NMLS ID
#71107
Have Any Questions?
770-744-1811
Looking for Commercial Loan or Non-QM Financing — No W-2 Required. Give Capital Funding and Mortgage a call and find the right program for you.
Looking for Commercial Loan or Non-QM Financing — No W-2 Required. Give Capital Funding and Mortgage a call and find the right program for you.
#71107
770-744-1811
The lure of first-time homeownership is powerful. Your focus could be building generational wealth or creating an investment to sell when you retire.
Whatever your reasons for buying a house, you may be quite a few steps from the moment you can kick back and enjoy your home purchase. Here’s our best advice for first-time home buyers looking to embark on the journey to homeownership.
The No. 1 tip that we can offer first-time home buyers is to be sure you’re ready. The average mortgage loan term is 15 – 30 years. Although you don’t need to stay in your home for that long, buying a house is still a major commitment. Be 100% sure that you’re ready for homeownership before taking on a mortgage.
Start by asking yourself these questions:
If the answer to any of these questions is “no,” you may want to hold off on a home purchase for now. Keep saving. Keep researching.
Consider whether you have any events on the horizon that could affect your location, income or expenses. If so, these are other reasons to pump the brakes.
It can be tempting to jump right into hunting for the perfect house, particularly if this is your first time – and especially if you’re in a rush to move out of your parents’ house. However, it’s a really good idea to get a mortgage preapproval before you begin comparing properties.
Knowing how prequalification differs from preapproval is also important. Let’s review that difference now.
Some of the benefits of getting preapproved include:
The bottom line? Request a preapproval before you start shopping for a home. Read on to learn why a preapproval may not reflect the final loan offer.
Now is not the time to open a new line of credit, like a credit card or a personal loan. When you apply for mortgage preapproval, lenders will pull your credit report. They’ll do it again before you close on the house and its corresponding mortgage.
If they find that you’ve taken out another loan or line of credit, that your credit balance has increased, or that you’ve started to make late payments, it could risk your final approval.
Be sure to keep paying your bills on time. Don’t attempt to influence your credit rating for better or worse or begin any risky spending. Lenders want to see that your behavior patterns are consistent and reliable for future payments.
One of the most important priorities of the Federal Housing Administration (FHA) is helping home buyers with the purchase of their first home, and this includes assisting borrowers with their down payment. If you qualify as a first-time home buyer, you may have access to state programs, tax breaks and an FHA loan.
According to the U.S. Department of Housing and Urban Development (HUD) website, a first-time home buyer is anyone who meets the following criteria:
If you qualify as a first-time home buyer, you can benefit from several assistance programs, including down payment assistance loans and grants.
We’ll get into minimum requirements below, but the upside of saving at least 20% on a down payment is that you can avoid private mortgage insurance (PMI) on conventional loans.
Did you know that you can decide between multiple types of mortgage loans? The type of loan you choose will determine your down payment amount, the type of home you can buy and more. Here are some of the more familiar types:
Each type of loan has qualification standards that you must meet. For example, VA loans carry military service requirements. Make sure you meet these standards before applying.
Once you have a goal in mind, you can begin to set up automatic payments to your savings account, making it easier to predict when you can make your move.
Don’t assume that your down payment is all that you’ll need to close on your mortgage loan. You’ll also need to cover closing costs before you take control of your property.
Closing costs are upfront expenses that go to your lender in exchange for arranging certain loan services. Some common closing costs you might see are:
You’ll see your exact closing costs on a document called a Closing Disclosure. Generally, you can expect to pay 2 – 5% of your total loan amount in closing costs.
As a first-time buyer, you may qualify for government-backed grants or loans that assist with closing costs. Additionally, it’s fairly common to ask the seller to help cover closing costs. Seller concessions could be a flat percentage of the total closing costs, or they could cover specific fees, like appraisal or attorney fees.
Your reason for buying a home will be your north star for making decisions about your purchase. If your goal is to dip your toe into real estate investment, a duplex may be the perfect option for you.
If you’ve decided to move closer to older parents or a support system as you start a family, consider a condo or townhouse that will require less upkeep.
Once you’ve decided on the type of home that’s right for you, you can begin to prioritize which features you want in your home based on your needs.
For example, you might focus on finding a home with extra bedrooms if you plan to have children or need a home office. If pets are the light of your life, a big yard or a location near plenty of green spaces may be nonnegotiable.
Sit down and create a list of qualities you want and need in your new home. This will help you shop for homes more effectively and be less stressed when you compare properties.
Work with a real estate agent or REALTOR® to find the perfect property. Agents and REALTORS® are local professionals who are experts in the home-buying process and your local market.
A real estate professional can help by:
Remember that only a buyer’s agent will work on your behalf. Don’t rely on the seller’s agent to represent your best interests. Always choose a qualified REALTOR® or real estate agent to help you buy a home.
You should never submit an offer on a home unless you’re 100% committed to the purchase – or you could risk losing your earnest money deposit, also known as a “good faith deposit.” Giving this money signals to the owner that you’re serious about the offer.
The deposit is typically equal to 1 – 3% of your total home price and goes toward your down payment. If you back out of the sale for a reason not listed in your offer letter, you’ll lose your earnest money deposit.
You need to hire a professional inspector before getting a home. An inspection is different from the appraisal required by your lender. Here’s how:
An earnest money deposit letter often includes a home inspection contingency, which would allow you to invalidate an offer and not lose your deposit if extensive repairs are needed.
It’s likely that your desire to purchase a home is driven by emotion. You might want to feel secure, the freedom to express yourself through your home or have a vision for your desired lifestyle.
Many first-time home buyers get emotionally invested in a house. This can backfire if they can’t get the loan for the house or they don’t have the funds to address major property issues that the inspection revealed.
Don’t go over your budget for a house, even if the house seems perfect for you. Be sure to budget in enough money for repairs and renovations. The right home is out there for you, so keep searching until you find a home that fits your budget and satisfies your list of must-haves.
Once you get moving on a house purchase, don’t forget about the paperwork. Yes, cloud-based storage is the obvious choice for keeping tabs on documents, but you should keep a physical copy of your mortgage statements, deed, Closing Disclosure and other documents in a locked, fireproof file cabinet.
Let anyone else named on your loan know where the documents are and how to access them in the event of an emergency.
Investing in homeownership education can help you avoid making costly mistakes, prioritize smart investments that offer reliable ROIs, and build sweat equity in your first home.
Not sure where to start? Consider taking a first-time home-buyers class, which can help you:
Both in-person and online real estate courses are available. Some programs even offer financial perks, such as low down payments and closing-cost assistance.
Buying a home for the first time doesn’t have to be overwhelming. Wherever you land, it’s you and your loved ones who bring a home to life. Maintain your financial health so that your quality of life increases with the purchase, rather than decreases.
If you’re a first-time home buyer, explore your options with the experts at Rocket Mortgage. We’re here to help you every step of the way!
Capital Funding and Mortgage Group
Capital Funding and Mortgage is not acting on behalf of or at the direction of HUD/FHA Or the Federal Government
Disclaimer: We specialize in Non-QM loans for real estate investors and commercial loan financing. This is not an offer to lend. All loans subject to qualification and approval.
Copyright 2026 Capital Funding and Mortgage. All Rights Reserved.