How do I financially prepare to buy my first home?

Steps to prepare: save for a down payment (ideally 20% to avoid private mortgage insurance), build a credit score of 740+ for the best rates, reduce your debt-to-income (DTI) ratio below 36%, save an additional 2–5% for closing costs, and maintain steady employment. Get pre-approved by a lender before home shopping. Do not make large purchases or change jobs during the mortgage application process.