Buying your first home is one of the biggest financial decisions you'll ever make. It's also one of the most confusing. Between the jargon, the paperwork, and the sheer number of steps involved, it's easy to feel lost before you've even started looking at listings. This guide walks you through the entire process, from the first thing you should do to the moment you get your keys.

Step 1: Get your finances in order before anything else

Before you start browsing Zillow, take stock of where you stand financially. Three things matter most: your credit score, your savings, and your income stability.

Your credit score directly determines the interest rate you qualify for. A score of 740 or above typically gets you the best available rates. Scores between 620 and 739 will still qualify for most loan programs, but at higher rates. If you're below 620, work on improving your score before applying.

Your savings need to cover more than the down payment. Budget for closing costs (typically 2 to 4 percent of the purchase price), moving expenses, and a post-purchase emergency fund. You do not want to be house-rich and cash-poor in month one.

You don't need 20% down to buy a home. FHA loans allow as little as 3.5% down, and some conventional programs go as low as 3%. The tradeoff is private mortgage insurance, which adds to your monthly payment until you've built enough equity.

Step 2: Get pre-approved, not just pre-qualified

Pre-approval is the most important thing you can do before making an offer. It's not the same as pre-qualification. Pre-qualification is a rough estimate based on information you self-report. Pre-approval involves a full application, income verification, and a hard credit pull. It results in an actual commitment letter that sellers take seriously.

Without a pre-approval letter, most listing agents won't even schedule a showing in a competitive market. Sellers want to know you can close before they let you through the door.

The pre-approval process typically takes 24 to 48 hours. You'll need to provide recent pay stubs, two years of tax returns, two months of bank statements, and a government-issued ID. If you're self-employed, expect to provide additional documentation.

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Step 3: Find a home and make an offer

Your pre-approval letter tells you the maximum you can borrow. That's not necessarily what you should spend. Factor in your monthly comfort level, not just the ceiling. A good rule of thumb: your total housing payment (principal, interest, taxes, insurance) should not exceed 28 percent of your gross monthly income.

When you find a home you want, your real estate agent will help you make an offer. In a competitive market, your offer may need to come in above asking price. Your pre-approval letter, a strong earnest money deposit, and flexible closing terms all make your offer more attractive.

Step 4: The mortgage process

Once your offer is accepted, your lender will begin the formal underwriting process. Here's what happens:

  • Application: Your lender collects all documentation and locks in your rate.
  • Processing: A loan processor reviews your file, orders an appraisal, and verifies all information.
  • Appraisal: An independent appraiser confirms the home is worth what you're paying. The lender won't lend more than the appraised value.
  • Underwriting: An underwriter makes the final credit decision. They may issue conditions, meaning they need additional documentation before approving the loan.
  • Clear to close: All conditions are satisfied and your loan is approved. You receive your Closing Disclosure at least three business days before closing.

Step 5: Closing day

At closing, you'll sign a large stack of documents. Bring a government-issued ID and a cashier's check or wire transfer for your down payment and closing costs. The title company or closing attorney will walk you through every document you sign.

Once everything is signed and funds are transferred, you get the keys. The whole closing meeting typically takes 60 to 90 minutes.

What most first-time buyers wish they'd known

Talk to your lender before you talk to a real estate agent. Knowing your budget before you fall in love with a home saves you heartache. It also means you can move fast when the right home appears, and in most markets, speed matters.

Do not make any major financial moves after getting pre-approved. No new credit cards, no large purchases, no job changes. Your lender will pull your credit again before closing, and changes to your financial picture can delay or derail the loan.

Ask every question you have. There's no such thing as a dumb question when you're making the largest purchase of your life. A good loan officer will explain everything in plain language and never make you feel rushed.