Prepare for your home-buying journey and secure your dream property
with these streamlined, step-by-step first-time home buyer guides.
With its persistent housing shortage, the real estate market in Vermont can be a bit frustrating. However, things are looking up: The number of homes for sale in June 2026 was up about 16% year over year, giving buyers more choices. Whether you’re looking for a condo in Burlington or a farmhouse in rural Barre, understanding the home-buying process can make for a smoother journey. This article will walk you through how to buy a house for the first time, from getting your finances in order to closing on your new home in the Green Mountain State.
What is a first-time homebuyer? The obvious answer is someone who has never owned a home before, but the legal definition is actually broader. You may qualify as a first-time homebuyer if you:
This matters because it means many more people may qualify for first-time homebuyer advantages in Vermont.
State and local programs are available to help homebuyers overcome common affordability barriers. The Vermont Housing Finance Agency (VHFA) offers options with competitive interest rates, low down payments, closing cost assistance, and more:
When buying your first home in Vermont, you can ask your loan officer about these programs during your application.
Recommended: Vermont First-Time Home-Buying Assistance Programs
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
You can break down the home-buying process into clear stages to help you manage your finances and navigate the more complex parts of the journey. These 11 steps for first-time homebuyers provide a roadmap to homeownership in Vermont.
Before you start your house hunt, one of the most important first-time homebuyer tips is to assess your finances. Your savings will need to cover the down payment and closing costs. And your monthly cash flow will have to accommodate not just mortgage payments but also property tax, homeowners insurance, any HOA fees, and regular maintenance. You’ll also want to make sure you have a credit score of at least 600 to qualify for a conventional mortgage. And your debt-to-income (DTI) ratio generally needs to stay under 45% for conventional loans, or 50% for government-backed loans.
To make sure you can cover more than just the costs directly related to housing, it’s a good idea to research the cost of living in the area you plan to move to.
Once you’ve assessed your finances, it’s time to set your budget. If you aren’t sure what you can afford as a first-time homebuyer, consider using a home affordability calculator. This tool can estimate your true buying power based on your income and debt payments.
Your down payment is a particularly important part of your budget. While putting down 20% of the purchase price can save you money on private mortgage insurance, it’s not required. Many private lenders accept down payments as low as 3%, and some government loans don’t require a down payment at all. You can use a down payment calculator to figure out how different percentages will affect your monthly mortgage payment.
Recommended: Average Monthly Expenses for One Person
There are many types of mortgage loans to choose from. It’s important to learn about each one so you can make the right choice for you and your financial situation.
Shopping around with multiple mortgage lenders allows you to compare borrowing costs, which can help you find the best available deal. Comparing rates and fees from three to five lenders can potentially save you thousands of dollars over the life of the mortgage.
Part of comparing offers is understanding the APR (annual percentage rate). Unlike the base interest rate, the APR includes both interest plus any lender fees. You’ll get a better idea of the total loan cost by comparing APRs.
It’s important to understand the difference between prequalification and preapproval. Prequalification is an informal estimate of your borrowing capacity. You may get prequalified with multiple lenders as you shop around.
The mortgage preapproval process, on the other hand, is a formal evaluation of your financial documents. Lenders will verify your tax returns and bank statements and then issue you a preapproval letter. The letter, which is valid for 30-90 days, strengthens your home offers by showing you have confirmed financing.
Having a good buyer’s agent on your side can simplify your home search. An agent tailors the search to meet your specific criteria and can even provide access to unlisted properties. They also navigate contract negotiations and all the digital paperwork that comes with buying a home.
It’s important to note that real estate commission fees are changing due to recent industry shifts, so make sure to familiarize yourself with those changes before signing an agreement with an agent.
Starting your property search is about more than just finding a house you like. Consider researching the local neighborhoods, school districts, and daily commutes to ensure the location fits your lifestyle.
During this process, take the time to understand laws against housing discrimination so you can identify any unfair lending practices or steering.
Recommended: Best Affordable Places in the U.S.
Once you’ve found the house that’s right for you, your agent will help you draft an offer letter. This document outlines your proposed price, contract contingencies, and transaction timeline. Once the seller receives it, they can accept or counter your proposal. If they accept your offer, you will submit an earnest money deposit to proceed to the contract stage.
After the seller accepts your offer, you can schedule a home inspection. This involves a professional examining the property’s structure, plumbing, and electrical systems, among other things. The service typically costs $300-$500.
A home inspection and appraisal may seem similar but they serve very different purposes. An inspection protects the buyer from hidden problems with the property. An appraisal is an objective analysis of the property’s value. This protects the lender from loaning the buyer more than the property is worth. Your lender will select a third-party appraiser to ensure objectivity, but you’ll need to cover the $300-$600 fee.
Before closing, you’ll complete a final walk-through of the property to check its condition. Take the time to review your closing disclosure paperwork, which your lender must give you at least three days before you close on the loan. Once you’ve signed the paperwork and provided proof of homeowners insurance, the title company will transfer property ownership to you. Congratulations!
An online calculator can be a big help in comparing home equity loan rates and terms. And it’s not the only calculator you’ll find helpful during your home equity loan process:
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
You can begin your new life as a homeowner by organizing a first-time homebuyer checklist:
Careful planning and financial prep are key to becoming a homeowner in Vermont. Using state assistance programs and selecting the right mortgage loan type can help you overcome affordability barriers. By following these first-time homebuyer tips and advice, you could be on your way to buying your first home in the Green Mountain State.
When buying a home for the first time, you need enough money to cover your upfront expenses and ongoing housing costs. Upfront expenses include your down payment and closing costs (2%-5% of the loan amount). Your monthly cash flow must accommodate monthly mortgage payments, property tax, homeowners insurance, and any homeowners association (HOA) dues.
The right mortgage option for a first-time homebuyer depends on your financial situation and income level. Conventional loans fit buyers with good credit scores and steady income. FHA and VA loans offer eligible borrowers low- or no-down payment options, and lower credit score requirements.
Generally, you qualify for first-homebuyer status in Vermont if you haven’t owned your primary residence for the past three years. Many local assistance programs for first-time buyers require you to occupy the property as your main residence and meet specific income guidelines.
The 30/30/3 guideline for homebuying suggests spending a maximum of 30% of your gross income on housing payments, which includes things like property tax and homeowners insurance. The rule also recommends having 30% of the home value saved in cash for a down payment and buffer. Finally, the total property price should not exceed three times your annual income.
Common mistakes that first-time homebuyers make include skipping mortgage preapproval and failing to check their credit score early. Some buyers only get a loan estimate from a single lender, which could mean missing out on a lower interest rate. Underestimating closing costs and ignoring ongoing maintenance expenses can also cause unexpected problems.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*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 .
Take the first steps to homeownership today. Get prequalified for an FHA loan online.
