Starting your journey as a first time home buyer can be intimidating, especially if you’re new to the process or not sure where to start. Working with a mortgage expert will ensure you understand the process and feel confident every step of the way. Here are some tips for first time home buyers to help ease your mind! 

1. Review your monthly expenses and budget a comfortable mortgage payment

Becoming a first time home buyer can seem daunting. It’s important to understand how much money you will have available each month after paying your mortgage and other fixed expenses. This will help you understand how much you can set aside each month for savings or emergency funds. Check out our FREE mortgage calculators!

2. Maintain or improve your credit report

Minimize outstanding debt by keeping low balances, particularly on credit cards. Apply for a new credit account only as needed. Don’t fall into a credit card trap by opening high interest rate cards for one-time discounts. Learn what exactly a credit score is and what credit score you need for different types of loans.  

3. Prioritize your wants and needs in a home

Visualize your ideal home. How many bedrooms and bathrooms do you need? Are you looking for a home with a backyard? Determine what can and can’t be scarified in your home search before viewing any properties. Read more about what to prioritize when purchasing a home.  

4. Know your loan options 

If funds for a down payment is a concern, then there are a variety of loans that offer little to no down payment. 

  • FHA Loan are governed by the Housing of Urban Development (HUB), an FHA loan offers flexible guidelines for borrowers with limited down payment funds, and an imperfect credit history. 
  • USDA loans are government insured for purchasing within a designated rural area. Designed for low-to-moderate income borrowers, a USDA loan offers flexible guidelines and no down payment. 
  • Fannie Mae HomeReady Loans are designed for the creditworthy, low-to-moderate income borrower, with limited down payment funds, HomeReady and Home Possible provide home financing options with up to 97% financing, or a down payment as low as 3%. 

5. Organize your documents for a smooth mortgage application

Review the documents that are needed ahead of time so you can set yourself up for success.  

  • Past 30 Days of Paystubs 
  • Past 2 Months of Bank Statements 
  • Copy of your Driver’s License 
  • Approval to Pull Credit 
  • Past 2 Years of W2s 
  • Past 2 Years of Tax Returns 

6. Get pre-approved before you start house hunting

Getting pre-approved BEFORE you begin your home search is a crucial step in the home-buying process. Your pre-approval letter provides clarity on your budget and is based on a credit check, job history, finances, and tax information. Start the pre-approval process today using our app!

7. Don’t make any large purchases or credit pulls before closing

It’s important to wait until closing before making any big purchases. If you have any questions about how a large purchase may affect your closing process, then contact your loan officer.  

8. Don’t change employment while under contract

Sometimes this might be out of our hands, be sure to communicate with your lender before making any career changes during the home-buying process.  

9. Find a trustworthy Real Estate Agent

Find a reliable real estate agent. Need a recommendation? Our loan officers have an extensive network of realtors that will help you find your dream home. Learn more about the experts involved in the home buying process.  

10. Budget for Closing Costs & Additional Fees

Make sure you set aside funds for additional fees and closing costs. Closing costs consist of third-party fees incurred during the mortgage process, which will be itemized on your Loan Estimate and Closing Disclosure. Learn more about closing costs and the different ways to pay for them!

11. Don’t skip the home inspection

Although a home inspection is not required to purchase a home, it’s highly recommended, as it can reveal unforeseen problems that could end up costing you thousands in repairs.  

12. Communication is key to a smooth process

Please reply to emails and phone calls as soon as possible. If you have any questions or hesitations at any point, then be sure to discuss them with your loan officer, and they will be happy to assist you.  

First Time Home Buyers FAQs

What’s your best advice for first time home buyers?

Starting your journey as a first time home buyer can seem intimidating. The best advice: find a lender you know, like, and trust to guide you through the process. A good lender will be upfront about the process, will have a variety of first time home buyer programs, and will be able to answer your questions.

How to know the lender is someone you can trust:


Reputation is important when selecting a lender for your first home buying process. Review their online presence and reputation – individually and as a company. Does it seem that there is an overall positive outlook on their services? If so, you may have found a lender you can trust.

Don’t forget to review social media channels to review the credibility of the lender you are considering. Social media will give you a good idea on whether they are up to speed with the market, and the outlook on the services they offer.


As a first time home buyer, you’ll want to work with a lender who has been in the industry for some time. You’ll want to look for someone who knows the ins and outs of loan programs so you can feel confident about the solutions presented to you.

Program Solutions

As a first time home buyer, you’ll want to ensure the lender you choose to work with has an array of mortgage solutions that are flexible with first time home buyer scenarios (i.e. low down payment programs, down payment assistance, student loan forgiveness, etc.). Every borrower’s financial situation is unique, so it’s important that your lender have unique mortgage solutions.

