First-Time Homebuyer Guide: 10 Steps to Purchase Your First Home

Buying a home for the first time is a big deal. It’s as exciting as it is overwhelming, and preparation is key. This means figuring out the right timing, getting your finances in shape, and knowing the programs and tools that can make the process smoother.

This first-time homebuyer guide breaks down who qualifies as a first-time buyer, first-time homebuyer benefits, and the steps to help you confidently navigate your purchase.

While the journey is unique for everyone, a few telltale signs indicate you might be emotionally ready to purchase your first home:

• Do you crave the autonomy of owning your own place?
• Are you eager to have control over details like paint colors and tile choices?
• Do you need more space, such as a second bedroom for a child, your own garden, or a yard for your dog?
• Are you willing to handle maintenance yourself, without relying on a landlord (and their midnight visits to fix your broken heater)?
• Are you prepared for the responsibility and long-term financial commitment?

A lot goes into buying a home for the first time, but a little preparation goes a long way. Here’s a first-time homebuyer checklist to help you confidently navigate the mortgage loan process.

Step 6: Start Your Home Search

If you haven’t already, do some initial research into house types and neighborhoods. Look into possible commute times, local schools, and other amenities and community features important to you. You may think you know what to look for when buying a house, but as a first-time homebuyer, it helps to have a pro on your side. A good real estate agent can help you navigate the home-buying process, save money if they know the area values well, give you negotiating advice, schedule showings, and more. If you’re looking for an agent, ask around for a referral, use an online directory, or do a quick online search for local agents. Choose an agent who specializes in working with buyers like you or the specific type of property you want to buy. Note that real estate agents usually get paid by commission, seller concession, or a percentage of the listing agent’s fee.

Step 7: Make an Offer

Found your dream home? Here are some tips and advice for first-time homebuyers:

• Negotiate. Research comparable homes in the area to see what they’ve sold for. Consider factors like square footage, number of rooms, and lot size to make a fair offer on the house. A good real estate agent can help guide you on pricing and handling counteroffers.
• Use earnest money. This is a deposit of good faith that shows the seller you’re serious about buying their property. If your offer is accepted, the money goes toward the final purchase price.
• Add contingencies. These are conditions that must be met for the transaction to go through. Common contingencies are related to the inspection or appraisal, successful financing, or title search results. They can protect you if something unexpected comes up.

Be prepared for competition if you’re in a hot market where bidding wars take place. Also be ready for some back and forth after making your offer. This is when having a real estate agent or lawyer in your corner can help.

Step 8: Get a Home Inspection

Once your offer is accepted, it’s tempting to want to move in as quickly as possible. But regardless of how perfect a home may seem during a casual walk-through, a home inspection is a good idea. An inspector can identify issues that could require expensive repairs down the line, such as those related to the home’s plumbing, mechanical systems, and structure. Once the inspection is complete, you should receive a report within a couple of business days. With this information in hand, you may be able to go back to the seller to further negotiate the price of the home and necessary repairs.

First-time homebuyer tip: Unlike an appraisal—an objective property valuation your lender orders and you pay for before closing—a home inspection typically isn’t required. But including one as a contingency clause when you present your offer is considered a smart move. Check your lender’s requirements and shop around for quotes to get the best deal.

Step 9: Choose Homeowners Insurance

While homeowners insurance isn’t mandated by law, many lenders won’t let you close on the property without it. Your monthly premium is often paid for from your escrow account, though you may need to pay an upfront fee at closing. A standard homeowners insurance policy typically includes:

• Dwelling coverage for the main residence, attached structures, and key systems (like air conditioning and electrical)
• Personal property coverage for your belongings
• Personal liability coverage for injuries or property damage you’re legally responsible for, whether they occur on or off your property
• Medical payments coverage for limited medical expenses for guests injured in your home, regardless of fault

You can also add extra coverage for other structures on your property (like detached garages or sheds), high-value items, or specific risks not included in a standard policy. The cost of homeowners insurance varies based on factors like location and property price. Using SoFi’s online comparison tool or getting quotes from an independent agent could help you get the best price.

Step 10: Close on Your Home

One of the final steps to becoming a first-time homebuyer is to choose the mortgage loan best suited to you. Options include:

• A fixed-rate mortgage, where the interest rate stays the same for the entire loan term, regardless of market fluctuations.
• An adjustable-rate mortgage, which may start with a lower fixed rate that can change after an introductory period (typically three to 10 years).
• An interest-only mortgage, where payments include interest only for a period of time (usually five to 10 years) before converting to a standard loan structure with principal and interest payments.

A few other things will happen during closing:

• The escrow company/closing agent will calculate legal fees, transfer taxes, and closing costs, as well as coordinate the transfer of ownership via the deed.
• The lender provides documentation of the loan, including the mortgage agreement, closing fees, and other disclosures. You’ll receive a closing disclosure three or more business days before the scheduled closing date.
• The title company will furnish documentation of clear ownership in the form of a title insurance policy.

Before closing, schedule a final walk-through to ensure that any agreed-upon repairs have been completed and the home has been left in satisfactory condition. Review the loan documents, and if everything checks out, sign on the dotted line to get your new house keys.

Settling In: Move-In and New Homeownership Tips

Buying a home for the first time can feel complicated, but it doesn’t have to be. To keep things simple and avoid costly mistakes, here’s a first-time homebuyer checklist that covers steps to take after the sale:

• Put your closing documents somewhere safe.
• Create a list of everything you need for moving (such as a U-Haul rental or new furniture).
• Set up utility transfers and change of address.
• Schedule initial maintenance tasks (like cleaning HVAC filters, changing locks, or updating old appliances).
• Deep clean your home.
• Create a new monthly budget.
• Rebuild your savings or emergency fund.
• Update your budget based on any new expenses.
• Go over your homeowners insurance policy to ensure enough coverage.

As a first-time homebuyer, it doesn’t hurt to get tips and advice from friends and family members who also own their homes. Their insight can be invaluable to making the transition as easy as possible.