Your complete first-time homebuyer guide
Buying your first home is one of the biggest financial decisions of your life. This guide walks you through every step — no jargon, no confusion.
What to expect as a first-time buyer
The mortgage process can feel overwhelming the first time through. There are new terms, new documents, and a lot of moving parts. The good news: it's very manageable when you understand the steps and have the right team behind you.
This guide covers everything from checking your credit to getting your keys — in the order it actually happens. Bookmark it, share it, and refer back to it throughout your journey.
Step 01
Check and strengthen your credit
Your credit score is the first thing lenders look at. A score of 620 or higher qualifies for most conventional loans; 580+ for FHA; VA loans are more flexible. Pull your free report at AnnualCreditReport.com and dispute any errors before you apply. Pay down credit card balances below 30% of your limit, avoid opening new accounts in the 6 months before applying, and never close your oldest accounts.
Key takeaways
Check all three bureaus — Equifax, Experian, and TransUnion — errors on one may not appear on another
Even a 20-point score improvement can lower your interest rate meaningfully
Allow 30–60 days for disputed items to be resolved before applying
Step 02
Understand what you can afford
Before falling in love with a home, know your real budget. A general rule: total monthly housing costs (mortgage, taxes, insurance, HOA) should stay below 28% of your gross monthly income. Don't forget closing costs — typically 2–5% of the loan amount — and moving expenses. Your lender will calculate your debt-to-income ratio (DTI), which compares your monthly debt payments to your gross income. Most programs want a DTI below 43–45%.
Key takeaways
Use a mortgage calculator to estimate payments at different price points before you start shopping
Factor in property taxes — in Colorado Springs, these typically run 0.5–0.6% of assessed value annually
Budget 1% of the home's value per year for maintenance and repairs
Step 03
Get pre-qualified (then pre-approved)
Pre-qualification is a quick estimate of what you might borrow based on self-reported information. Pre-approval is a verified commitment — the lender has reviewed your documents and confirmed the amount. In a competitive market, sellers take pre-approved buyers much more seriously. Bring your last 2 years of tax returns, recent pay stubs, 2–3 months of bank statements, and a valid ID to your pre-approval appointment.
Key takeaways
Pre-approval letters typically expire in 60–90 days — time your application accordingly
Multiple mortgage inquiries within a 45-day window count as a single inquiry for credit scoring purposes
Self-employed? You'll also need profit & loss statements and possibly a CPA letter
Step 04
Choose the right loan type
First-time buyers have several loan options. VA loans are the best deal available if you've served — zero down, no PMI, competitive rates. FHA loans require as little as 3.5% down and are forgiving on credit. Conventional loans work best with strong credit and 10–20% down. USDA loans offer zero-down options for eligible rural areas. Your mortgage broker will compare all options side by side and recommend the best fit for your situation.
Key takeaways
Don't assume you need 20% down — most first-time buyers put down far less
Colorado also has state-level down payment assistance programs worth exploring
Ask about first-time buyer programs — some lenders offer reduced fees or rate incentives
Step 05
Make an offer and go under contract
Once you find a home you love, your real estate agent will help you craft a competitive offer. Key contingencies to include: financing (protects you if your loan falls through), inspection (lets you negotiate repairs or walk away), and appraisal (protects you if the home appraises below the purchase price). Once the seller accepts, you're officially under contract and the clock starts on your closing timeline — typically 30–45 days.
Key takeaways
Earnest money (typically 1–2% of the purchase price) is due shortly after going under contract
Never waive the inspection contingency — even on new construction
Notify your lender immediately when you go under contract so they can begin the formal loan process
Step 06
Navigate the loan process and close
After going under contract, your lender will order an appraisal, verify your documents, and submit your file to underwriting. Underwriters may ask for additional documentation — respond quickly to keep things on track. You'll receive a Closing Disclosure 3 business days before closing that details every cost. At closing, you'll sign a stack of documents, pay your closing costs and down payment, and receive your keys.
Key takeaways
Don't make any major financial changes after pre-approval — no new loans, job changes, or large purchases
Wire fraud is real — always verify wire instructions by phone before sending any funds
Bring a cashier's check or arrange a wire transfer for closing costs — personal checks are rarely accepted
Ready to start your homebuying journey?
Jerry and Lisa have helped hundreds of Colorado Springs first-time buyers get into their homes. Let's talk about your situation.
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