The First-Time Buyer's Playbook

How to know what you can actually afford

The number a lender approves you for is a ceiling, not a target. Lenders can approve total debts up to 45% or even 50% of your gross income on some programs. That doesn't mean you should spend it.

The number I use with clients: keep your total housing payment, including principal, interest, taxes, insurance and HOA, around 25% to 28% of your gross monthly income.

Don't forget the costs that don't show up in the payment: maintenance (plan on about 1% of the home's value per year), utilities that are often higher than in an apartment, and furnishing a bigger space.

Read the full affordability framework →

The 7 documents you need before applying

Gather these before our first real application and you'll cut the process in half.

• Two years of W-2s, or two years of tax returns if you're self-employed
• Pay stubs covering the last 30 days
• Two months of bank statements for every account, all pages, even the blank ones
• Two months of retirement or investment statements, if you have them
• Photo ID: driver's license or passport
• Your Social Security number, for the credit check
• Property information, if you already have a home in mind

Depending on your situation, you might also need divorce decrees, proof of other income, gift letters or rental history. I'll tell you exactly what applies to you.

See the full document guide →

Down payment strategy: 20% is a myth

You don't need 20% down to buy a home. Most first-time buyers put down much less.

Putting 20% down avoids mortgage insurance. But waiting years to save it can cost more than the insurance, especially if home prices rise while you save.

How to think about it

1. Keep reserves. Don't empty your savings for a bigger down payment. Keep at least a few months of expenses after closing.
2. Compare 5% vs. 10% vs. 20%. I'll show you the payment and the mortgage insurance at each level.
3. Ask about assistance. Many states and counties offer down payment assistance programs for first-time buyers.
4. Gifts are allowed. Family members can usually gift part or all of your down payment with a signed gift letter.

Compare conventional and FHA on real numbers →

Improving your credit in 90 days

A higher score can mean a lower rate and cheaper mortgage insurance. You can't rebuild credit overnight, but you can often move it meaningfully in a few months.

1. Pay everything on time. Payment history is the biggest factor. Set up autopay on every account.
2. Pay credit cards down below 30% of the limit, ideally below 10%. This is usually the fastest way to raise a score.
3. Pay before the statement date, not just the due date. The balance that gets reported is the one on your statement.
4. Don't close old cards. They help your credit history and your available credit.
5. Don't open new accounts in the months before you apply.
6. Check your reports at annualcreditreport.com and dispute real errors.

Before you pay off a collection or a charged-off account, call me. Sometimes paying it helps. Sometimes it doesn't change your score at all, and your cash is better used elsewhere.

Closing costs, explained

Closing costs are the fees to create your loan and transfer the home. Plan on roughly 2% to 5% of the purchase price, on top of your down payment. They show up in a few groups on your Loan Estimate:

• Lender fees (Section A): origination, underwriting and any points. These are the easiest to compare between lenders.
• Services you can't shop (Section B): appraisal, credit report, flood certification.
• Services you can shop (Section C): title and settlement. You can often choose your own provider.
• Taxes and government fees (Section E): recording fees and transfer taxes, which vary a lot by state.
• Prepaids and escrow (Sections F and G): your first year of homeowners insurance, some property taxes and prepaid interest.

Ways to lower what you bring to closing

• Seller credits negotiated into your offer
• Lender credits in exchange for a slightly higher rate
• Down payment and closing cost assistance programs
• Timing your closing date to reduce prepaid interest

Already have a Loan Estimate from a lender? Send it to me for a free second opinion, and I'll tell you honestly whether the fees are fair.

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Your next step

If you've read this far, you know more than most first-time buyers do when they make an offer. The next step is to find out your real numbers.

1. Take the 60-second loan match quiz to see which program fits.
2. Look over the roadmap so you know what's coming.
3. Book a 15-minute call and I'll build your plan.

Figures in this playbook are illustrative examples, not rate quotes. Program availability and requirements vary. This is not a commitment to lend. All loans subject to credit approval and underwriting guidelines. Rates and terms are subject to change without notice.