First-Time Homebuyer
Navigating the homebuying process for the first time can feel overwhelming. We’re here to guide you through each step, offering personalized mortgage solutions that make homeownership within reach.
Understanding the mortgage process
Buying your first home is a major milestone, and we’re here to guide you through every step of the mortgage process. From the initial application to closing, our goal is to make the journey as smooth and straightforward as possible. Here’s how it works:
Application
Start by filling out a simple application. We’ll review your financial information to understand your unique situation.
Pre-Approval
This step gives you a better idea of how much home you can afford. It shows sellers you’re serious and financially prepared.
House Hunting
With pre-approval in hand, you’re ready to start looking for your dream home.
Loan Processing & Underwriting
Once you’ve found a home and made an offer, we’ll verify all your information and prepare your loan for final approval.
Closing
This is the final step where you’ll sign the paperwork and officially become a homeowner!
Pre-qualification vs. pre-approval: What’s the difference?
Knowing how much you can afford is an important first step in your homebuying journey. But should you get prequalified or preapproved? Here’s a quick breakdown:
Prequalification is a preliminary step where you provide basic financial information to get an estimate of how much you might be able to borrow. It’s a helpful way to understand your budget range.
Preapproval, on the other hand, is a more in-depth process where a lender reviews your credit history and verifies your financial information. It carries more weight when making an offer, showing sellers you’re serious and ready to buy.
Down payment assistance programs: Helping you get a head start
Saving for a down payment can be a challenge, especially for first-time homebuyers. That’s where Down Payment Assistance Programs come in. These programs are designed to help bridge the gap, making homeownership more accessible.
Whether you’re eligible for grants, loans, or tax credits, our team will help you explore your options and find the right program for your needs. With the right support, owning your first home might be closer than you think.
Find out more about available programs and eligibility criteria here.
First-time homebuyer FAQs
Buying a house for the first time starts with gaining a solid understanding of the process. Transitioning from renting to owning is achievable with the help of experienced and professional partners. First-time homebuyers should begin should connect with a loan officer early in process to discuss their income, assets and home buying goals. For first-time home buyers, getting pre-approved is a recommended first step in the home buying process. By providing personal and financial details during pre-approval, buyers can gain a clear understanding of how much they can afford. This allows them to focus on homes within their budget, making their search more efficient and informed.
There are several common first-time home buyer programs that offer financial assistance and favorable terms to help make homeownership more accessible. Here are some widely available options:
- FHA Loans (Federal Housing Administration): Backed by the government, FHA loans are designed for buyers with lower credit scores and smaller down payments
- Benefits:
- As little as 3.5% down payment
- Lower credit score requirements (often starting around 580)
- More lenient debt-to-income ratio guidelines
- Benefits:
- VA Loans (Veterans Affairs): VA loans are available to eligible veterans, active-duty service members, and some members of the National Guard and Reserves.
- Benefits:
- No down payment required
- No private mortgage insurance (PMI)
- Competitive interest rates
- Lenient credit requirements
- Benefits:
- USDA Loans (United States Department of Agriculture): Designed for rural and suburban home buyers, USDA loans provide 100% financing for eligible buyers in designated rural areas
- Benefits:
- No down payment required
- Low mortgage insurance premiums
- Competitive interest rates
- Benefits:
- Conventional 97 Loan Program : This program allows buyers to make a down payment as low as 3% on a conventional loan, typically for those with higher credit scores.
- Benefits:
- Low down payment
- More flexibility in property types
- No upfront mortgage insurance premiums (unlike FHA loans)
- Benefits:
- HomeReady and Home Possible Loans : Offered by Fannie Mae (HomeReady) and Freddie Mac (Home Possible), these programs are geared toward low- and moderate-income buyers.
- Benefits:
- Down payments as low as 3%
- Reduced mortgage insurance costs
- Flexibility in income sources (including rental or boarder income)
- Benefits:
- State and Local First-Time Buyer Programs : Many states, cities, and local governments offer down payment assistance, low-interest loans, and other incentives for first-time home buyers.
- Benefits:
- Grants, forgivable loans, or deferred-payment loans to help with down payments and closing costs.
- Specific eligibility requirements, often based on income, location, or profession.
- Benefits:
Before starting the home buying and mortgage application process, first time home buyers should keep in mind these helpful tips. First, check your credit score, improving your credit score before applying for a mortgage can help you to qualify for a lower interest rate and could help you increase overall affordability. Next, consider fixed-rate and adjustable-rate loans and compare different terms based on your financial goals. Third, obtain a pre-approval from a licensed loan originator before house hunting; this can make sellers see you as a more attractive buyer. Lastly, once your mortgage application is submitted, avoid buying furniture on credit or using credit cards to make other large purchases; this could negatively affect your credit score which could jeopardize your loan in its final stages.
Qualifying factors for first time home buyers will vary based on the mortgage program and lender they choose. Usually at minimum, first time home buyers need to provide proof of reliable income. In addition, depending on the loan program, first time home buyers should also have at least a fair or good FICO score typically 580 or higher and a debt-to-income (DTI) ratio that conforms to certain mortgage underwriting guidelines. An experienced loan officer can help you learn your DTI. Although there are low and no-down payment options for many first-time home buyer mortgage programs, first time buyers should prepare to save some funds toward a down payment, closing costs, taxes and moving costs.
There are many down payment options available for first time home buyers. First time home buyers are not required to make a 20% down payment on a home, unless they choose to do so. In fact, many homeowners are approved for mortgages with down payments below 10%. There are many first-time home buyer mortgage programs that offer a minimum down payment as low as 3.5%. There are also low and no down payment mortgage loan options available for first time home buyers. Some of the loan programs that offer these attractive down payment requirements are FHA loans, USDA loan, VA loans and specific conventional loan programs from Fannie Mae and Freddie Mac.
Additional Resources
Buyer’s Market or Seller’s Market? 10 Key Indicators Every Agent Should Track
Beyond the List Price: Understanding the True Cost of Homeownership
