Prepare for your home-buying journey and secure your dream property
with these streamlined, step-by-step first-time home buyer guides.
Buying your first home in Maryland is a major milestone, but it takes some planning to get it right. This guide breaks the process down into 11 manageable steps to help you move forward with confidence. We’ll cover how to get started, explore your funding options, and uncover the local assistance programs available to you.
What is a first-time homebuyer, technically speaking? While the term might seem straightforward, the U.S. Department of Housing and Urban Development (HUD) has specific criteria you should know. Generally, you qualify as a first-time homebuyer if you haven’t owned a principal residence at any point in the three years leading up to your new home purchase.
Certain personal circumstances can also make you eligible. For instance, if you only owned a home with a former spouse, you’re considered a first-time homebuyer. You also qualify if you only owned a home that did not sit on a permanent foundation, such as certain manufactured homes. Knowing what a first-time homebuyer is can help you determine your eligibility and ensure you don’t miss out on assistance programs available in Maryland.
Buying your first home in Maryland can unlock significant financial advantages. The state offers various programs designed to make homeownership more accessible, including options for low- or no-down-payment loans and more affordable financing. Eligibility for Maryland first-time home-buying assistance programs generally depends on your income, credit history, and where the property is located. For instance, the Maryland Mortgage Program offers special loans and down payment assistance to help both first-time and repeat buyers get into a home.
Buying your first home is a big deal, and it’s normal if the process feels a little overwhelming at first. To make it more manageable, we’ve broken the journey into 11 clear steps. Use this guide as your roadmap, complete with tips and advice to help you navigate the process smoothly.
Before you start browsing listings, the most important first step is to get a clear picture of your finances. You’ll want to budget for more than just your monthly mortgage payment — remember to account for the down payment, property taxes, homeowners insurance, and ongoing maintenance costs.
It’s also a good time to check your credit score, as a higher score can help you snag better interest rates. (If needed, check out tips on establishing credit before you apply for a loan.) Aim to keep your debt-to-income ratio below 43% to make qualifying for a conventional loan easier, though keep in mind that some lenders will consider ratios up to 50%.
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When setting your budget, it’s easy to focus only on the mortgage, but don’t forget to include property taxes, homeowners association (HOA) dues, and the ongoing costs of maintenance. It’s also smart to set aside money for the hidden costs of moving — things like purchasing furniture, buying appliances, and even basic landscaping. If you’re unsure where to start, our home affordability calculator can give you a better sense of your budget before you begin shopping.
Homebuyers often aim for a 20% down payment of the purchase price to avoid private mortgage insurance, or PMI. This large down payment could help you secure a favorable interest rate. However, the minimum down payment for first-time buyers with a conventional mortgage can be as low as 3%, while some government-backed loans might not require any down payment at all. A down payment calculator can help you understand how much you will need based on the home price.
Not all mortgages are the same, and choosing the right one can make a huge difference in your monthly payments. There are several types of mortgage loans available, and finding the one that fits your unique financial situation is the key to a successful purchase.
Not all lenders are created equal. Taking the time to compare a few different options can help you secure better loan terms and find a lender who is responsive to your questions. When you’re comparing offers, don’t just look at the interest rate; look at the total cost. Keep in mind that the APR (annual percentage rate) includes your interest rate plus certain fees and discount points, but it doesn’t cover every single closing cost, so read your loan estimates carefully.
It’s easy to confuse prequalification vs. preapproval, but they are distinct steps in the buying process. Think of prequalification as a rough ballpark estimate of what you might be able to borrow. You can get prequalified with multiple lenders — in fact, we encourage it! — without affecting your credit score.
Preapproval, on the other hand, is the real deal: a formal evaluation where a lender verifies your income, tax returns, and bank statements to determine exactly how much they’re willing to lend you. This mortgage preapproval process is what really establishes your borrowing capacity.
A preapproval letter shows sellers you’re a serious shopper with verified backing. This status could give you an advantage over unapproved buyers in a competitive market.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
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Navigating the home-buying process solo can be stressful, but a good buyer’s agent can act as your guide, advocate, and time-saver. Their job is to protect your interests, manage the paperwork, and help you find a home that actually fits your needs.
Before working with an agent, read about how real estate commission fees are changing to understand how compensation works.
