A First-Time Home Buyer's Guide to Rates

The first mortgage is the most intimidating one — a wall of jargon and big numbers with your home on the other side. This is the short version of what actually matters, with a link out to the detail on each piece. You need less than you think to start, and the fundamentals are learnable in an afternoon.

You need less down than you've heard

The "20% down" rule is a myth. Conventional loans start at 3% down, FHA at 3.5%, and VA/USDA at 0% for those who qualify. Twenty percent only matters because it lets you skip PMI. Family gift funds can help too. Start with the down payment guide and loan types compared to see which fits you.

Two numbers decide your budget

Lenders price you on your credit score and your debt-to-income ratio. The score moves your rate; the DTI caps how much you can borrow. Improving either before you apply — paying down a card, retiring a small loan — often does more than anything else you can do. Our affordability calculator turns those inputs into a real price range.

Get pre-approved, then shop

Before you tour homes, get pre-approved — it gives you a real, vetted number and makes your offer credible to a seller. A pre-qualification estimate isn't the same thing, and the difference can lose you the house in a competitive market.

Look for help — it exists

Many states, counties, and cities run down-payment-assistance and first-time-buyer programs (grants or low-interest second loans), often paired with FHA or conventional financing. Definitions vary, but "first time" frequently just means you haven't owned a home in the last three years — so more people qualify than assume they do. Ask any lender what's available in your area.

When you're ready to put numbers to it, our calculator and neutral rate board let you see where the market really is — no email, no lead form, no spin.

By L.W. Martin, Founder — 20 years in the mortgage business, including 15 running his own brokerage. About → · Updated August 2026.