First Time Home Buyer Guide
Everything you need to know to buy your first home—without the guesswork.
Learn how to qualify for a mortgage loan
Get expert help from Tampa-based mortgage brokers
Understand your home buying options from start to finish
Are You Ready to Buy a Home?
How is Your Financial Health?
The first step in home buying is understanding your financial standing.
Start by checking your credit score. Mortgage lenders use this score to decide if you qualify for a loan and what interest rate you’ll get. A higher score usually means better terms and lower monthly payments.
- Excellent (750+) – Best rates available
- Good (700–749) – Competitive offers
- Fair (650–699) – May qualify, but rates may be higher
- Poor (below 649) – May need credit improvement first
Review your debts. Your debt-to-income ratio (DTI) is key in the loan approval process. Keep your total monthly debt payments—like student loans, credit cards, and car loans—under 36% of your gross income.
Evaluate your savings. You’ll need more than a down payment—there are closing costs, moving expenses, and things like home inspections, appraisals, and escrow deposits to plan for. Having a cushion can help protect your budget.
Need a boost on your credit score? Don't worry—we're here to help.
What is the 30/30/3 Rule for Home Buying?
The 30/30/3 Rule is a smart budgeting formula found in many first time homebuyer guides and personal finance articles. It helps you avoid taking on too much debt and keeps your homebuying goals realistic. Whether you're working with a credit union or a bank, following this rule helps protect your long-term finances while building equity through a smart mortgage loan.
Spend No More Than 30% of Your Gross Monthly Income on Your Mortgage
Add up your full monthly housing payment—loan principal, interest, property taxes, home insurance, and any required mortgage insurance (like PMI or MIP).
Staying below 30% of your gross income helps you afford other bills, build savings, and avoid default risk.
Example: With $6,000 in monthly income, your total housing cost should be under $1,800.
Save at Least 30% of the Home Price Before You Buy
Aim to save enough to cover:
- Closing costs (typically 2–5% of the purchase price)
- Moving expenses
- Initial repairs or furniture
- A 3–6 month emergency fund for repairs or gaps in income
Even if you qualify for a low down payment loan, having this safety net protects your equity and reduces reliance on credit cards or personal loans.
Buy a Home That Costs No More Than 3x Your Annual Income
Watch this to learn about First-Time Home Buyer Mistakes that you need to avoid.
What Qualifies You as a First-Time Homebuyer?
Many home buyer programs, including those backed by the United States Department of Agriculture (USDA) and the Federal Housing Administration (FHA), use a broader definition of “first-time buyer.”
You may be eligible if:
You haven’t owned a primary residence in the last 3 years
You only owned a home with a former spouse (e.g., during marriage)
You previously owned a mobile home or a property that wasn’t up to code
Why It Matters
Qualifying under these guidelines can give you access to:
Down payment assistance
First home buyer advice and education resources
New home buyer programs with reduced interest rates and easier qualification
Government-backed options like FHA and USDA loans
First-Time Home Buyer Benefits
Easier Loan Approval with Flexible Credit
Many 1st time home buyer programs allow lower credit scores and limited credit history. If you’re rebuilding after credit card debt, student loans, or have a short credit history, you may still qualify.
Down Payment Help and Closing Cost Support
Grants, forgivable loans, and matched savings plans can help reduce your upfront costs. These home buyers programs often serve veterans, teachers, and first responders—and some also help with mortgage insurance, home inspection fees, and even utility setup.
Tax Breaks That Lower Your Costs
You may qualify for a tax credit, mortgage interest deduction, and property tax deductions. Some buyers can also apply for a Mortgage Credit Certificate (MCC) to reduce their annual tax bill directly.
Lower Interest Rates and Reduced Fees
Programs backed by the Federal Housing Administration (FHA), VA, or United States Department of Agriculture often offer lower interest rates and minimal fees—ideal for first home buyers with limited savings or income.
Build Home Equity and Long-Term Wealth
Instead of putting money toward rent, every mortgage payment builds your home equity. Over time, as market value increases, your home becomes an investment in your financial future.
Special Loan Programs and Down Payment Assistance for First-Time Buyers
FHA Loans (Federal Housing Administration)
FHA loans are insured by the federal government and allow buyers to put down as little as 3.5%. These mortgage loans are ideal for borrowers with limited credit history, moderate income, or higher debt-to-income ratios. They require both upfront and monthly mortgage insurance, and often work well with down payment assistance or home equity loan options in the future.
