First-Time Homebuyer Guide: How to Buy Your First Home Without Breaking the Bank

by Lisa Castillo

Buying your first home is exciting—but it can also feel overwhelming. From saving for a down payment to navigating mortgage options, the process seems full of hurdles. The good news? With the right knowledge and resources, first-time homeownership is achievable for nearly anyone.

This guide is designed specifically for non-military first-time buyers (I have a separate blog for military first time homebuyers), focusing on practical steps, financial resources, and strategies to make homeownership more affordable.

Step 1: Understand Your Financial Picture

Before you start house hunting, it’s important to know where you stand financially:

Credit Score: Lenders will check your credit, so know your score and review your report for errors.
Debt-to-Income Ratio (DTI): This measures your monthly debts compared to your income. Most lenders prefer a DTI below 43%.
Savings: Beyond your down payment, you’ll need funds for closing costs, moving, and initial home maintenance.

Understanding these factors helps you know what you can afford and shows lenders you’re a responsible borrower.

Step 2: Explore Down Payment Assistance Programs

Many first-time buyers hesitate because they think they need 20% down. Thankfully, that’s no longer the case.

Common Down Payment Assistance Options:

State and Local Programs: In San Antonio, for example, programs like the City of San Antonio’s HOMEbuyer Assistance Program offer grants or low-interest loans to help with down payments.
Lender-Specific Programs: Some lenders offer their own assistance programs for first-time buyers.

These programs can help you buy sooner rather than waiting years to save for a large down payment.

Step 3: Consider Gift Funds

If you have family or friends willing to help, gift funds can also cover part or all of your down payment.

Typically, lenders allow gifts from family, employers, or even close friends.
The donor usually provides a letter stating the funds are a gift and do not need to be repaid.
Gift funds can also help cover closing costs.

This option is especially helpful for buyers who are ready to purchase but need extra cash for the down payment.

Step 4: Choose the Right Loan Program

There are several mortgage programs ideal for first-time buyers:

FHA Loans: Low down payments, flexible credit requirements.
Conventional Loans: May require a slightly higher credit score but can be paired with down payment assistance programs.
State/Local Programs: Often include below-market interest rates and reduced mortgage insurance for first-time buyers.

Working with a trusted lender will help you find the program that fits your situation.

Step 5: Budget for Closing Costs and Other Expenses

Many buyers forget that closing costs can add 2–5% of the home price to your upfront costs. Typical items include:

Loan origination fees
Appraisal fees
Title insurance
Property taxes and insurance prepaid for the first year

Some assistance programs and gift funds can also be applied toward closing costs.

Step 6: Start House Hunting With Confidence

Once your finances are in order and you’ve explored assistance programs, it’s time to start looking at homes:

Create a list of priorities (location, size, school district, amenities)
Attend open houses and virtual tours
Work with a real estate agent who understands first-time buyer programs
Get pre-approved for a mortgage so you know exactly what you can afford

This approach ensures you’re shopping realistically and strategically.

Step 7: Remember You’re Not Alone

Buying your first home is a big step, but there are plenty of resources available:

Down payment assistance programs
Gift funds from family or friends
Knowledgeable real estate agents and lenders who guide first-time buyers

With the right plan, support, and resources, homeownership is not just a dream—it can be your reality.

Ready to Take the First Step?

If you’re ready to explore your options, including down payment assistance programs or gift funds, I can help you create a plan tailored to your finances and goals.

📞 Reach out today and let’s make your first home a reality.