The Complete Guide to Buying a Home in 2026
Everything you need to know about buying a home — from figuring out what you can afford, to understanding loan types, qualifying for a mortgage, navigating the process, and closing. This is the hub for our entire buying a home content cluster.
Step 1 — Know What You Can Afford
Before you browse listings or talk to a real estate agent, get clear on your numbers. Two ratios determine how much house you can finance: the 28% front-end rule (housing payment ≤ 28% of gross monthly income) and the 43% back-end rule (all debts ≤ 43% of gross monthly income).
These aren’t arbitrary — they’re the standard lender thresholds that determine loan approval. Exceeding them doesn’t make buying impossible, but it makes qualification significantly harder and usually means FHA or a co-borrower is needed.
Or find your answer by salary — we’ve built a specific guide for every income level from $50K to $1M:
Step 2 — Understand Your Loan Options
Most buyers qualify for multiple loan types. Choosing correctly can save tens of thousands of dollars.
| Loan Type | Min Down | Min Credit | Best For | Key Trade-off |
|---|---|---|---|---|
| Conventional | 3% | 620 (740+ for best rates) | Strong-credit buyers with 5%+ down | PMI until 20% equity — then cancels |
| FHA | 3.5% | 580 | Lower credit scores, smaller down payment | MIP is permanent if <10% down — must refi to remove |
| VA | 0% | No minimum (620 typical) | Veterans and active military | One-time funding fee; no PMI ever |
| USDA | 0% | 640 | Rural areas, moderate income | Geographic restrictions; income limits |
| Jumbo | 10–20% | 700–740+ | Loan amounts above $766,550 | Stricter requirements; slightly higher rates |
Step 3 — Check Your Qualification
Lenders evaluate five things: credit score, DTI ratio, down payment and cash reserves, employment history, and the property itself. Most application denials come from DTI being too high or credit score being too low — both are fixable before you apply.
Step 4 — Compare Rates and Lock
Your interest rate is one of the biggest financial decisions you’ll make. A 0.5% rate difference on a $400,000 mortgage is $120/month — $43,200 over 30 years. Always compare at least 3–5 lenders before locking.
Step 5 — Budget for All Upfront Costs
The down payment is just part of what you need at closing. Closing costs — the fees paid to lenders, title companies, and local government — typically add another 2–5% of the purchase price. On a $400,000 home, that’s $8,000–$20,000 beyond your down payment.
Rates by State
Mortgage rates vary by state. Find current 30-year fixed, 15-year fixed, FHA, VA, and ARM rates for your state: