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First-Time Homebuyer’s Guide to Real Estate: Financing Basics

Buying your first home is an exciting milestone, but understanding the financial side of it can feel overwhelming. From mortgage options to down payments and closing costs, knowing the basics helps you make confident, informed decisions throughout the process.


Here’s a quick guide to the key financing essentials every first-time homebuyer should know.


1. Know Your Budget

Before you start touring homes, it’s important to understand how much you can comfortably afford. Take a close look at your income, existing debts, and monthly expenses. A good rule of thumb is that your total housing payment (including mortgage, taxes, and insurance) shouldn’t exceed 30–35% of your gross monthly income.


2. Get Pre-Approved for a Mortgage

A mortgage pre-approval gives you a clear picture of what you can afford and shows sellers that you’re a serious buyer. Your lender will review your credit score, income, and debt-to-income ratio to determine your eligibility. Having a pre-approval in hand also makes your offers stronger in a competitive market.


3. Understand Your Loan Options

Not all mortgages are the same, and choosing the right one depends on your financial situation and goals.

  • Conventional Loans: Great for buyers with solid credit and a larger down payment.

  • FHA Loans: Ideal for first-time buyers with lower credit scores or smaller down payments.

  • VA Loans: Available to eligible veterans and service members — often with no down payment required.

  • USDA Loans: Designed for buyers purchasing in eligible rural areas with low to moderate income.

Your lender can help you compare options and choose the best fit for your budget.


4. Plan for the Down Payment and Closing Costs

While some programs allow for low or even zero down payments, most buyers put down between 3–20%. You’ll also need to budget for closing costs, which typically range from 2–5% of the home’s purchase price and cover expenses like appraisals, inspections, and title insurance.


5. Don’t Forget About Additional Expenses

Beyond your loan and down payment, remember to plan for ongoing costs such as homeowners insurance, property taxes, utilities, and maintenance. Understanding the full picture helps prevent surprises and ensures long-term financial comfort.


Final Thoughts

Buying your first home may feel like a big leap, but with the right preparation and guidance, it’s completely achievable. Understanding your financing options early helps you move confidently toward homeownership — and I’m here to help you every step of the way.


If you’re ready to start your homebuying journey or want to discuss financing options, reach out today. Together, we can make your first home a reality. 🏡

Your NorCal Realtor

M&M Real Estate

BRE Lic# 01938720

Cell: Call/Text 707-330-2324


About Scott Sweeney


SweeneySells

Full Time Realtor 13 Years +

Over 100 Families Served

Top 5% Producing Agent

Buying & Listing Specialist

Contract & Negotiation Ninja

CSUS Business & Marketing Graduate 2006


With quickly serving over a 100 families, Scott Sweeney has become a top 5% producing Realtor in the greater Sacramento area who has helped clients from the Bay Area to South Lake Tahoe. Scott has a Bachelor Of Science in Business Administration, with a concentration in Marketing from CSUS. His education, and extensive background in the hospitality, marketing, and real estate industries, have helped Scott to become one of the leading, and most sought after agents in the area.


Reach out to SweeneySells today, and take the first step towards your real estate goals!

📞707-330-2324




Top Producer 2016-2023


"I appreciate your business & referrals!"


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