What are the first things to do when you buy a new house?

Plan Renovations In Advance

If the place needs work, then don’t wait until you’ve closed to engage a professional. Shop around for quotes and make sure that the projects will all be within your planned budget.

Set Up Utilities

The best plan is to call the utility companies and get service set up well before you close on your home. This also includes making sure you have your cable, wi-fi and landlines set-up to be active the day of move-in.

Change the Locks and Secure Your Home

The first person you should call after getting the keys is a locksmith, assume that everyone has a key to your new home. If you want to do it yourself, then head over to your local hardware store and pick out a nice pair of doorknobs and locks. They are simple to install, most come with instructions and hardware inside their packages.

Hire a Cleaning Crew

Assume the worst and get a professional cleaning crew in there the minute after closing, even if the seller did clean. If you can’t get a crew out at the time you need, make sure you set aside some cleaning products and paper towels!

Have a Handyman On Call

While it may seem like a luxury, investing a few hundred dollars in hiring someone to help with these tasks will save time and worries. If you can make your own repairs, then make sure that when you’re packing that you set aside your tools to be easily accessible through all the unboxing havoc.

What is the first thing to do before buying a house?

There are many steps in the mortgage process which leaves many first time home buyers unsure where to begin. We recommend educating yourself to expand your knowledge of the overall process so you can build your home buying confidence. Enroll in our free Home Buying Courses to dive in and take the first step in your homeownership journey!

What are 5 things to know before buying a house?

1. How Much House Can You Afford

Buying a home is a huge decision. While the process is exciting, it’s crucial to be aware of the realities of home buying. Sure, a home’s new kitchen and master bathroom might be gorgeous, but if you can’t pay the mortgage each month, then you’re setting yourself up for financial headaches. You want to hunt for homes that are in your qualified price range. Determine how much you can afford with Direct Mortgage Loans Home Affordability Calculator, on our app, to get an estimate of how much you can afford based on your financial portfolio.

2. Difference Between Pre-Qualification and Pre-Approval

Pre-qualification and pre-approval are both important and smart homebuying moves. However, these are two different terms. A pre-qualification is an educated estimate of what you may be approved for when financing a home. A pre-approval is the verified, official estimate of the amount you are approved for borrowing. It’s important to get pre-approved prior to house hunting as this will give you a better chance of getting the home you want.

3. The Type of Home and Location

Before you start house hunting, create a Home Buying Checklist to determine which features are most important to you. Consider the type of home that would best suit your needs and conduct research on the location you’re looking to purchase a home in. Here are some factors to consider:

  • Accessibility: How close is the house to your work, school or shopping centers?
  • School Districts: Conduct research on local school districts. Selecting a home in a high-scoring school district could mean more value to your home when it’s time to sell.
  • Reputation: Read reviews on the neighborhood and community.

4. You Do not Need 20% Down to Purchase a Home

One of the biggest struggles a first time home buyer faces is saving for the down payment. You might have heard that “you need 20% down to purchase a home” – this is a common misconception. Many mortgage programs now allow home buyers to put as little as 3% down, and in some cases, 0% down. In addition, there are Down Payment Assistance (DPA) Programs to help finance the down payment funds!

5. What to Expect On Closing Day

Closing is the day you officially become the legal owner of the home. On this day, you’ll bring the closing day documents and sign your name… a lot! Expect to be at the settlement table for 45 minutes to 1 hour. Your closing will most likely take place at the office of your title company. Generally, you will attend closing with your agent, title company representative/attorney, the seller and the seller’s agent. If the seller(s) pre-signed the deed and transfer documents, then they most likely will not attend.

What should you avoid when buying a new house?

Do Not Miss Loan Payments

Before finalizing your mortgage, your credit will be reassessed. If you have missed any loan payments since going under contract, your credit will decrease which could result in terminating the loan. Remember, just because a lender issues your loan commitment does not mean everything is finalized.

Avoid Consolidating Your Debt

Debt consolidation can be tempting. Some debt consolidators may allow you to bring all your debt into one place. However, the hidden fees and interest rates that may increase exponentially may not improve your credit as expected. It’s best to avoid this decision during your home buying process.

Do Not Buy a Car

Your loan pre-approval is based on your credit score and current debt ratio. Buying a car will change both factors; this could make you unable to get your home loan.

Do Not Change Banks

Again, this is one that many people do not think will make a difference in their loan process. Your banking status and history are a part of the equation in getting you pre-approved for a loan. If this changes, you may not get your official approval.

Whether you’re new to the process or unsure where to start, our loan officers will be available to guide you through the process step-by-step. Start your homeownership journey today by accessing our Home Buyer Guide!

Connect With A Loan Officer To Learn More