Know the next step. Our comprehensive guides help first-time buyers navigate mortgages, compare Loan Estimates, and buy their first home without costly surprises.
First-Time Homebuyer Guides
Step-by-step checklists to help you shop lenders, avoid hidden fees, and lock your rate with confidence.
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How to Compare Mortgage Offers
Don’t just look at the interest rate. Check the Loan Estimate line items to spot inflated lender fees.
- ✓ Compare APR, not just nominal interest rates
- ✓ Review Section A (Origination Charges) closely
- ✓ Check lender credits and discount point trade-offs
- ✓ Calculate total 5-year carrying cost
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When to Lock Your Rate
Timing your rate lock can protect you from sudden volatility before your closing date arrives.
- ✓ Lock as soon as an purchase agreement is signed
- ✓ Choose 30, 45, or 60-day lock windows based on closing
- ✓ Ask for a float-down option if rates drop 0.25%+
- ✓ Get the lock agreement in writing from your loan officer
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How Much House Can You Afford?
Calculate your debt-to-income ratio (DTI) and monthly payment limits before starting home tours.
- ✓ Keep total housing costs under 28% of gross income
- ✓ Keep total monthly debts under 36%–43% DTI
- ✓ Budget 1%–2% of home value annually for maintenance
- ✓ Maintain 3–6 months emergency reserves after closing
Common Questions from First-Time Buyers
Straightforward, jargon-free answers to the most common mortgage questions buyers ask before submitting an application.
What credit score do I need to buy a house?
For a standard conventional mortgage, most lenders require a minimum credit score of 620. FHA loans are more flexible, accepting scores as low as 580 with a 3.5% down payment, or 500 with 10% down. VA and USDA loans don’t have strict statutory minimums, but most lenders look for 620+. If your score is 740 or higher, you qualify for the lowest interest rates and smallest loan-level pricing adjustments.
How much do I need for a down payment?
You do not need 20% down. Conventional loan programs for first-time buyers (like Fannie Mae HomeReady and Freddie Mac Home Possible) start at just 3% down. FHA loans require 3.5% down. VA loans for qualifying military service members and USDA loans for eligible rural locations require 0% down. Putting down less than 20% on conventional loans requires Private Mortgage Insurance (PMI), which adds roughly $30–$80 per month for every $100,000 borrowed.
Should I get pre-approved before house hunting?
Yes, without exception. A pre-approval involves a hard credit check and verified income documentation (W-2s, tax returns, paystubs, bank statements). Real estate agents and home sellers rarely consider offers without a current pre-approval letter attached. More importantly, pre-approval locks in your realistic purchase budget so you don’t fall in love with homes that exceed your monthly comfort level.
What’s the difference between fixed and adjustable rates?
A fixed-rate mortgage locks in your interest rate for the lifetime of the loan (15 or 30 years). Your principal and interest payment never changes, providing peace of mind. An adjustable-rate mortgage (ARM) offers a discounted promotional rate for an initial term (like 5 or 7 years), after which the rate resets annually according to benchmark indices. ARMs make sense if you plan to move or refinance within 5 years; fixed rates are safest for long-term stability.