Buying your first home is a sequence, not a leap, and the order matters more than any single decision in it. You check your credit, set a real budget, build your cash position, get preapproved, shop, make an offer, and close. Step one carries the most weight by far, because your credit score decides both whether you get approved and what rate you carry for the next 30 years, and it's the only step you can improve before you start. Here's the full sequence, in order, with what to actually do at each stage, plus how Roots Growth helps renters get step one moving.
Table of Contents
Step 1 Check Your Credit
Everything downstream is priced off this number, so start here and give yourself time to move it.
Pull all three of your credit reports free at AnnualCreditReport.com and read them line by line. Errors are common, and a single incorrect late payment or a collection that isn't yours can hold your score down. Dispute anything wrong immediately, because disputes take time to resolve and you want that clock running early. Start with how to check your credit report for free in 2026.
Then look at where your score sits against the thresholds that matter. Here's what the difference is worth on a 30-year mortgage.
FICO Score | Average 30-Year Rate on a $300,000 Loan |
760 and above | 6.63% |
740 to 759 | 6.71% |
720 to 739 | 6.81% |
700 to 719 | 6.89% |
680 to 699 | 6.98% |
660 to 679 | 7.07% |
640 to 659 | 7.17% |
620 to 639 | 7.33% |
Rate data from Experian's average mortgage rates by credit score, Curinos, July 2026.
According to myFICO, payment history is 35% of a FICO score and credit utilization is 30%, so the two fastest levers are paying everything on time and getting your card balances down. If your file is thin rather than damaged, adding on-time rent payments to your report is the most direct fix available to a renter. See what credit score do you need to buy a house.
Step 2 Set a Real Budget
Most first-time buyers budget off the purchase price. That's the wrong number. Budget off the total monthly payment, because that's what you actually live with.
Your payment includes principal, interest, property taxes, homeowners insurance, and mortgage insurance if your down payment is small. In a condo or a planned community, add the association dues. Any of those line items can move the real cost well above what a mortgage calculator that only handles principal and interest will tell you.
Then add the costs that never show up in a payment at all. Maintenance is the big one, and it's the expense renters most consistently underestimate because it's always been someone else's problem. Utilities usually rise when you move from an apartment to a house.
Set a number you could still cover in a bad month, not the maximum a lender will hand you. Those are almost never the same figure. Work through how much house can I afford as a first-time buyer before you talk to anyone.
Step 3 Build Your Cash Position
You need three separate pools of money, and confusing them is a common way to get stuck at the closing table.
The first is the down payment, and the minimum depends entirely on your loan type.
Loan Type | Minimum Down Payment | Minimum Credit Score |
FHA | 3.5% | 580, or 500 to 579 with 10% down |
Conventional 97, HomeReady, Home Possible | 3% | 620 |
VA | 0% | No program minimum, lenders often want 620 |
USDA | 0% | No program minimum, lenders often want 640 |
The second pool is closing costs, which are separate from the down payment and are paid at the same time. The third is a reserve you keep after closing, because a house will find something to need in the first year.
This is also where assistance comes in. There are roughly 2,624 down payment assistance programs nationally with an average benefit near $18,000, and they're specifically designed to fill these pools. Read down payment assistance and how to buy a home with little money down and first-time home buyer programs, a complete guide for renters.
Step 4 Get Preapproved
A prequalification is an estimate based on what you tell a lender. A preapproval is a decision based on documents the lender has actually verified. Sellers treat them very differently, and in a competitive market an offer without a preapproval letter often doesn't get read.
Expect to provide pay stubs, W-2s or tax returns, bank statements, and identification. The lender pulls your credit, verifies income and assets, and issues a letter stating what they're willing to lend.
Shop at least three lenders. Credit bureaus treat multiple mortgage inquiries in a short window as a single event, so comparison shopping doesn't damage your score the way people fear.
Pick your loan program during this step, not after. FHA, conventional, VA, and USDA carry different down payment minimums, different credit floors, and very different mortgage insurance rules. Compare them in first-time home buyer loans, FHA vs. conventional vs. VA vs. USDA.
Step 5 Shop for the Home
Now, and only now, start looking. Shopping before preapproval is how people fall in love with houses they can't finance.
Get a buyer's agent and be direct with them about your budget ceiling and your must-haves. Write down your non-negotiables before you tour anything.
Pay attention to the things you can't change. Location, lot, layout, and school district are fixed. Paint, fixtures, flooring, and landscaping are not. First-time buyers routinely reject good houses over cosmetics and accept bad ones over staging.
Keep your finances completely still while you shop. Don't open new credit, don't finance a car, don't change jobs if you can avoid it, and don't make large unexplained deposits. Your loan is re-verified before closing and any of those can unwind it.
