Learning area 3 of 6 · Prepare
First-Time Housing & Homeownership
From your first lease to your first set of house keys.
Housing is usually the biggest monthly cost in any budget, so it is one of the most important decisions you will make. Your first place will probably be a rental. Your first home purchase may be years away, but the habits that make it possible start now.
This area covers renting versus buying, getting ready to move out, how mortgages work, down payments and closing costs, what you can comfortably afford, the ongoing costs of owning, and how to prepare financially for a first home.
Lessons
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Renting versus buyingCompleted Free preview
Neither is always better. The right choice depends on time, money and flexibility. About 6 minutes.
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Preparing to move outCompleted Complete Studio
Your first lease comes with costs and rules you should know before you sign. About 6 minutes.
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Mortgage basicsCompleted Complete Studio
A mortgage is a long-term loan secured by the home you buy. About 7 minutes.
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Down payments and closing costsCompleted Complete Studio
The cash you need to buy a home is more than the down payment. About 6 minutes.
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Housing affordabilityCompleted Complete Studio
What a lender approves and what fits your life can be very different numbers. About 6 minutes.
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Property taxes, insurance and maintenanceCompleted Complete Studio
Owning a home has costs that continue long after you move in. About 5 minutes.
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Preparing financially for a first homeCompleted Complete Studio
The path to a first home is built years before the purchase. About 5 minutes.
Practice and plan
Interactive tools with fictional sample numbers you can replace with your own. Nothing you type is sent anywhere. Included with the Complete Studio.
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Rent vs. Buy Explorer
Compare the monthly cost of renting with the full monthly cost of owning, plus the cash needed upfront.
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First Home Savings Planner
Estimate the total cash needed to buy (down payment, closing costs, reserve) and how long it may take to save.
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Housing Affordability Explorer
See the housing payment and estimated home price that fit a housing-cost share of income you choose.
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Housing & Homeownership quiz
5 questions with an explanation for every answer.
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Worksheet: My Housing Plan
A printable worksheet to put this area into practice.
Key takeaways
- Renting and buying are both reasonable; time, savings and stability decide.
- A first rental costs far more upfront than one month's rent.
- Compare Loan Estimates from more than one lender.
- You need cash for the down payment, closing costs and a reserve.
- Shop below your approval; keep housing near or under your comfort number.
- Budget every month for taxes, insurance and maintenance.
Next step
Your housing readiness check
Pick the next housing step that fits you: a first rental or a future first home, and build its plan.
- Use the First Home Savings Planner (or the move-out section) to find your cash target.
- Run the Affordability Explorer with your current or expected income.
- Write a target date and monthly savings amount.
- Bookmark your state's first-time homebuyer program page.
Related lessons in other areas
Sources and further reading
- CFPB: Loan Estimate and Closing Disclosure (opens in a new tab)
- CFPB: request and review multiple Loan Estimates (opens in a new tab)
- FEMA: flood insurance (opens in a new tab)
- HUD: housing counseling (opens in a new tab)
Educational content for learners ages 16 and older. Examples are fictional or hypothetical and may not reflect your circumstances. ILUVRE does not provide personalized financial, investment, legal, tax or mortgage advice. Rules, rates and programs change; check current details with official sources or a qualified professional.