First-Time Buyer Guide
Everything you need to know about buying your first home in Utah — explained simply, without the jargon.
The Bottom Line
Buying your first home feels overwhelming — but it doesn't have to be. The process has clear steps, and you don't have to figure them out alone. Most first-time buyers are surprised to find they can afford more than they thought, and that getting started is easier than expected. This guide walks you through the whole process in plain English.
The 8 Steps to Buying Your First Home
Follow these steps in order — each one builds on the last.
Check Your Credit Score
Your credit score is one of the first things a lender looks at. A score of 620 or higher qualifies you for most conventional loans. A score of 580+ qualifies for FHA loans. Don't know your score? Check for free at annualcreditreport.com. If your score needs work, pay down credit card balances and avoid opening new accounts for 6 months before applying.
Even a 20-point improvement in your credit score can save you thousands in interest over the life of your loan.
Figure Out What You Can Afford
A good rule of thumb: your total monthly housing payment (mortgage, taxes, insurance) should be no more than 28% of your gross monthly income. For example, if you earn $6,000/month, aim for a payment under $1,680. Use an online mortgage calculator to estimate payments at different price points before you start shopping.
Don't forget to budget for property taxes (~0.6% of home value in Utah), homeowners insurance (~$1,200/year), and HOA fees if applicable.
Get Pre-Approved
Pre-approval is a letter from a lender saying they'll loan you up to a certain amount. It's not a guarantee, but it shows sellers you're serious. To get pre-approved, you'll need: 2 years of tax returns, recent pay stubs, 2–3 months of bank statements, and a government-issued ID. Pre-approval usually takes 1–3 business days.
Get pre-approved before you start home shopping — in Utah's competitive market, sellers often won't consider offers without it.
Understand Your Down Payment Options
You don't need 20% down. Many first-time buyers put down 3–5%. The trade-off is that with less than 20% down, you'll pay Private Mortgage Insurance (PMI), which typically adds $50–$200/month to your payment until you've built 20% equity. Some programs allow 0% or 3.5% down — see the programs section below.
Putting more down lowers your monthly payment and eliminates PMI faster, but make sure you keep enough cash for closing costs and an emergency fund.
Find a Real Estate Agent
As a buyer, you don't pay your agent's commission — the seller does. A good buyer's agent will help you find homes, negotiate the price, guide you through inspections, and protect your interests all the way to closing. Interview a couple of agents and choose someone who knows the local market well and communicates clearly.
Ask your agent: How many buyers have you worked with in the last 6 months? What neighborhoods do you know best? How do you communicate — phone, text, email?
Make an Offer
When you find the right home, your agent will help you write an offer. This includes the price you're offering, your earnest money deposit (typically 1–2% of purchase price), and any contingencies — like a home inspection or financing contingency that lets you back out if something goes wrong. In a competitive market, your agent may advise offering at or above asking price.
Don't skip the inspection contingency to win a bidding war. A home inspection ($300–$500) could reveal problems that cost tens of thousands to fix.
Get a Home Inspection
After your offer is accepted, hire a licensed home inspector ($300–$500) to check the roof, foundation, electrical, plumbing, HVAC, and more. The inspector will give you a detailed report. You can use this to negotiate repairs with the seller or, in some cases, walk away from the deal entirely.
Attend the inspection in person. You'll learn a lot about the home, and the inspector can answer questions on the spot.
Close on Your Home
Closing is the final step. You'll sign a lot of documents (usually 30–50 pages), pay your closing costs (typically 2–5% of the loan amount), and receive your keys. Budget for closing costs separately from your down payment — they can add up quickly. Your lender will provide a Closing Disclosure 3 business days before closing that breaks down every cost.
Review your Closing Disclosure carefully and compare it to your original Loan Estimate. Costs should be very close — ask your lender to explain any differences.
First-Time Buyer Programs
You may qualify for programs that reduce your down payment, lower your rate, or provide direct assistance. Here are the most common options in Utah.
FHA Loan
Backed by the Federal Housing Administration. The most popular choice for first-time buyers because it's easier to qualify for. You'll pay a Mortgage Insurance Premium (MIP) for the life of the loan if you put less than 10% down.
Best for: Buyers with less-than-perfect credit or limited savings.
Conventional 97
A conventional loan with just 3% down. PMI is required but can be removed once you reach 20% equity — unlike FHA loans. Often has lower long-term costs than FHA if your credit is strong.
Best for: Buyers with good credit who want to build equity faster.
Utah Housing Corp (UHC)
Utah's state housing authority offers down payment assistance loans to cover your 3.5% FHA down payment. This means you can potentially buy a home with little to no money out of pocket (excluding closing costs).
Best for: Utah buyers who have income but limited savings for a down payment.
HUD Good Neighbor Next Door
Teachers, law enforcement officers, firefighters, and EMTs can buy HUD-owned homes at a 50% discount in designated areas. You must commit to living in the home for 36 months.
Best for: Teachers, police, firefighters, and EMTs buying in eligible areas.
VA Loan
For active-duty military, veterans, and surviving spouses. No down payment required and no PMI — one of the best mortgage products available. Backed by the Department of Veterans Affairs.
Best for: Active military, veterans, and eligible surviving spouses.
USDA Loan
No down payment required for homes in USDA-eligible rural and suburban areas. Parts of Utah County (including some areas near Eagle Mountain and Santaquin) may qualify. Income limits apply.
Best for: Buyers purchasing in rural or suburban areas within USDA-eligible zones.
Common Myths — Busted
Don't let misinformation stop you from buying. Here are the most common things first-time buyers get wrong.
"I need 20% down to buy a home."
Most first-time buyers put down 3–5%. Programs like FHA and Utah Housing can reduce that even further. The 20% figure eliminates PMI, but it's not a requirement.
"My credit isn't good enough."
FHA loans accept scores as low as 580. If your score is between 500–579, you may still qualify with 10% down. Working with a lender to improve your score by even 20–40 points can make a big difference.
"Renting is always cheaper than buying."
In many Utah cities, monthly mortgage payments are comparable to rent — and every payment builds equity. Over time, you're building wealth instead of paying someone else's mortgage.
"I should wait for prices to drop."
Trying to time the market is risky. Utah home values have consistently appreciated over the long term. Waiting often means paying more later, and you miss out on equity-building in the meantime.
Terms You'll Hear (Plain English)
Real estate has a lot of jargon. Here's what it actually means.
Pre-Approval
A lender's written commitment to loan you up to a certain amount, based on your finances.
Earnest Money
A deposit (1–2% of price) you put down to show the seller you're serious. It goes toward your down payment at closing.
Contingency
A condition that must be met for the sale to go through — like a home inspection or financing approval.
Closing Costs
Fees you pay at closing beyond the down payment — typically 2–5% of the loan. Includes lender fees, title insurance, and prepaid taxes.
PMI
Private Mortgage Insurance. A monthly fee added to your payment when you put less than 20% down. It protects the lender, not you.
Appraisal
A professional estimate of the home's market value, required by your lender to make sure you're not overpaying.
Equity
The portion of the home you actually own. If your home is worth $500K and you owe $400K, you have $100K in equity.
Title Insurance
Protects you (and your lender) if someone later claims ownership of the property. Required at closing.
Before You Start — Quick Checklist
Ready to Take the First Step?
We work with first-time buyers every day and love helping people get into their first home. Reach out — we'll answer your questions and help you figure out where to start.
