Guide To Buying Your First Home
The PathHome App is a personal financial assistant app to budget, save, and prepare to buy your first home.
To help you get better prepared to purchase your first home, we've created this guide to take you step-by-step through the home buying process.

by Edgar Ibarra

Budget & Save or Take Advantage of First Time Buyer Programs
Use The PathHome App, Home Affordability Calculator to help determine your home's budget. The calculator uses the Income and Monthly Debts you provided to determine the total home loan amount you can afford based on the maximum housing payment you can afford to repay.
Unlock Your Dream Home: How to Take Advantage of First-Time Buyer Programs
Buying your first home is an exciting milestone, but it can also feel overwhelming. Luckily, many programs are designed specifically to help first-time buyers like you get a leg up in the housing market. These programs often offer benefits such as down payment assistance, reduced interest rates, or special grants — making homeownership more accessible and affordable.
Lower Down Payments
Many programs help reduce the initial amount you need to save.
Better Loan Options
Access to favorable interest rates and terms.
Financial Assistance
Grants and assistance programs can help cover closing costs and other expenses.
Building Equity
Starting your journey as a homeowner with less financial stress.
With years of experience, I've helped thousands of families find their perfect homes and navigate first-time buyer programs. I understand the ins and outs of these opportunities and can guide you step-by-step through the process. My goal is to make homeownership not just a dream, but a reality for you.
If you're ready to take the first step toward your new home, reach out today. Let's explore the programs available to you and turn your homeownership goals into a lifetime of memories!
Review Your Credit Report
Federal law enables you to obtain a free copy of your credit report every 12 months from each of the three credit reporting bureaus: Experian, Equifax, and TransUnion.
The PathHome App users can enroll in Credit by answering a few simple security questions, then view their credit score and credit report any time they log in to their locker. Users will receive notifications when their credit score increases or decreases, or when an alert is made to their credit report.
Payment history
Your account payment information, including any delinquencies and public records.
Amounts owed
How much you owe on your accounts. The amount of credit you are using on revolving accounts.
Length of credit history
How long ago you opened accounts and time since account activity.
Credit mix
The mix of active accounts and loans, such as credit cards, auto loan, student loans, etc.
New credit
Recent requests for new credit, including credit inquiries and the number of recently opened accounts.
These factors are used to calculate your credit score.
Build Your Home Buying Team
Home buying has lots of different people involved. Here are some of the home buying professionals you'll meet along the way to closing on your home:
Mortgage Originator
PRMG recommends that you meet with a reputable mortgage originator, like myself Edgar Ibarra, before you start viewing homes. After reviewing your finances, income, and credit score, as a Mortgage Originator I can validate how much home you can afford. We will discuss the loan terms and options that meet your financial goals. I will advise which documents you'll need to provide to process your mortgage application and answer any questions you may have along the way. We will be your point of contact as your home loan progresses through our company's loan process. We will recommend the best loan options for you. We will provide you with a Mortgage Coach Analysis with the best possible loan options. This tool lets you compare those different loan options side by side to determine the best loan for you and your family!!
Real Estate Agent
While you can begin your search for a home online or through your PathHome app, real estate agents can access all MLS (multiple listing service) listings. They can provide access to homes for-sale-by-owner, information on your desired neighborhoods, and recommend comparable neighborhoods that may meet your needs.
A real estate agent's knowledge of the home buying process, negotiating skills, and industry connections to help obtain the rest of your team will be valuable. Best of all, their service won't cost you anything. They are compensated from the commission paid by the seller of the house you eventually purchase.
Title Officer
Title officers handle your future home's title or deed to ensure no discrepancies such as overdue taxes, zoning restrictions, or existing liens. If issues are discovered, the title officer will contact the seller and work to resolve them. Most mortgage lenders provide this service, so it's unlikely you'll need to provide a title officer.
Escrow Officer
Escrow officers are responsible for holding funds passing between a homebuyer, seller, or lender (this is called "earnest money") in an escrow account. They must act as neutral third parties, as they're responsible that all aspects of a home sale go smoothly for everyone involved.
Home Inspector
Home inspectors work for the homebuyer, looking for damages or issues that need to be repaired immediately or in the future. These could be anything from a termite infestation to structural damage or estimating the age of the roof. If any potential problems are identified, the home inspector's report may help you or your real estate agent negotiate the cost of repairs with the seller.
