First-time home buyer tips: 8 things to know before you buy

Buying your first home is an incredible milestone, but navigating the path to homeownership can feel overwhelming. Success comes down to focusing on eight key areas, from building your credit and exploring first-time buyer programs to making a competitive offer and securing insurance.

Best of all? You don't necessarily need to put 20% of the purchase price down. Depending on your loan, you could qualify with a significantly lower down payment on your new home. From your initial budget to the day you get the keys, an experienced loan officer can walk you through every step of the process.

1. How to build credit for a mortgage

As a first-time home buyer, it can be difficult to prove creditworthiness, especially if you're young and lack a substantial credit history. The best thing you can do is pay your bills on time, whether it's rent, utilities, cell phone bills or a car payment. Paying down your credit card debt can also improve your credit score and make you a more attractive borrower to lenders.

Credit score requirements can vary by program and are subject to change. Citizens offers access to first-time homebuyer programs that may have more flexible credit score requirements than traditional thresholds, helping make homeownership more accessible.

2. How much money you need for a down payment

The standard is to have 20% of the home's price ready for a down payment. For example, if you're buying a $200,000 home, you'll need $40,000. That's a lot of cash, especially for a first-time home buyer who's not receiving money from the sale of a previous home.

However, the median down payment for first-time home buyers was just 10% in 2025, according to the National Association of Realtors. So, depending on whether you have a fixed-rate mortgage, adjustable-rate mortgage (ARM) or other type of home loan, you may not need the full 20%.

No matter how much you need to set aside, open a money market account or bank CD with a competitive interest rate and set up automatic deposits. The sooner you start saving, the better.

3. What closing costs to expect

When you apply for a mortgage, there are closing costs associated with the loan process. Some buyers choose to pay these costs upfront, while others may roll some or all of them into their total mortgage amount if their loan program allows. Common closing costs may include:

• First month's mortgage payment
• Application fee
• Fee for a credit check
• Title search and insurance
• Appraisal fee
• Lender and attorney fees
• Inspections
• Documentation preparation
• Property taxes
• Homeowner's insurance

Depending on the loan program and lender, some closing costs may be financed as part of your mortgage rather than paid entirely out of pocket at closing. In addition, many first-time homebuyer programs offer grants or other forms of assistance that can help cover eligible closing costs and down payment expenses. Ask your loan officer about programs that may be available to you.

Across the U.S., closing costs range from around 0.5% to nearly 3% of the home's sales price, with a national average of 1.06%.

4. First-time home buyer programs and assistance

The U.S. Department of Housing and Urban Development offers FHA loans that are often a good option for first-time home buyers seeking low down payments and closing costs. Many states also provide assistance to first-time home buyers. To see available programs in your area, contact your local state finance housing agency.

Affordable home loan options from Citizens may require as little as 3% down, such as the HomeReady and Destination Home Mortgage programs.

5. How to structure your house hunt

A good early step for first-time home buyers is to connect with a local real estate agent who knows the market and can help focus your search. In many cases, buyers do not pay upfront costs for an agent's services because agents are typically compensated through a commission paid as part of the home's sale transaction.

Your agent can have potential homes automatically emailed to you every day. Create some "must have" and "would like to have" criteria to help you sort through all these homes, and once you have a list you're interested in, set up house tours with your agent.

6. How to determine a reasonable initial offer

Your real estate agent will be instrumental in determining the offer amount that makes sense for your situation, as there's no single right answer. Your offer depends on the market, the seller, your willingness to negotiate, how long the home has been for sale and more.

If you're really serious about the home, you may not want to play hardball in negotiations. On the other hand, circumstances may be right for you to make a low offer and potentially save some money.

7. How long it takes to close on a home

Typically, it takes 30 or 45 days to close on a property, though this can vary depending on how long it takes for appraisals, inspections and finalizing paperwork. Some loan types, like FHA loans, can take longer to close due to stricter requirements, while cash purchases, rare for first-time home buyers, can close relatively quickly.

8. What homeowner's insurance you need

You'll need homeowner's insurance lined up early in the process as proof of insurance is required during your mortgage application. There are several kinds of coverage, including liability coverage, basic protection against damage from extreme weather or disaster and replacement coverage, which would reimburse you for the cost of rebuilding your home and replacing belongings in the event they're all lost.

Cheaper forms of insurance will reimburse you for the value of the items at the time of loss. The amount of coverage you choose is up to you, but be sure you understand the minimum coverage your state requires.

Ready to take the next step?

Buying your first home is a life-changing experience, and the right preparation makes all the difference. Fortunately, you don't have to navigate the financial roadmap alone. Whether you're mapping out a savings plan or exploring flexible mortgage options that fit your budget, Citizens is ready to help you take that next big step. Reach out to a Citizens Loan Officer today to turn your homeownership goals into a reality.

Explore Mortgage Rates

Frequently asked questions

How much do I need to save for a down payment on my first home?

The standard guideline is 20% of the home's purchase price, but many first-time buyers put down significantly less. Depending on your loan type, you may qualify with as little as 3% to 3.5% down. If you put down less than 20%, you'll likely need to pay private mortgage insurance (PMI).

What credit score do I need to buy a house?

Credit score requirements vary by lender and loan program. While some conventional loans may require a credit score of 620 or higher, borrowers with higher scores often have more loan options available and may qualify for better interest rates. Certain government-backed loan programs may allow lower credit scores for eligible borrowers.

The best way to understand your options is to speak with a loan officer, who can review your credit profile and help identify loan programs that may fit your situation. To prepare, pay your bills on time, reduce credit card balances and check your credit report for errors before applying for a mortgage.

How long does it take to buy a house from start to finish?

After your offer is accepted, closing typically takes 30 to 45 days. However, the full home buying process, including saving for a down payment, getting prequalified for a mortgage, finding a home and making an offer, can take several months to a year or more depending on your financial readiness and local market conditions.