The internet will tell you that you need 20% down and a 780 credit score to buy a home. Neither is true. But the internet will also let you stretch into a mortgage that quietly strangles your budget for 30 years. Both mistakes are avoidable.
The five numbers that actually decide readiness
- Credit score. 620 qualifies for most programs. 720+ unlocks the best rates. Every 20 points between those is real money.
- Debt-to-income ratio (DTI). Lenders want your total monthly debt — including the new mortgage — below 43% of gross income. Under 36% is better.
- Down payment + closing costs. FHA goes as low as 3.5% down. Conventional can be 3–5%. Closing costs add another 2–5% of the purchase price.
- Cash reserves after closing. At least 3 months of the new mortgage payment, ideally 6. If closing wipes you out, the first furnace repair wipes you out again.
- Employment stability. Two years in the same field is the traditional bar. Job changes are fine if the income is steady.
Down-payment assistance nobody tells you about
There are over 2,000 down-payment assistance (DPA) programs in the US. Most first-time buyers never hear about them because their real-estate agent and their lender both make more money when you pay cash down. A few categories worth researching:
- State and city DPAs. Forgivable or deferred second mortgages for first-time buyers under a certain income.
- FHA, VA, USDA. Government-backed loans with lower down payments and easier credit thresholds. VA requires military service; USDA requires a rural property.
- First-generation buyer programs. Some states offer extra grants if neither parent ever owned a home.
- Employer-assisted housing. Hospitals, universities, and some large employers subsidize home purchases near their campuses.
The "tight" test
Banks will approve you for a mortgage that makes your life tight. Your budget knows the number that actually fits. Before you get pre-approved, calculate the monthly payment (principal + interest + taxes + insurance + HOA) that still lets you fund your emergency fund, retirement, and a sinking fund for home repairs (1% of the purchase price per year is a reasonable starter). If the number the bank offers you is bigger than that, negotiate yourself down, not up.
Your sequence
Close the gap on credit and DTI first (6–18 months for most people). Build cash reserves while rates move. Get pre-approved only when you are ready to shop in the next 90 days, because pre-approvals expire and hard pulls ding your credit.
This is education, not advice on a specific mortgage. Rates, programs, and eligibility change — verify with a licensed lender before you sign anything.