7 First-Time Homebuyer Tips Nobody Tells You (Especially #4)

By John Collins | OwnTheRoof.com

You've been told you need 20% down to buy a home.

You've run the numbers. On a $250,000 house, that's $50,000. So you keep renting, keep waiting, and keep watching that goal move further away — because rent keeps going up while your savings stay flat.

Here's what nobody tells you: that 20% rule is a myth. And it's costing renters in Michigan and across the country years of wealth-building.

After 37 years in real estate, I've helped hundreds of families buy their first home with little — and sometimes zero — out of pocket. These are the seven tips I wish every first-time homebuyer knew from day one.

Tip #1: Stop Waiting to "Save Enough" — Programs Already Have the Money

There are over 2,500 down payment assistance (DPA) programs in the United States right now. These programs exist at the federal, state, county, and city level — and most of them go unclaimed every year because renters simply don't know they exist.

In Michigan alone, there are 40+ DPA programs. Some offer grants you never have to repay. Others offer forgivable loans that disappear after a few years of living in the home.

The money is already there. You just have to know where to look.

Action step: Download the free ZeroDownScout app and search your zip code in under 60 seconds. It's the fastest way to see which programs you actually qualify for.

Tip #2: You Don't Need a 750 Credit Score

One of the biggest first-time homebuyer mistakes is assuming you need near-perfect credit.

FHA loans — backed by the federal government — are available to buyers with credit scores as low as 580. Some programs go even lower with compensating factors like steady income or low debt.

A 620 score will qualify you for most conventional loan programs. If your score is below that, it's fixable — often within 90 to 180 days — with the right steps.

(My book "No Credit? No Problem!" walks through exactly how to do this.)

Tip #3: Your Monthly Payment Might Be Less Than Your Rent

This one surprises people every time.

Let's say you're paying $1,400/month in rent. A $200,000 home at a 6.5% interest rate with an FHA loan would put your monthly payment — including taxes and insurance — around $1,500 to $1,600/month.

For $100–$200 more per month, you're building equity instead of paying your landlord's mortgage.

Now add DPA funds that cover your down payment, and your out-of-pocket cost to get into that home could be nearly zero.

Tip #4: Most DPA Programs Are Hyperlocal — And That's Good News

Here's the secret the big mortgage websites don't advertise: the best assistance programs are local. City programs. County programs. Employer-assisted housing. Neighborhood revitalization grants.

These programs are smaller and less competitive than federal options, which means your odds of qualifying are actually better.

The catch? They're hard to find unless you know exactly where to look — and they change frequently.

That's exactly why we built ZeroDownScout. The app pulls from a database of 3,000+ programs and filters by your exact location, income, and situation — so you're not wading through programs that don't apply to you.

Tip #5: Renting Isn't "Saving Money" — The Math Doesn't Work

Let's do the math that most people avoid.

If you're paying $1,400/month in rent, that's $16,800 a year. Over 10 years, you've handed your landlord $168,000 — with nothing to show for it. No equity. No asset. No net worth.

A homeowner paying a similar amount over 10 years has built tens of thousands in equity, benefited from appreciation, and locked in a fixed payment that doesn't increase every year at lease renewal.

The rent trap is real. The only way out is ownership.

Tip #6: Get Pre-Approved Before You Do Anything Else

Most first-time buyers start by browsing Zillow. That's backwards.

Getting pre-approved first tells you exactly what you can afford, strengthens any offer you make, and — most importantly — reveals which DPA programs you're eligible for based on your real numbers.

A HUD-approved housing counselor can do this for free. Your state housing finance agency (in Michigan, that's MSHDA) often has counselors on staff.

Tip #7: Use Free Tools — Don't Pay for What's Already Free

There's an entire industry built around charging first-time buyers for information that is completely free.

Free resources available to you right now:

• ZeroDownScout — free app to find DPA programs by zip code

• AnnualCreditReport.com — free credit reports (all three bureaus)

• HUD.gov — free housing counselor directory

• MSHDA.net — Michigan-specific programs and lender list

• OwnTheRoof.com — free education, webinars, and one-on-one consultations with John

You don't need to pay anyone to find out you qualify for a program. Start with the free stuff.

The Bottom Line

The biggest obstacle to first-time homeownership isn't money — it's not knowing where the money already is.

You may be closer to buying your first home than you've ever been told. And the fastest way to find out is to see what programs are waiting for someone exactly like you.

Download ZeroDownScout free on iOS — search your zip code, see your programs, and take the first real step toward owning your roof.

John Collins is a 37-year real estate veteran and founder of OwnTheRoof.com. He is the author of "No Down Payment? No Problem!" and "No Credit? No Problem!" and creator of ZeroDownScout, the free app that helps renters find down payment assistance programs nationwide.

Ready to talk through your situation? Schedule a free consultation at OwnTheRoof.com.