Start with a plan
How do I know what I can afford as a first-time homebuyer?
Start with your monthly budget, then work backward to a home price. Your housing cost includes more than principal and interest: property taxes, homeowners insurance, mortgage insurance when required, and any HOA dues also matter. Set aside room for maintenance and the expenses you want to keep enjoying. A lender then reviews income, debts, credit, and available funds to estimate borrowing options. That review can produce a different number from your personal comfort limit. Compare both before shopping. Whether you are ready this month or planning for next year, the useful first step is the same: put your payment, savings, and timeline on one page.
Talk through my optionsWhat to think through
- Compare the full monthly cost. Two homes with the same asking price can have different taxes, insurance costs, and HOA dues.
- Your down payment is one part of the cash needed. Include closing costs, prepaid expenses, moving costs, and money left after closing.
- Lower down payment programs may be available to eligible borrowers. Compare mortgage insurance and overall cost alongside the cash you preserve.
- Use an early conversation to identify the next practical step: document income, review credit, build savings, or compare properties within your budget.
What to bring to a conversation
- Recent income records, such as pay statements and W-2s; documentation varies with how you earn.
- Recent bank or investment statements showing funds available for your purchase and reserves.
- A list of recurring debts and your preferred monthly housing budget.
- Your purchase timeline, target locations, and details of any planned gift funds.
Go to the source
Program details vary. Use these resources to explore the questions, then verify current requirements with your advisor.
CFPB: Preparing to shop for a mortgage CFPB: Understanding your Loan Estimate CFPB: Preparing your documentsEducational information, not a loan offer or eligibility determination. No result is guaranteed.