Dreaming about owning your first home? You’re not alone. Buying a house is one of life’s biggest milestones—but for first-time home buyers, the process can seem overwhelming.
From credit scores to down payments to choosing the right loan, there’s a lot to consider.At GO Mortgage, we’re here to guide you every step of the way. This 7-step guide will walk you through how to become a homeowner in 2025, with expert tips, helpful tools, and links to resources to get you started.
Begin your journey to homeownership with GO Mortgage.Why does homeownership matter?
Homeownership contributes to lasting financial stability by building equity and offering potential tax benefits.
- Equity growth: As you pay down your mortgage, you gain ownership and build wealth.
- Stable payments: A fixed-rate mortgage keeps your monthly principal and interest payments consistent over time.
- Credit improvement: Paying your bills promptly helps strengthen your credit history and improve your score.
- Customization freedom: Want to paint a wall bright red? Go for it—it’s your space.
- Community roots: Homeownership encourages long-term connections and neighborhood pride.
Related reading: Explore the benefits of buying a home.
1. How should you prepare financially?
Plan for your future needs.
If you see yourself staying in one place for at least 3–5 years, buying may be smarter than renting.
However, consider your financial stability, job security, and desire for long-term responsibility before diving in.
Calculate how much home you can afford.
Use our Mortgage Payment Calculator to estimate a realistic monthly budget. Or, connect with a GO Mortgage loan originator for personalized support.
2. What financial documents do you need to organize?
Before you apply for a loan, get your finances in shape:
- Check your credit score. A higher score usually means better loan options. You can get your credit report free annually at AnnualCreditReport.com.
- Gather proof of income. Most lenders want pay stubs and W-2s from the past two years.
- Assess your debt. Keep your debt-to-income ratio (DTI) under 43% to qualify for most mortgages.
- Decide on a down payment. While 20% is ideal to avoid private mortgage insurance (PMI), many loan types allow for much lower down payments. Explore assistance options if you’re short on savings.
Some loan programs, such as VA and USDA loans, require little to no down payment. Ask your loan officer about these programs if you qualify.
3. How can you start saving for your home?
- Create a savings plan: The biggest upfront cost is usually the down payment. Set monthly savings goals and consider ways to reduce discretionary spending.
- Budget for closing costs: These typically range from 3% to 6% of the loan amount and cover appraisal fees, title insurance, and other related expenses. Sellers can sometimes contribute—talk to your real estate agent about negotiating this.
- Family gift funds: Be sure to document them correctly with a gift letter if they’ll be used for your down payment.
4. What type of mortgage is right for you?
There’s no one-size-fits-all mortgage. Here are some popular options:
- Conventional loan: Best for borrowers with strong credit and stable income.
- FHA loan: Ideal for first-time buyers with limited savings—requires as little as 3.5% down.
- VA loan: Qualified veterans and active-duty personnel can purchase a home without needing a down payment.
- USDA loan: Great for buying in rural areas, often with no down payment.
- Jumbo loan: Needed if your loan exceeds the conforming limit—typically requires 20% down.
- Non-QM loan: Flexible for self-employed borrowers or those with non-traditional income.
Compare loan types and get preapproved to strengthen your offer.
5. What’s the difference between pre-qualification and pre-approval?
When starting the mortgage process, many first-time buyers confuse these two important steps, but understanding the difference could mean the edge in a competitive market.
- Pre-qualification is a quick estimate based on information you provide about your income, credit, and debts. It helps you understand your general price range, but it’s not a guarantee of the actual price.
- Pre-approval is a more in-depth process where a lender verifies your credit, income, and assets. A pre-approval letter outlines your approved loan amount and shows sellers you’re a serious buyer.
Why does it matter?
- Stronger offers: In a seller’s market, being pre-approved shows you’re a serious buyer.
- Faster closing: Much of the loan underwriting is already complete.
- Better budgeting: You’ll know your exact loan amount, interest rate range, and estimated monthly payment.
💡 Tip: Start with pre-qualification to explore your options, but aim for full pre-approval before house hunting seriously. Start the pre-approval process now.
6. How do you find the right home and agent?
Hire a real estate agent. A great agent will help you narrow your search, negotiate offers, and coordinate inspections. Ask for referrals and interview a few to find the right fit.
Start your search. Consider:
- School districts
- Commute times
- Walkability and safety
- Future resale value
Attend open houses and don’t rush—your perfect home is worth the wait.
7. What happens when you’re ready to make an offer?
Making the offer:
- Submit a written offer through your agent.
- Include earnest money to show you’re serious (typically 1–3% of the price).
- Be prepared for negotiations or counteroffers.
Appraisal and inspection:
- The lender orders a home appraisal to ensure the price matches the home’s value.
- A home inspection checks for major repairs—roof, plumbing, electrical, and more.
- Renegotiate or request repairs if issues are uncovered.
Understand what affects a home appraisal.
7. How do you close on your new home?
Final walk-through: Double-check that all agreed-upon repairs were made, and the home is in expected condition.
Review your closing disclosure: This includes final loan terms and fees. Compare it to your original loan estimate and ask questions if anything seems off.
Closing day checklist:
- Bring a government-issued ID
- Provide proof of funds for closing costs
- Sign loan documents and receive your keys
Congratulations—you’re officially a homeowner!
Ready to get started?
Becoming a homeowner is one of the most rewarding milestones you’ll achieve. If you’re ready to take the first step, check your mortgage options with GO Mortgage today.
Still have questions or need help navigating your next move? Get in touch with a GO Mortgage advisor and we’ll guide you from dream to doorstep.