undisclosed liens, forgery, or recording errors. The lender’s policy is required; the owner’s policy is strongly recommended.
Closing Disclosure: A standardized five-page document you receive at least three business days before closing. It details your final loan terms, monthly payment, and all closing costs. Compare it line by line to your original Loan Estimate. Significant changes should be questioned immediately.
Helpful Tools and Resources
Spot water damage before the inspector even arrives. A handheld moisture meter lets you check walls, ceilings, and floors for hidden leaks during showings.
Home buying generates a mountain of paperwork: pre-approval letters, inspection reports, closing disclosures. An expanding file organizer keeps everything sorted and accessible.
A good home buying guide walks you through the entire process in plain language. Worth reading before your first showing so you know what to expect at every stage.
- HUD Homebuyer Resources: The U.S. Department of Housing and Urban Development’s comprehensive hub for first-time buyers, including guides on the buying process, fair housing rights, and links to local programs.
- CFPB “Buying a House” Tools: The Consumer Financial Protection Bureau’s step-by-step homebuying toolkit. Includes worksheets for comparing Loan Estimates, understanding closing costs, and exploring interest rates by location and credit score.
- HUD-Approved Housing Counselors: Free or low-cost counseling from certified professionals who can walk you through budgeting, loan options, and down payment assistance programs. No sales pitch, just guidance.
- Down Payment Resource: A searchable database of over 2,000 homebuyer assistance programs across the country. Enter your location to see grants, forgivable loans, and tax credits you might qualify for.
- AnnualCreditReport.com: The only federally authorized source for free credit reports from Equifax, Experian, and TransUnion. Pull all three before you start the mortgage process.
- FEMA Flood Map Service Center: Check whether a property is in a flood zone before you buy. Flood insurance is required in high-risk zones and can add $1,000 to $3,000+ per year to your costs.
- Realtor.com or Redfin: Free access to listing histories, price changes, days on market, and comparable sales data. Use these to verify what your agent tells you about a property’s value.
Frequently Asked Questions
How much money do I need to buy my first home in 2026?
Plan for 3-5% for a down payment (some programs allow less), plus 2-5% for closing costs, plus three to six months of expenses in reserve. On a $300,000 home, you’re looking at roughly $15,000 to $30,000 minimum, though assistance programs may bring that down.
What credit score do I need to buy a house?
FHA loans accept scores as low as 580 with 3.5% down. Conventional loans typically need 620. But the real magic number is 740+, which is where you get the best rates, which saves you thousands over the life of the loan.
How long does it take to buy a home from start to finish?
Typically two to four months. Pre-approval takes a week or two, house hunting varies wildly, and closing usually takes 30 to 45 days after an accepted offer. Delays happen, though, so don’t plan your moving truck for the day after your expected close date.
Should I buy a home in 2026 or wait for prices to drop?
Nobody can reliably predict where home prices or rates are going. If you have stable income, manageable debt, good credit, and enough savings, buying is a strong long-term move regardless of short-term market timing. Focus on whether you’re ready, not on trying to time the market.
What is PMI, and how do I avoid it?
Private mortgage insurance is a monthly fee your lender charges when you put less than 20% down. It protects them if you default, and it costs roughly 0.5-1% of your loan per year. Put 20% down to avoid it entirely, or request removal once you’ve built 20% equity. On FHA loans with less than 10% down, mortgage insurance sticks for the life of the loan, which is another reason to understand your loan type before committing.
Disclaimer: This article is for educational purposes only and does not constitute financial, legal, or real estate advice. Home buying decisions vary based on individual circumstances, location, and market conditions. Consult a qualified mortgage lender, real estate agent, and financial advisor before making home buying decisions. Information reflects general guidance as of early 2026 and may change.