Start here: First-Time Home Buyer Guide
1) Know your savings target
Start by estimating how much cash you’ll need for both the down payment and closing costs.
- Down payment: Usually 3–20% depending on your loan type and credit.
- Closing costs: Typically 2–4% of the purchase price.
- Move-in cushion: Budget for immediate setup costs like utilities, cleaning, or furniture.
Tip:
Ask your lender for a detailed estimate early - it helps you set a realistic goal before you start touring homes.
2) Create a savings timeline
Break your total goal into smaller, consistent contributions over time. Even $200 a month adds up quickly.
- Set up automatic transfers to a high-yield savings account.
- Track progress monthly to stay motivated.
- Redirect windfalls - tax refunds, bonuses, or side income - straight into savings.
3) Look into down payment assistance programs
Many cities, states, and lenders offer grants or loans to help first-time buyers with upfront costs.
Common assistance options
- Government-backed loans (FHA, VA, USDA)
- Local down payment grants
- Employer homebuying benefits
- Matched savings programs
Eligibility varies by:
- Income & household size
- Property location
- Loan amount & purchase price
4) Save smarter with small adjustments
You don’t need major lifestyle changes to grow your savings - small tweaks can make a big difference.
- Cut one recurring expense and redirect the savings (like unused subscriptions).
- Use cashback or reward apps to add a few extra dollars each month.
- Sell or donate unused items and deposit the proceeds.
Ready to make your first home a reality? Compare agents who offer first-time buyer incentives - for free.
*Informational only; not legal, tax, or financial advice. Programs vary by market and lender.
Frequently Asked Questions
How much should first-time buyers save for down payment and closing costs?
The amount depends on loan type, home price, assistance programs, and lender requirements. Buyers should budget for both the down payment and closing costs, plus reserves for repairs and moving expenses.
Should first-time buyers review assistance programs early?
Yes. Down payment assistance, grants, forgivable loans, and state or local programs can affect budget, timing, and loan choices. Buyers can start with the first-time home buyer programs guide and then review available state programs.
When should a first-time buyer compare real estate agents?
Buyers should compare agents before touring heavily or making offers. Comparing agents early can clarify communication style, buyer incentives, local experience, and how the agent will help with offers, inspections, and negotiations.
What is the difference between down payment and closing costs?
The down payment is the buyer's upfront contribution toward the purchase price. Closing costs are transaction expenses such as lender fees, title charges, escrow fees, insurance, taxes, and prepaid items.
Can down payment assistance cover closing costs?
Some assistance programs may help with down payment, closing costs, or both. Eligibility, limits, and repayment terms vary by program, lender, and location.
How can buyers save faster for a first home?
Buyers can set a monthly savings goal, reduce high-interest debt, automate savings, review spending, compare assistance programs, and choose a realistic price range before shopping.