In a Yahoo Finance guide, Hal Bundrick and E. Napoletano lay out the main steps for a first-time home buyer entering the housing market in 2026. The article focuses on preparation, mortgage options and special benefits available to eligible buyers.
The authors say the definition of a first-time home buyer extends beyond people who have never purchased a home. It can also include borrowers who have not owned a home in the last three years, whether solely or jointly. The same status may apply to a displaced homemaker or single parent who has not owned a home other than jointly with a spouse in the last three years.
The first step in the guide is to work out how much house you can comfortably afford. According to the article, total housing costs — including mortgage payments, property taxes and homeowners insurance — are often recommended to stay around 28% of gross income. As a rough starting point, buyers are advised to divide their gross monthly salary by four.
The guide also highlights closing costs, which generally range from 2% to 5% of a home's purchase price. For a $500,000 home, that would amount to between $10,000 and $25,000. The article says buyers may be able to lower those costs by comparing multiple lenders, seeking lender credits and negotiating directly with the lender. In some markets, seller concessions can also reduce the cash needed at closing.
Buyers are then encouraged to shop around among mortgage lenders. Citing Fannie Mae research, the article says more than 60% of home buyers over the last 10-plus years compared more than one lender. The authors advise looking beyond the advertised APR and reviewing mortgage origination fees, total closing costs and Loan Estimates before getting preapproval and moving on to the home search with a clear list of must-haves and nice-to-haves.