Appraiser
The appraiser is responsible for estimating the value of your new home to ensure a fair market price. An appraisal is done early in the loan process, as this helps you decide if your seller's asking price is reasonable. An appraiser's tasks include researching recent sale prices of similar homes in the area and comparing these prices to what your seller is asking.
Insurance Agent
The insurance agent will help you choose a homeowner's insurance policy. It protects your home and its contents in case of fire, theft, or other damage. Homeowner's insurance coverage and deductibles differ, so ask your insurance agent to help you choose the coverage that best fits your needs.
Get Pre-Approved for a Mortgage
Pre-approving for a mortgage puts you ahead of other buyers in the home-buying process. It may be essential to pre-approve in a competitive neighborhood to demonstrate to a real estate agent that you can afford the home you want to view.
To determine how much home you can afford, use the PathHome App Home Affordability Calculator to calculate a realistic loan amount based on your income for Conventional, FHA, and VA home loan programs. If you know the approximate cost of homes in your preferred neighborhood, you can adjust the loan amount on the affordability slider to calculate your monthly payment, down payment, and estimated closing costs.
During the pre-approval process, we will informally qualify you for a home loan by asking you to collect basic information about your total household income, total debts, total savings, assets, and run a soft check credit report.
Mortgage lenders offer a wide range of competitively priced loan options. As a first-time homebuyer, you will have many questions about the loan process. It is important to work with a reputable mortgage originator, like myself, to identify which loan options meet your personal and financial circumstances and guide you through the entire loan process.
The standard components of a mortgage loan:
Loan amount
The total loan amount is calculated by the cost of the home purchase minus your down payment and any fees that have been rolled into the loan amount.
Term
Length of time you want to pay back the loan. Common terms for fixed-rate mortgage loans are 15 years, 20 years, and 30 years.
Interest rate
The fee that the mortgage lender will charge you for borrowing the money. Interest rates can be fixed or adjustable.
APR
The cost of a mortgage stated as a yearly rate, which includes the interest rate, mortgage insurance (if necessary), and loan origination fee (points).
Closing costs
The total amount of the costs required to finalize your mortgage, including property, loan, and insurance costs. Average closing costs run between about 3% and 5% of the loan amount, so on a $200,000 home, the estimated closing costs would be $8,000.
Common Mortgage Loan Programs
There are hundreds of mortgage loan programs. Each program has its own eligibility requirements that your mortgage originator will discuss with you. However, the most common mortgage loan programs are:
Conventional, Conforming Fixed Rate Loan
A good option if you have good credit and a down payment saved. The interest rate is locked in for the full term of your home loan. Most mortgage lenders will accept a down payment as low as 3% with a good credit score. If your down payment is less than 20%, you'll pay a monthly mortgage insurance (MI) fee in addition to the monthly mortgage payment until you attain 80% equity. In 2025, conforming loan limits can range anywhere from $806,500 for much of the U.S. to $1,209,750 for high-cost counties.
Jumbo Home Loan
To buy a high-priced home with a balance above the conforming loan limit in your county, you will need a jumbo loan. Often these loans require a larger down payment and are charged higher interest rates.
FHA Home Loan
A popular option for first-time homebuyers who want a low down payment and have a lower credit score (minimum credit score is usually 580). The minimum down payment is 3.5% and you'll be paying a monthly mortgage insurance fee (1.75% of the base loan amount) in addition to your monthly mortgage payment for the full term of your loan. The floor loan limit for FHA home loans in 2025 is $806,500. In high-cost counties, the current FHA loan limit ceiling is $1,209,750.
VA Home Loan
Exclusively for veterans, active duty, National Guard, reserves, and surviving military spouses. Eligible veterans can obtain 100% financing with no down payment and no mortgage insurance. VA loans require a Guarantee Fee* (Funding Fee, unless you were discharged with a VA disability and you are exempt of the funding fee), which may be financed, so it is possible to have minimal out-of-pocket closing expenses.
USDA Home Loan
Low-to-moderate income families can finance a home with a 30-year term in specific rural areas outside the city limits, as defined by the USDA. The USDA has an income limit based on household size to qualify, but 100% financing is possible. USDA loans include an upfront guarantee fee of 1%, which can be rolled into the loan's total cost, plus an annual fee of 0.35% of the outstanding loan balance, paid monthly with the mortgage payment.
