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Buying Your First Home? Here’s What You Need to Know.

Buying Your First Home? Here’s What You Need to Know.

A smiling couple embraces while holding out a key to their new home

From the thrill of house-hunting to the joy of unlocking the door to your very own home, buying your first property is an exciting milestone. However, navigating the home-buying process can be complex, especially for first-time buyers. To help you avoid financial frustration and unnecessary roadblocks, here is a comprehensive guide to buying your first home with a first-time homeowner loan and how Landmark National Bank can help. We’ll cover everything from assessing affordability to closing the deal, including tips on inspections, escrow, and timeline expectations.

Make Sure You Can Afford a Home

Before you start scrolling through Zillow or setting up showings at your dream properties, make sure you can afford the unexpected costs associated with a home. While the idea of owning your own property is often more appealing than renting, it comes with a variety of extra expenses that rentership typically covers, such as utilities and home repairs. So, to ensure you have enough to cover homeownership, you should:

  • Calculate your total earnings after taxes
  • Evaluate your total debt, including car loans, student loans, and credit cards
  • Determine your average monthly expenses, such as groceries, gas, and bills
  • Set a savings goal for each month

Once all these expenses are calculated, you’ll be in a better position to tailor your budget to include a mortgage payment. While your current budget may be able to cover the cost of renting, it’s crucial to calculate how your current financial situation will cover owning a home. Typically, it is best to keep the combined cost of your mortgage, taxes, and insurance between 25 and 30 percent of your income.

Prepare a Down Payment

A smiling couple greets a professional-looking woman while sitting on a couch

By having a down payment ready to go before you start house hunting, you can lower your monthly principal and reduce the amount you owe on the home. Typically, home purchasers believe they are required to come to the table with 20% of the property’s value, but there are many first-time homebuyer programs that reduce the down payment cost. In fact, many first-time buyers can qualify with as little as 3% down. In addition, veterans applying for a Veterans Affairs (VA) loan or first-time buyers applying for a Rural Development (RD) loan can qualify for a mortgage with no down payment.

Choose the Right Mortgage Loan Type

Two men negotiating over a table that holds a calculator, notebook, and a small model house

Most of the time, you will need a loan to purchase a home. In fact, getting pre-qualified for a mortgage loan is a key part of deciding if you are ready to buy a home. Your pre-qualification can help ballpark your house-shopping budget.

Mortgage Loan Types

Before choosing a mortgage, it is crucial to understand the differences between a fixed-rate mortgage and an adjustable-rate mortgage. Discover the following pros and cons of each mortgage type:


  • Fixed-rate Mortgage: Offers a set interest rate that remains unchanged over the loan term.
    • Pros: Borrower is protected from spikes in mortgage payments, easy to understand, does not vary from lender to lender
    • Cons: Difficult to qualify for when interest rates are high
  • Adjustable-rate mortgage: Features an interest rate that fluctuates throughout the loan term.
    • Pros: Cheaper than a fixed-rate mortgage, often easier to apply for a larger loan
    • Cons: More complicated than fixed-rate, monthly payments can change frequently

Choose a Realtor

To navigate the home-buying process effectively, it is advisable to work with a reputable realtor. A skilled realtor will understand your needs and budget while guiding you toward homes that are both desirable and affordable. They can also assist with contract negotiations and paperwork, ensuring a smoother experience.

Get Your New Home Inspected

Once you’ve found a potential home, scheduling a thorough inspection is crucial. While it incurs a cost, a home inspection can uncover hidden issues such as termites, mold, or foundation problems. By identifying these issues early on, you can renegotiate the asking price or make an informed decision about the property.

Avoid Major Life Changes During Escrow

After your offer for your new home is accepted, there is a stage called “escrow.”You might be wondering, “What is an escrow on a mortgage?” When you’re buying a house, the escrow process typically begins after your offer has been accepted and you’ve entered into a purchase agreement with the seller. An escrow is a period where your funds, documents, and assets are temporarily held until all conditions of the sale are met. During this period before closing on your house, your lender will examine your documents, finances, and other information to see that all are in order. To help your escrow period run smoothly, remember the following:

  • Do not buy or lease a car
  • Do not buy furniture on store credit
  • Do not change jobs
  • Do not change your marital status

Prepare For Your Move After Closing

When it is time to close on your home, you will sign your final papers and complete the sale. If you’re currently renting, try to close on your new home with time to spare before your lease is up. That way, you’ll have plenty of time to pack up and prepare for your big move. Plus, that way you’ll have time to make any necessary repairs to your new home if anything comes up during inspection.

Before you move into your new home, be sure to change your address with your bank, utility providers, and other important parties. Taking care of your address change quickly can help you avoid missing important mail or bills.

Packed moving boxes on the floor in front of a couch

First Time Homeowner Loan FAQS

How do I get a mortgage?

Some of the steps you should take to get a mortgage include:

  • Checking your credit score: a good credit score improves your chances of qualifying for a mortgage.
  • Determining a budget: assess your finances and determine how much you can afford to spend on a home.
  • Researching loan options: shop around and research different lenders to find the one that suits your needs.
  • Getting pre-qualified for a mortgage: this involves submitting your financial information to a lender, who will then assess your credit and determine the loan amount you qualify for.
  • Gather documentation: this typically includes proof of income (pay stubs, W-2s, or tax returns), bank statements, employment verification, and identification documents.
  • Completing the mortgage application: fill out the mortgage application provided by your chosen lender.
  • Closing: If your mortgage application is approved, you’ll move on to the closing stage where you will sign the final loan documents.

How do I get pre-qualified for a mortgage?

Getting pre-qualified for a mortgage is an important step in the home buying process as it gives you an idea of how much you can afford and demonstrates to sellers that you’re a serious buyer. You’ll want to provide your financial documents, research lenders, apply to a lender, and provide the required information. It’s important to note that pre-qualification is not a guarantee of a loan. It is a preliminary assessment based on the information provided.

How long does it take to get a mortgage?

The timeline for getting a mortgage can vary depending on several factors, including the lender’s processes, your financial situation, and the complexity of the loan. Typically you can expect it to take anywhere from 30-60 days or more.

Purchase Your First Home with Help from Landmark

If you’re not sure where to start when it comes to choosing a mortgage, Landmark National Bank offers a wide variety of home loan services, including:

When you are ready to buy your first home, we are here for you. Our team of home loan specialists is available and happy to help you find the mortgage solution that is right for you. Take the first step toward your first home and find a Landmark National Bank branch near you today. Looking for a home in Kansas? Learn more about how you can secure your home in Kansas.