Your FICO score determines what programs you qualify for and what rate you pay. Six months before applying, pull your credit reports from all three bureaus (free at annualcreditreport.com) and dispute any errors. Pay revolving balances below 30% utilization (ideally under 10%). Avoid opening new accounts. Pay every bill on time.

FICO bands matter. 740+ qualifies for the best conventional pricing. 680-739 is a middle tier with modest rate adjustment. 620-679 still qualifies for FHA and conventional with adjustments. Below 620, focus on FHA (580+ for 3.5% down, 500-579 for 10% down) or build credit before applying.

Don't apply for new credit (auto loan, credit card) in the 6 months before mortgage application. Each new account drops FICO 5-15 points temporarily and adds new debt to your DTI calculation.

The 28/36 rule: housing payment under 28% of gross monthly income, total debt obligations under 36%. Lenders will let you go higher (43-50% DTI) but living at the lender max leaves no margin for repair, vacation, or savings.

PITIA = Principal + Interest + Taxes + Insurance + HOA. Calculate the full payment, not just principal and interest. Property tax varies enormously by location: 0.3% effective rate in HI to 2.5% in NJ/IL. A $400K home in Texas costs roughly $700/month in property tax alone.

Build a target: housing payment + utilities + maintenance reserve (1% of home value annually) + furnishing should fit comfortably in your budget without touching emergency savings. Most first-time buyers underestimate maintenance and end up house-poor.

FHA: 3.5% down with 580+ FICO, 10% down with 500-579 FICO. Mortgage insurance for life if down < 10%, 11 years if down ≥ 10%. Best for sub-680 FICO or under-5% down.

Conventional: 3% down available for first-time buyers (HomeReady, Home Possible). PMI removable at 20% equity. Best for 680+ FICO with 5%+ down planning to stay long-term.

VA: 0% down, no monthly mortgage insurance, eligible veterans. Almost always the best option if eligible.

USDA: 0% down for eligible rural and suburban properties (most of the country qualifies). Income limits apply.

Down Payment Assistance (DPA): grants, forgivable seconds, and deferred seconds layer on top of any first mortgage. State HFA + city + occupation-specific programs available; teachers, firefighters, healthcare workers often have dedicated programs.

Pre-qualification is informal - lender asks you a few questions and gives a ballpark. Useless in competitive markets.

Pre-approval is real - lender pulls your credit, reviews tax returns, verifies assets, and issues a written commitment. This is what sellers want to see with offers.

Multiple pre-approvals within a 14-day window count as one credit inquiry under FICO's rate-shopping rules. Get quotes from 3-5 lenders to compare. Look at APR (which includes fees) not just the headline rate.

Find an agent who specializes in first-time buyers in your target market - they'll explain disclosures, inspect-ability, and local conventions you don't know to ask about.

Tour 8-15 homes before making an offer. You're training your eye on what good condition, good layout, and good location look like in your price range. The 5th house at the right price will look better than the 1st at the same price because your reference frame is calibrated.

When you make an offer, write a clean offer: pre-approval letter, earnest money 1-3% of price, inspection contingency (always), financing contingency, appraisal contingency. In hot markets some buyers waive contingencies; understand the risk before doing this.

Always pay for an independent home inspection. $400-700 typical. The inspector finds the issues you missed. Pay attention to: roof age, electrical panel, plumbing material (galvanized = problem), HVAC age, foundation, water damage signs, and pests.

Negotiate based on inspection findings. You can ask for repairs, a credit toward closing, or price reduction. Major issues (foundation, roof, HVAC over 15 years old) are the right items to push on.

Appraisal is ordered by your lender. If it comes in below offer price, you have three options: (1) seller reduces price to match, (2) you increase down payment to cover the gap, (3) walk away (with appraisal contingency).

Closing typically happens 30-45 days after contract acceptance. Final walkthrough day-of-close - verify the home is in same condition as inspection.

Closing costs run 2-5% of loan amount. Sellers can credit up to 6% (FHA) or 3-9% (conventional, depending on down) toward your closing costs.

Bring: photo ID, certified or wire-transferred funds for closing, and patience. The closing itself takes 1-2 hours. You'll sign 50+ documents.

Don't make any major financial moves between application and close: no new credit cards, no large deposits, no job changes. Lenders re-pull credit and re-verify employment near closing - changes can blow up the loan.

Maxing out the affordability number. Lender approval is the ceiling, not the target. Live 10-15% below the max.

Skipping inspection to win a bid war. The repairs you didn't catch will cost 5-50x what the inspection saved.

Not budgeting for closing costs. 2-5% of loan amount on top of down payment. A $400K loan = $8-20K in closing costs.

Forgetting maintenance reserve. Budget 1% of home value annually for repair and replacement. New roof, new HVAC, new water heater - they'll all happen, just not in year one.

Treating PMI as a deal-killer. PMI on conventional drops off at 20% equity automatically. Don't avoid a great home just because you have to pay PMI for a few years.