Mortgage Guide for First-Time Homebuyers

As a first-time homebuyer, there are many loan types and down payment assistance programs to help you purchase your first home. Tracie Schmidt is a Five Star Mortgage Professional award winner with more than 27 years of experience in the home loan industry. Tracie Schmidt is licensed in California, Florida and Washington. Through Barrett Financial Group, our team can help homebuyers and homeowners in every state except New York — reach out and we’ll connect you with the right loan officer.

1. Talk to a mortgage professional early

The best first step is talking with a mortgage professional who can help you choose a loan you can comfortably afford and realistically qualify for. It’s also important to know which programs you’re eligible for. If you want a payment that never changes, a fixed-rate mortgage is worth considering. If you need a lower initial payment for a set period, an adjustable-rate mortgage may be an option.

Don’t wait until you’ve found the perfect house — we’d much rather talk with you six months before you’re ready than six days before you want to write an offer.

2. Know your credit scores in advance

Most lenders use FICO® scores to help evaluate how likely a borrower is to repay on time. Check your credit early so you have time to improve your scores or correct any errors. In the months before you buy, pay every bill on time and avoid opening new accounts. Many conventional loans require a minimum score around 620, while FHA and VA programs can offer more flexibility.

3. Get pre-qualified

Pre-qualifying means sharing your documents — such as W-2s, pay stubs, bank statements and possibly tax returns — with a licensed loan officer, along with a credit check. That in-depth review tells you what you can afford, and it shows sellers you’re a serious buyer in a competitive market. Get pre-qualified online.

4. Learn what loan programs are available to you

Many first-time buyer programs get overlooked. Depending on your situation, you may qualify for:

• Conventional (Fannie Mae / Freddie Mac): as little as 3% down for qualified buyers. Loan limits apply.
• FHA: a strong option if your credit score is below 620 or you need a lower down payment.
• VA: $0 down options and no monthly mortgage insurance for eligible veterans and service members.
• USDA: 100% financing for eligible properties in qualifying rural areas.
• State and local first-time buyer programs: down payment and closing cost assistance varies by state and program.
• Renovation loans: buy a home and remodel it with a single loan.
• Good Neighbor Next Door: HUD listing-price discounts for eligible law enforcement officers, teachers, firefighters and EMTs.

Contact The Schmidt Team to find out which of these programs you may be eligible for.

5. Decide on a down payment that fits

Many loans allow down payments as low as 3%. Putting 20% down on a conventional loan means no mortgage insurance, but it isn’t required to buy a home. Savings and certain other assets may be used toward your down payment, and gift funds are allowed on many programs. Use our free mortgage calculators to see how different down payments change your monthly payment.

6. Plan for closing costs

Beyond the down payment, budget for closing costs, moving expenses and any repairs or updates. Your loan officer will give you a Loan Estimate that itemizes expected costs, which may include:

Tip: sellers can often contribute toward a buyer’s closing costs or an interest rate buydown. The key is structuring your offer the right way — ask us how.

The bottom line

Buying a home involves a lot of terminology, paperwork and people. Working with an experienced mortgage professional makes the process smoother and helps you avoid surprises. Contact The Schmidt Team, powered by Barrett Financial Group, with any questions and start your journey to homeownership.

Get Pre-Qualified   Book a Consultation