Adjust-Rate Mortgage
If you plan to sell or refinance your home in 5-7 years, or you want lower monthly payments for the first years of your mortgage, this loan program can be a good option. ARMs generally have a lower interest rate, which means you'll have lower monthly payments for a predetermined period of years before the mortgage adjusts to a different interest rate. For example, in a 5/1 Hybrid ARM, the interest rate is fixed for the first 5 years, then the interest rate adjusts annually (the 1 in 5/1) until the loan is paid off or refinanced.
Once you have pre-approved for a home loan, you will receive a pre-approval letter that summarizes your loan term, estimated interest rate, and estimated monthly payments. The mortgage pre-approval letter is not a loan agreement. It is an estimate of how much you can afford to borrow based on the information you provided. Armed with this letter, you can start to view homes in your price range. To get pre-approved for a home loan, your mortgage lender will obtain your FICO credit score, review your credit reports, bank account transactions, debts, and assets, in very similar circumstances to a full mortgage application. Some lenders will tell you that you can get pre-qualified with them and get a letter. But a prequalification is just giving a lender verbal information rather than the lender verifying information and validating income, assets and credit. Pre – approvals are regarded as the more valid approval when submitting offers.
Search for Your Home
The PathHome App makes it easy to begin your property search directly from the app to see what properties are available in your preferred neighborhoods. A property search can be run at any time while you are saving for your down payment and decreasing your debt-to-income ratio. You'll be able to save each zip code, monitor your favorite listings, and see the final sales price of recently sold properties.
When you start searching for a home, be realistic. This is your first home, and it's unlikely to be your home forever. Make a list of "must-haves" and "nice-to-haves." For example, you must have 2 bedrooms and 1 bathroom, but 3-4 bedrooms and 2 bathrooms would be nice. Do you want an open-air floor plan or a defined living room, dining room, and kitchen? Do you need a separate home office or will a desk in a shared room be sufficient? Do you need a renovated kitchen, or is this something you can do later? Do you have the time to maintain a large backyard, or will a small yard or courtyard be easier to manage?
When you start touring homes in your price range, be prepared to take notes, photos, and videos to help you remember each home's features and details.
Don't feel rushed when viewing a home
Spend the time checking out obvious details that could be expensive to repair and deal-breakers later.
Test the plumbing by running the shower and bathroom, kitchen, and laundry taps to see the water pressure and how long it takes to get hot water.
Try the electrical system by turning switches on and off in each room.
Open and close the windows and doors. Doors and windows should shut securely. Older homes or homes recently renovated or flipped may have the windows painted shut.
Turn on the HVAC system to ensure it is working correctly. Follow the ductwork, if accessible, to check that it is properly connected and in good condition.
Are the front and backyard well maintained? Inspect the grass for signs of excessive weeds. Look at the condition of trees on the property and the surrounding houses. Note if any major tree branches are hanging over the home or if tall trees are leaning towards the home.
Evaluate the neighborhood
  • Do you need to commute to work daily? Is the neighborhood located within a reasonable commute time?
  • Are the other homes on the street well maintained? This will affect the long-term value of your investment.
  • How much traffic does the street get? You may need to drive past the house at different times of the day and compare weekday vs. weekend traffic.
  • Is there enough street parking for your family and visitors?
  • Is it conveniently located near places of importance to you, such as schools, supermarkets, restaurants, parks, and public transportation?
If buying a condo or townhome, you'll likely be paying a monthly HOA fee in addition to your monthly mortgage payment. HOA fees vary wildly, so ensure that your budget can afford the fee along with your other monthly commitments. The real estate agent should confirm what the HOA fee covers and what will be your responsibility. Some fees only cover the condo or townhouse exterior and roof, while others include utilities and grounds maintenance. Properties that include a community pool, gym, and other facilities will have a higher HOA fee to cover maintenance. Decide if they are facilities you'll use as you'll be paying for them regardless.
Making an Offer and Getting to Closing
1
Make an Offer
First-time homebuyers will appreciate having a real estate agent to help negotiate a fair offer based on the condition of the home and in comparison, to other homes in the neighborhood. A real estate agent can advise which repairs (if necessary) the seller should pay to repair and if you can ask them to contribute to your closing costs.
To demonstrate to the seller that you are a committed buyer, you will need to provide an earnest money deposit. The amount is usually 1-2% of the total purchase price.
2
Offer Accepted
Once you and the seller have agreed on a price, the property will go into escrow. This step will take the property off the market and allow you enough time to complete the remaining steps to close on your home.
Escrow includes depositing necessary monies, documents, and instructions into an account held by a third-party until all conditions for the sale are verified and complete.
