Mortgage Guide for First-Time Home Buyers

Buying your first home means navigating credit scores, down payment requirements, and closing costs. This guide focuses on mortgage math, not legal or tax advice.

How much down payment?

Conventional loans often require 5–20% down. Below 20%, private mortgage insurance (PMI) adds 0.5–1.5% of loan amount annually. FHA allows 3.5% down with mortgage insurance for the life of the loan.

The 28/36 rule

Lenders typically cap housing costs at 28% of gross monthly income and total debt at 36%. On $6,000/month income, that suggests ~$1,680 max for PITI (principal, interest, taxes, insurance).

Pre-approval vs pre-qualification

Pre-approval involves a hard credit pull and document verification — sellers take it seriously. Get pre-approved before house hunting to know your exact budget.

Closing costs budget

Expect 2–5% of purchase price in closing costs (appraisal, title, origination). On a $350,000 home, that's $7,000–$17,500 beyond the down payment.

When you are ready to calculate, use our free Mortgage Calculator — it runs privately in your browser and shows the formula used.

Frequently asked questions