How to buy a home in the USA: tips

Hi, my name is Steve Tsvetkov. I’m a US mortgage broker and I’ve been financing real estate for over 10 years. Thousands of clients have come through me buying their first, second, and sometimes third home. I know every pitfall of the mortgage market, and I’m ready to share the key points that will help you get financing and make the right choice when buying a home.

What are the minimum requirements to get a mortgage? If you want a mortgage in the USA, the bank looks at a few main factors: Credit score. If your FICO score is above 700, you’ll get the best terms. The minimum threshold for a conventional mortgage is 620, but if yours is lower, you can consider FHA programs, where 580 is enough.

Income. Banks require that you’ve worked in the USA for at least two years and have steady earnings. Exceptions apply to high-earning professionals, for example in tech. Down payment. A conventional mortgage requires 10-20%, but there are programs where you can buy with 3.5% (FHA) or even nothing down (VA, USDA).

Debt. If you have debt, the bank considers your Debt-to-Income Ratio (DTI). Ideally it should be no higher than 43%. Can you buy a home with no down payment? Yes, such programs exist. For example, California Dream For All is a grant program in which the state of California gives the buyer 20% of the home’s value.

It isn’t free money, but as long as you live in the home you don’t have to pay it back. I had a client in San Jose who used this program to raise their budget from $750,000 to $900,000. They weren’t counting on a home like that, but with state support they were able to buy in a more expensive neighborhood.

Why is it important to work with a mortgage broker? Some buyers go straight to their bank and get a mortgage there. But what happens in practice? “Banks work first and foremost for themselves, not the client. As a mortgage broker, I work with 40+ banks at once, finding the best offer specifically for you.”

Working with me, clients get: ✔ Access to the best interest rates ✔ The ability to use programs that lower the down payment ✔ Faster processing (many of my deals close in 2-3 weeks). A client recently came to me after trying to get a mortgage at a big bank. They were offered 7% APR, but when we compared offers on the market, it turned out we could get 6.25%.

That rate difference saved them $300-400 a month on payments! Comparing home prices across states. The USA is a big country, and home prices depend on the region. For example: State; average home price (2024); average rent — California, $750,000, $3,500/mo; Texas, $350,000, $1,800/mo; Florida, $400,000, $2,200/mo. So while buying in California takes a serious investment, in Texas you can find a solid option for half the price.

How can you cut housing costs? One of the best ways is buying a multi-unit home (duplex, triplex). “When I was 26, I bought a duplex. I lived on the upper floor and rented out the lower one. In the end, tenants covered half of my mortgage payment.” If you want to lower your costs, consider renting out part of your home.

Later you can rent out the whole home for steady passive income. Ready to take the first step? Let’s review your situation and find the best solution! FAQ. Find answers to our clients’ most common questions. Can you buy a home without a realtor? Yes, but it increases the risks.

A realtor helps close the deal correctly and negotiates a first-year warranty with the seller. Do you need a mortgage broker? Not required, but it helps save time and find the best terms. Brokers work with 40+ banks at once, improving your odds of approval.

What minimum income do you need to buy a home? It depends on the price. For a $400,000 home, you typically need an income of $70,000-80,000 a year. However, if you buy a multi-unit home, rent from the extra units can count toward your income. What if I have a low credit score?

You can try applying for an FHA loan or work with a mortgage broker who can find alternative lending programs. Buying real estate in the USA is complex but entirely achievable. Even with a small down payment or unstable income, there are mortgage programs that can get you financing.

The key is to prepare carefully, work with professionals, and choose the right strategy.