3
Get a Home Inspection
As a first-time homebuyer, your offer should include a contingency for a home inspection (approximately $300-$600 depending on the size of the home and the city) to check for signs of structural damage or repairs.
A home inspector will look at the home's foundation, structural components, attic and insulation, roof, HVAC, plumbing, and electrical systems, then provide a written home inspection report with results.
4
Negotiate Repairs
The home inspector will provide you with a report on the condition of the home and property. Use the report to decide if you want to ask the seller to repair any damage noted in the report before closing.
Some sellers may prefer to reduce the home's final cost so you, rather than them, make the necessary repairs.
Sign Purchase & Sales Agreement
Once any terms and repairs have been negotiated, you will be given a Purchase & Sales Agreement by your real estate agent to sign. This is your commitment to the seller that you will buy their home.
Select Your Loan Program & Submit Full Mortgage Application
While you estimated your home budget, payments, and interest early in the homebuying process, the housing market, your financial circumstances, the type of home you are buying, and your final purchase price could've changed since then. Work with your mortgage originator to select the loan program that best meets your financial needs.
If you want to pay off your mortgage earlier, pay significantly less interest over your loan term, and can afford a higher monthly payment, compare 15-year vs. 30-year mortgage terms.
Have these documents ready to submit application for your mortgage
  • Your most recent pay stubs
  • Your current bank statements
  • Most recent retirement account statements, e.g., 401(k)
With The PathHome App users can securely upload and store their personal and financial documents to the Documents folder, then select which documents they want to share with their mortgage originator for their mortgage application. Statements of the enrolled financial accounts can also be shared.
Get the Home Appraised
Your mortgage lender will arrange for an appraiser to provide an independent estimate of the value of the home you are buying. Having the home appraised will let all parties (you, the lender, and the seller) know the home's fair value. The appraisal fee is approximately $600-700, depending on your city, and the cost is usually paid directly to the appraisal company and part of your estimated closing costs.
Final Steps Before Closing
Appraisal Outcomes
If your appraisal comes in higher
If your appraisal comes in higher than the price you are paying for the home, then you'll immediately benefit because you'll have additional home equity. For example, if you are paying $250,000 for a home and the appraiser says it's worth $270,000, you will have gained $20,000 in equity.
If the appraisal comes in lower
If the appraisal comes in lower than the sales price, you and the seller will need to abide by the contract you and your real estate agent have negotiated. However, if your contract is contingent on an appraisal, one option is to withdraw your offer and have your earnest money returned. Some loan programs, including VA and FHA loans, will require that the purchase price is not higher than the appraised value, so your real estate agent will need to negotiate with the seller for a price reduction.
Shop for Homeowners Insurance
Homeowners insurance is not required by law. However, mortgage lenders will require a policy to protect their investment before they close on your loan. The easiest place to start is with the insurance company that insures your vehicles. Many insurance companies offer a discount for an insurance bundle package.
Depending on where your home is located, you may also need to obtain flood insurance or earthquake insurance as regular homeowner insurance policies do not cover damage caused by natural disasters.
Obtain Conditional Approval Letter
The approval letter is an agreement between the homebuyer and their mortgage lender that outlines the agreed-upon terms of a mortgage, including the loan amount, loan purpose, loan term, and the mortgage loan program. The receipt of this letter signifies that financing is officially approved.
A few days before closing, the mortgage lender will provide you with the Closing Disclosure – so you will know the exact amount that will need to be wired from your bank and you can review your estimated payment etc.
Final Home Walk-Through
If you had negotiated for the seller to make repairs to the home, conduct a walk-through a few days before closing to ensure the repairs were made to your satisfaction. For repairs to structural damage, arrange for your home inspector to join you on the walk-through.
Closing on Your New Home
On closing day, you will sign a thick stack of paperwork, including the loan documents, to complete your home purchase. Unless your mortgage lender instructed you to transfer the monies in advance, you would wire the balance of funds to close to escrow covering your closing costs, down payment.
Getting the Keys to Your New Home
Often the signed paperwork must first be returned to the mortgage lender for the loan check to be issued, which usually takes a couple of days. Once the seller has received all monies, you will be ready to move into your new home.
If all monies were exchanged at closing, you would receive your home keys immediately. Don't forget to add your new home and mortgage to your PathHome App to track the estimated home value, home equity, and your net worth.
Congratulations!
The home is now yours and you can start moving in. Click below to download PathHome App or Scan the QR Code to the right !!!
Contact me for any questions at:
818-359-2723 or
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