VA Loans (U.S. Department of Veterans Affairs)
VA loans offer 0% down payment, no PMI, and competitive interest rates. These mortgages are available to qualified veterans, active-duty service members, and eligible surviving spouses. Many consider VA loans one of the most affordable home buyers loan options on the market.
USDA Loans (United States Department of Agriculture)
If you’re looking outside of city centers, USDA loans provide 100% financing with reduced mortgage insurance and no required down payment. They’re perfect for home buyers with moderate incomes who meet area and income eligibility rules.
Conventional Loans for First-Time Buyers
Conforming loan programs such as Fannie Mae HomeReady® and Freddie Mac Home Possible® allow qualified first home buyers to purchase with just 3% down. These loans may offer reduced private mortgage insurance (PMI) and are a great fit for buyers with good credit, steady paychecks, and manageable monthly payments.
Local Down Payment Programs in Tampa
Credit unions, city housing departments, and nonprofit agencies offer programs that help cover closing costs or match your down payment savings. Some also offer refinancing support, title insurance discounts, or home buyer education classes.
How Much Should First-Time Buyers Put Down on a Home?
| Loan Type | Minimum Down Payment | Credit Score Needed |
|---|---|---|
| FHA Loan | 3.5% | 580+ |
| VA Loan | 0% | 620+ (guideline, varies) |
| Conventional | 5–20% | 620+ |
Conforming loan programs like HomeReady® and Home Possible® are designed to help first home buyers purchase with just 3% down—ideal for those with a reliable paycheck, solid credit history, and a manageable debt-to-income ratio.
💡 Don’t forget: Your down payment is just one part of the total upfront expense. Be sure to also budget for:
- Title insurance and closing costs
- Homeowners insurance and property taxes
- Escrow setup and prepaid interest
- Potential mortgage insurance (PMI or MIP) if your down payment is under 20%
Whether you’re saving with a gift, pulling from a savings account, or using a down payment assistance program, our team will help you run the numbers and explore every option—including refinancing or second mortgage strategies down the road.
7 Steps to Buying Your First Home
1. Know Your Finances
Check your credit score, credit report, and monthly paycheck details. Take note of any student loans, credit card balances, or line of credit accounts. Your gross income and debt-to-income ratio help determine your eligibility for a mortgage loan.
Check
2. Get Pre-Approved
A loan officer will assess your income, assets, and credit history to recommend options like an FHA loan, VA loan, or conventional mortgage. Pre-approval sets your budget, locks in your interest rate, and shows real estate agents and sellers you’re serious.
Pre-Approval
3. Work with a Real Estate Agent
A licensed real estate agent (also known as an estate agent) will help you find properties, set up home inspections, and negotiate the contract. We can connect you with trusted local agents in the Tampa real estate market.
real estate market
4. Go House Hunting
Compare property price, condition, and market value. Look at school zones, commute times, and potential renovation needs. Your agent can also help evaluate recent sales and ensure your offer is competitive.
real estate market
5. Book a Home Inspection and Appraisal
An independent inspector checks the home for safety and repairs—from the foundation to the roof. The appraisal, ordered by the bank or lender, confirms that the home loan amount is in line with the home’s fair value.
Appraisal
6. Finalize the Loan and Close
We’ll help you complete underwriting, review final paperwork, and secure your mortgage approval. You’ll sign the title insurance documents, cover any remaining fees, and receive your keys!
Close
7. Budget for Ongoing Costs
Plan for recurring costs like your mortgage payment, property tax, home insurance, utility bills, and regular maintenance. It’s also wise to keep a savings account for future upgrades or emergencies like flood insurance or appliance repairs.
Costs
Tools and Resources for Tampa Homebuyers
USDA Mortgage Calculator
How to Improve Credit Score
FHA vs. USDA Loan Comparison
Understand which loan type suits your needs best based on down payment, location, and income.
Frequently Asked Questions
This budgeting rule suggests:
- Spend no more than 30% of your gross income on your monthly mortgage payment
- Have 30% of the home price saved before buying
- Stick to homes that cost no more than 3x your annual income
It’s a helpful guideline to avoid overextending yourself financially.
- FHA loans: 3.5%
- VA loans: 0%
- Conventional loans: 5–20%
Your exact amount depends on your credit profile, loan type, and savings. You may also need to budget for PMI, closing costs, and escrow.
Most buyers are approved based on income, credit, and debt-to-income ratio. First-time homebuyers in Tampa typically qualify for homes between $200K–$350K, but your number may vary. Use a mortgage calculator or get pre-approved to find your range.