Your search will be as unique as your lifestyle. Before you start scheduling viewings, take some time to really think about what matters to you daily: Are you prioritizing a short commute? Do you need to be in a specific school district? What is the overall cost of living in the neighborhoods you’re eyeing?
As you research, it’s helpful to understand your rights as a first-time homebuyer. Federal laws protect buyers from housing discrimination based on race, sex, or family status. If you encounter discrimination, you have the right to file a complaint.
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Once you’ve found The One, your agent will help you draft an offer letter. This document outlines your proposed price, your timeline for closing, and any contingencies — which are basically safety clauses that allow you to back out if something goes wrong with the inspection or financing. If the seller accepts, you’ll move into the contract stage and provide an earnest money deposit, which acts as a show of good faith that’s held in an escrow account until closing.
If the seller accepts your offer, it’s time for a home inspection. Think of this as a health check for the house. A professional inspector will thoroughly examine the home’s major systems — like the plumbing, electrical, and roof — to help you identify any potential red flags before you finalize the purchase.
The cost is $300-$500, depending on the size of the home, and you pay this fee out of your own pocket. Review your lender’s requirements before scheduling an inspection because certain loan types mandate specific inspections. You can use the inspection report to negotiate repairs or a price adjustment with the seller before you complete the closing process.
While an inspection looks at the condition of the house, an appraisal is all about its value. Lenders require this to make sure the home is actually worth the amount they’re lending you, protecting both you and them from overpaying.
Your lender will provide the appraiser, who is selected randomly. As with an inspection, an appraisal involves someone visiting the property, which you or your agent will help coordinate. The buyer usually pays the cost of the appraisal, which is typically $300-$600.
You’ve made it to the finish line! Closing is the final step where the deed is transferred and the house officially becomes yours. Before the lender releases the funds, you’ll need to secure homeowners insurance. It’s a good idea to double-check that your policy covers regional risks — like flooding or storm damage — so you’re fully protected from day one.
You’ll receive a closing disclosure document three business days before signing paperwork. This document outlines your loan terms, monthly payments, and final closing costs. Conduct a final walk-through to ensure the seller completed all agreed repairs. Once the paperwork is signed and the loan is funded, you will receive the keys to your new home.
Congratulations on getting the keys! While it’s time to celebrate, moving in brings a new set of responsibilities. To ease the transition, start with a move-in checklist. One of your first priorities should be transferring utilities — water, gas, electric, and trash — so everything is ready to go the moment you step through the door.
Another step on the first-time homebuyer checklist is scheduling your first round of home maintenance tasks. Change all the exterior door locks to ensure your personal safety. Install clean air filters in your heating and cooling systems to improve efficiency. Clean out the gutters to prevent water damage to your foundation.
Beyond physical tasks, managing your long-term financial health is a primary responsibility. Starting a monthly budget for regular home expenses can help manage ongoing costs. It is also wise to build up your emergency fund for unexpected property repairs.
Buying your first home in Maryland is a significant milestone. Reviewing state assistance programs and federal loan options can help you find ways to overcome potential financial barriers. Working with a buyer’s agent, checking your credit early, and setting a realistic budget can help you navigate the mortgage process and secure a property that fits your long-term financial goals.
To buy a house for the first time, you need enough money for your down payment and closing costs. Closing costs range from 2% to 5% of the mortgage amount. Down payments for conventional loans range from 3% to 20% of the purchase price, while government-backed loans require 0%-3.5%.
As a first-time homebuyer, it’s important to understand that conventional loans require a credit score of at least 620, with better terms going to individuals with higher scores. FHA loans allow you to qualify with a credit score of 580 if you make a 3.5% down payment, or a score as low as 500 if you put down 10%. Other government-backed options such as VA loans don’t establish a set minimum credit score requirement, but lenders typically want scores of at least 620.
The home-buying process begins by reviewing your finances and credit score, then getting preapproved for a home loan. Next, you work with a real estate agent to search for homes and submit an official offer when you find the right property. After your offer is accepted, you complete a home inspection, secure homeowners insurance, and attend closing to finalize the purchase.
Before buying a house, it is important to understand that the list price is just one part of the total cost. Closing costs, property taxes, home insurance, and maintenance are all considerations for your budget. Also, your credit score impacts the interest rate you receive, so it is a good practice to check it before beginning your search.
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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
This article is not intended to be legal advice. Please consult an attorney for advice.Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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