Step 6 Make an Offer
When you find the house, your agent submits a written offer. It sets the price, the closing timeline, the contingencies, and the earnest money deposit you put up to show you're serious.
Contingencies are your exits. A financing contingency lets you walk if your loan falls through. An inspection contingency lets you walk or renegotiate based on what an inspector finds. An appraisal contingency protects you if the home appraises below the contract price. Waiving them makes an offer more attractive and makes you meaningfully more exposed, which is a poor trade for a first-time buyer.
Once both sides sign, you're under contract and your earnest money goes into escrow. The house isn't yours yet, but the clock has started.
Step 7 Inspection Appraisal and Closing
Three things happen in parallel between contract and closing, and each one can change the deal.
The inspection is yours. You hire the inspector and you receive the report. Attend it if you can, because watching an inspector work teaches you more about the house than the document will. Use the findings to request repairs, request a credit, or walk away under your inspection contingency.
The appraisal is the lender's. They won't lend more than the home is worth, so if the appraisal comes in below the contract price you either renegotiate, cover the gap in cash, or exit under your appraisal contingency.
Underwriting runs alongside both. The lender re-verifies everything, which is why keeping your finances still matters right up to the day you sign. Then comes the final walkthrough, a review of your closing disclosure against the estimate you were given, and signing. Keep every document you sign, then start a maintenance fund the same month you move in.
Start Step One Today
Steps 2 through 7 all happen after you decide to buy. Step 1 is the one you can start right now, while you're still renting, and it's worth more than everything else combined.
Payment history is 35% of your score and it's exactly what most renters are missing. You already make the largest payment in your budget every month, and by default none of it reaches the bureaus, because landlords don't report the way lenders do. Fixing that turns an expense you already have into credit history you don't.
The renters who close smoothly are the ones who started building their file six to twelve months before they talked to a lender. Read from renter to homeowner, how to get mortgage-ready while you rent.
That's the idea behind Roots Growth. For $10 a month, members complete short financial education challenges, earn Investable Rewards™, and deploy those rewards into the Roots real estate fund, credit repair, home-purchase services, and other Growth Market partners. Rent reporting, credit monitoring, and Rooty, your AI Wealth Coach, are all part of the toolkit.
Start step one with Roots Growth →
Frequently Asked Questions About Buying Your First Home
What is the first step to buying a house?
Checking your credit. Pull all three reports, dispute any errors, and see where your score sits against the thresholds that gate each loan program. Everything downstream is priced off that number, and it's the only step you can meaningfully improve before you start. Start with how to check your credit report for free in 2026.
How much money do you need to buy your first home?
Less than most renters assume, but it comes in three separate pools: the down payment, the closing costs, and a reserve you keep after closing. Minimum down payments run from zero on VA and USDA to 3 percent on conventional low down payment programs and 3.5 percent on FHA. Assistance programs exist specifically to help cover the first two. See down payment assistance and how to buy a home with little money down.
What credit score do you need to buy a house?
It depends on the loan. FHA allows 580 with 3.5 percent down and 500 to 579 with 10 percent down. Conventional 97, HomeReady, and Home Possible start at 620. VA and USDA set no program minimum, though lenders commonly want 620 and 640 respectively. If you're under those lines, Roots Growth reports your on-time rent so payment history starts building now.
What is the difference between prequalification and preapproval?
A prequalification is an estimate based on information you tell the lender. A preapproval is a decision based on documents the lender has verified, including pay stubs, tax records, bank statements, and a credit pull. Sellers take preapprovals seriously and often won't consider an offer without one.
Should you get a home inspection?
Yes. The inspection is the one report in the process that works for you rather than for the lender or the seller. It tells you what you're actually buying and gives you the leverage to request repairs, request a credit, or walk away under your inspection contingency.
What happens if the appraisal comes in low?
The lender won't lend more than the home is worth, so a low appraisal creates a gap between the loan and the contract price. You can renegotiate with the seller, cover the difference in cash, or exit the contract if you kept an appraisal contingency in your offer.
Can you buy a house while renting?
Yes, and most first-time buyers do. Renting isn't a disqualifier for any loan program or assistance program. The usual obstacle is a thin credit file rather than renter status, which is why getting on-time rent onto your credit report is such a high-leverage move. Roots Growth does exactly that for $10 a month, and does paying rent build credit covers how it works.
About Roots Growth
Roots Growth is a micro-learning platform that helps renters turn financial education into actual wealth. When users complete short challenges they earn reward points that can be directly invested into real estate or used toward home-buying services. Roots Growth also has powerful credit-building tools, like rent reporting and real time credit monitoring. Ready to grow? Join the 29,500+ investors already building wealth today at investwithroots.com.
Disclosure: This content is for informational purposes only and does not constitute financial or legal advice.
Last Updated: July 2026
What's Next?
