First-time home buyer classes: A guide

A first-time home buyers class is designed to help new buyers understand the process of buying a home, from budgeting to closing. By explaining complex industry terms and loan requirements, these courses can help you feel confident and ready to buy a home. If you want to make smart financial decisions and avoid common pitfalls, these classes can help you get started.

Key takeaways:

• Enrolling in a first-time home buyer class helps you understand how to buy a home so you can make informed and confident choices.
• A first-time home buyers education class can be taken in person (usually taking 4 to 8 hours) or online at your own pace (typically taking 1 to 2 days).
• Many first-time home buyer classes that are HUD-approved are required to unlock valuable down payment assistance programs, grants, and lower mortgage rates.

What is a first-time home buyers education course?

A first-time home buyers education course will walk you through how to buy a house. Lenders recommend – and some loans require – such classes.

Here is what you can expect to cover in a first-time home buyers class:

• How to know when to buy a house
• Figuring out how much house you can afford
• How to compare different types of mortgages and lenders
• Deciding which type of house you want to buy
• Programs that can making buying your first home more affordable

Completing an education course also may be required when applying for down payment assistance programs or specific loan types.

For example, courses are required for the Freddie Mac Home Possible^® and Fannie Mae HomeReady^® programs,² which may offer:

• Lower down payments
• Flexible credit requirements
• Help with closing costs
• Lower mortgage interest rates
• Grant options

How long is a first-time home buyers course?

The time commitment required for a first-time home buyers education class can vary.

In-person courses can last anywhere from 4 to 8 hours, often broken up into a few weekday evening sessions or a single weekend day. Online classes may take a day or 2 to complete.

How to find a first-time home buyers class

To get started, check the U.S. Department of Housing and Urban Development (HUD) for a list of approved courses. Your lender or real estate agent also may be able to suggest a course.

Online and on demand

Online courses are readily available. An online search can help you find options that fit your timeline and budget. Many reputable national nonprofits provide digital platforms where you can register and start learning immediately.

At a nearby location

You also can find an in-person home buying class close to home. Lenders and agents often offer courses for home buyers. If you are already working with a real estate agent or lender, ask them if they recommend a class. Make sure the course meets the requirements if you need it to qualify for a specific grant or loan program.

What to expect from your home buyers course

The purpose of a first-time home buyers course is to help you prepare to buy a home. By understanding each step and knowing what comes next, you can avoid common first-time home buyer mistakes and make choices with confidence. Most courses cover the following topics.

Budgeting for homeownership

A major pillar of any course is learning how to manage your finances before and after buying property. Budgeting for a home requires prospective buyers to understand the specific requirements to get a mortgage. Each type of mortgage has slightly different requirements for a minimum down payment, closing costs, credit score, and debt-to-income (DTI) ratio. The class also can help you understand how to improve your finances, if needed, to qualify for a loan.

Selecting a home

The class will explain the process of purchasing a home, with an emphasis on how to determine how much house you can afford. You'll also learn the value of working with an experienced real estate agent, who can advise you on homes to consider, how much to offer, and what common contingencies to ask for when you find a house you want. In the meantime, you can use the home affordability calculator from Rocket Mortgage to get a rough estimate.

Financing your home purchase

Finding the right lender isn't a decision you should rush and it's not always an easy choice. A home buying course can show you how shop around and thoroughly evaluate your loan offers and lender options.

The right mortgage

The loan you choose will determine your minimum down payment, your chances of loan approval, the size of the loan you can get, and more. The most common choice is a conventional conforming loan, but a government-backed option such as an FHA, VA or USDA loan may be more affordable or easier to qualify for.¹ You also need to compare an ARM vs. a fixed-rate mortgage, and a 15-year vs. a 30-year loan term.

Rocket Mortgage currently doesn't offer USDA loans.

The right lender

A first-time home buyers course will also provide some questions to ask a mortgage lender so you can compare Loan Estimates. It may not seem like much, but a small difference in your mortgage interest rate can make a big difference in how much interest you pay. You also should consider the lender's reputation for customer service.

Closing the deal

Buying a home isn't a done deal once your offer is accepted. You'll need to officially apply for your mortgage and order a home appraisal and a home inspection. You'll also need to understand closing costs, which you must pay at closing and typically total 3% – 6% of your loan amount.

Managing a home

Once you get the keys, you need to know how to responsibly manage your new asset. This includes preparing for the ongoing costs of homeownership, such as property taxes, homeowners insurance, HOA fees, unexpected emergencies, maintenance, and repairs.

What do classes for first-time home buyers cost?

The cost of a home buyer education course varies depending on the provider and the certification you need.

Some classes, like Fannie Mae HomeView, are free, though it is important to note that this course is not approved by HUD.

Other courses, particularly those offered by local housing authorities or community organizations, charge a fee of perhaps $50 or more.

While free options are great for general learning, many first-time buyers will specifically need a HUD-approved course. Completing a HUD-approved class is often a requirement to qualify for certain state-sponsored down payment assistance programs and grants, local housing programs, or specialized affordable loans that can save you thousands of dollars.

Is it worth taking a first-time home buyers class?

If you’re a first-time home buyer, taking a course will help prepare you for the experience. Buying a house will be an involved process. Going into it armed with knowledge and skills can help you feel more confident in your abilities to make the best decisions for you.

The bottom line: Get your questions answered before you buy a home

First-time home buyer courses summarize essential topics like budgeting, repairing credit, selecting an affordable home, choosing a mortgage, and managing long-term housing costs. While free courses are readily available online, you may need to pay a fee for a certified, HUD-approved course if one is required for down payment assistance grants and flexible loan options.

Ready to take the next step? Explore your borrowing options today with Rocket Mortgage.

¹ Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

² Client will receive a 1 point (1.000) loan level price adjustment (LLPA) credit on HomeReady and Home Possible purchase loans locked on or after January 2, 2024. One point (1.000) is equal to 1% of the loan amount. Minimum credit amount will be $2,000. Maximum loan amount is $350,000. Offer is not available with any other discounts or promotions. Offer cannot be retroactively applied to previously closed loans or loans already in process; offer is not transferable. Rocket Mortgage reserves the right to cancel/modify this offer at any time. Additional restrictions/conditions may apply. This is not a commitment to lend.