Topics in this step

Home must-haves
Financial considerations
Step 1 checklist
FAQ

Home considerations: your must-haves

What do you want in a home? If you’re the type of person who makes lists, now would be a good time to start one. Here are some questions to consider:

What do you like and dislike about renting? Would owning be better?

Where do you want this home to be?

Are you okay with sharing walls or would you prefer a single-family space?

How much of a yard (if any) would you like?

Do you want a home that’s move-in ready or are you okay with a place that needs some work?

Will you do your own home and yard maintenance or would you rather someone else handle it?

Don’t worry if you aren’t sure exactly what you want. Changing your mind is normal and being flexible is helpful in homebuying.

Want help as you start your homebuying journey?

If you’d like some guidance as you ease into the homebuying process, a mortgage loan officer (MLO) is a great person to turn to. They can talk you through every step.

Find an MLO near you

Financial considerations: your money

You also need to consider how much home you can afford. Factors like your monthly budget, your credit score and debt-to-income ratio (DTI), and how much you have for a down payment are all important.

To get started, here are a few calculators for you to play around with:

Get an estimate of what buying versus renting could mean for you.

Figure out how much mortgage you can afford with our mortgage affordability calculator.

Determine how much of a down payment you’d like to have.

Estimate what your monthly home payment could be with our mortgage payment calculator.

What’s your credit score?

Lenders look at your credit score as a prediction of how likely you are to repay a loan on time. As such, the higher your credit score, the better off you’ll be when it comes to getting a mortgage – and many other loans.

Read about credit reports, credit and buying a home.

Learn how to build credit to buy a home

What credit score do you need to buy a house?

Read about credit scores and mortgages

Build and maintain a good credit score.

Review the five steps to improve credit

What’s your monthly budget?

You can do this by reviewing previous bank statements and bills or keep track over the next few months. If you’re a U.S. Bank client, the Money Tracker in the mobile app may be helpful.

What’s your debt-to-income ratio (DTI)?

DTI compares how much money you owe each month against how much money you earn each month (your gross monthly income). Lenders use it as another measure of how likely you’ll be to make payments on what you borrow. The lower your DTI, the better.

Learn more about DTI and how to understand yours

What’s your down payment look like?

Once you have a sense of how much house you can reasonably afford, it’s time to think about your down payment. Although a 20% down payment is considered ideal, the typical down payment among first-time homebuyers ranges between 6 to 7%.1 Whatever your target amount, if you’ve already been saving for it, great! If not, it’s time to start.

Decide how you’ll save for a down payment.

Set a plan to save for a down payment

What’s the average down payment for a home?

Read about typical down payment amounts

Understand down-payment assistance programs.

Learn about down-payment assistance programs

Curious about assistance or grant programs?

If you’re interested in down payment assistance or grant programs for homebuyers limited incomes, U.S. Bank Access Home is here for you. You’ll find additional resources, including financial education, guidance from our coaches or mortgage loan officers, and mortgage options you might not have heard about.

First-time homebuyer checklist: Step 1

Once you’ve accomplished these items, we recommend moving on to the next step.

  • Check your credit and manage it.
  • Get your finances in order and figure out what you can afford.
  • Understand your debt-to-income ratio (DTI).
  • Make a plan for a down payment.
  • Create a wish list for your first home.
  • See if you prequalify and get an estimate of how much house you can afford.
Back to the beginning Step 2: Looking for a home

Get answers to your frequently asked questions.

Depending on how much you can afford, your down payment could make a big impact on your monthly mortgage payments. Currently the average down payment is about 6 to 7% for a first-time homebuyer. We offer several mortgage options that allow an even lower down-payment percentage, though you could avoid certain fees associated with mortgages, and lower your monthly payment, by maximizing your down payment. A 20% down payment typically eliminates the addition of private mortgage insurance, or PMI.

You don’t need perfect credit to qualify for a mortgage loan, but your credit score is definitely a factor that lenders consider. You could qualify for a U.S. Bank mortgage loan with a credit score as low as 620, but monitoring your credit activity will be important as you prepare to buy a home. The higher your score, the better.

Yes. There isn’t a specific minimum income to qualify for a mortgage and there are several loan options and programs available that can help make buying a home with low income possible.

Take the next step

Prequalify
Call 888-291-2334
Request a call
Find a mortgage loan officer
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Disclosures

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.

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  1. From the article “First-time home buyers shrink to historic low of 24% as buyer age hits record high”, published November 4, 2024 by the National Association of REALTORS®. 
    https://www.nar.realtor/newsroom/first-time-home-buyers-shrink-to-historic-low-of-24-as-buyer-age-hits-record-high

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