First-Time Buyer Mortgage Checklist: What to Do First

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1. The Essential Mortgage Checklist for First-Time Buyers

2. Why Thousands of First-Time Buyers Choose Loan Factory

Buying a home for the first time is exciting—but also full of unknowns. You’re probably wondering:

How much can I afford?
What documents do I need?
Do I need 20% down?
What’s the best loan type for me?

This First Time Home Buyer Mortgage Checklist walks you through every step—so you can avoid delays, reduce stress, and feel confident walking into your first home loan conversation.

The Essential Mortgage Checklist for First-Time Buyers

First Time Home Buyer Checklist

1. Check Your Credit Score

Your credit score affects both approval and interest rate.

FHA loans: Accept scores as low as 500 (with 10% down) or 580 (with 3.5% down)
Conventional loans: Typically require 620+
Higher scores = lower rates
Tip: Get a free credit report at AnnualCreditReport.com, and dispute any errors you find.

2. Set Your Home Budget

Don’t just focus on the purchase price. Consider:

Monthly mortgage payment
Property taxes & homeowners insurance
HOA fees (if applicable)
Utilities, maintenance, and emergency repairs

Most lenders prefer a debt-to-income ratio (DTI) under 43%.

3. Start Saving for Down Payment & Closing Costs

You don’t need 20% down! Here are real first-time buyer options:

Loan Type	Minimum Down Payment
VA / USDA Loan	0%
FHA Loan	3.5% (580+) or 10% (500–579)
Conventional 97	3%
DPA Programs	May cover part or all

Add 2–5% of the home price for closing costs like title, appraisal, and insurance.

4. Understand Your Loan Options

Here’s a quick comparison:

Loan	Best For
FHA	Lower credit, smaller savings
Conventional	Good credit, cancelable PMI
VA	Military service members and veterans
USDA	Rural buyers with moderate income
DPA	Anyone who needs help with upfront costs

5. Gather Mortgage Documents Early

Lenders typically ask for:

Pay stubs (last 30 days)
W-2s or tax returns (2 years)
Bank statements (2 months)
ID and Social Security number
Proof of any gift funds or side income

If you’re self-employed: add business returns, P&L statements, and 1099s.

6. Get Pre-Approved (Not Just Pre-Qualified)

Pre-approval gives you:

A clearer budget
More negotiation power
Faster closing

You’ll submit your documents to a lender, and they’ll give you a pre-approval letter with an estimated loan amount and rate range.

7. Avoid Common Mistakes

Here’s what not to do while applying:

Don’t open new credit cards or loans
Don’t finance furniture or a car
Don’t change jobs (unless discussed with your lender)
Don’t deposit large amounts of cash without documentation

8. Ask About Local Assistance

Many states offer:

Down payment assistance (DPA)
First-time buyer grants
Special mortgage programs with reduced rates or fees

These vary by ZIP code and income level—don’t skip this step.

9. Find a Good Real Estate Agent

Look for an agent who:

Understands first-time buyers
Knows the local market
Can walk you through the offer, inspection, and closing process
Works well with your lender for faster communication

A great broker sets your financial foundation. A great agent helps you find the right home.

10. Prepare for Closing

Once your offer is accepted, you’ll:

Pay for an inspection and appraisal
Lock your interest rate
Review your Loan Estimate and Closing Disclosure
Sign final documents and get your keys

You’ve Got the Checklist — You now know what steps to take. But here’s the thing:

Even with this checklist, many first-time buyers still feel uncertain during the mortgage process—especially when trying to compare lenders, track rates, or find local grant programs. That’s where the right partner can make all the difference.

Why Thousands of First-Time Buyers Choose Loan Factory

Loan Factory is a modern mortgage platform built specifically for homebuyers who want:

No hidden fees (No application, processing, or junk fees)
Side-by-side lender comparison from over 240+ mortgage lenders
AI-powered application that recommends the best loan for your profile
Local support in 48 states with real licensed advisors
Automatic matching with DPA & grant programs in your area
Pre-approval in as fast as 24 hours

“At Loan Factory, we believe your first home shouldn’t come with confusion, surprise fees, or regret. We built a transparent, tech-powered system to help you buy smarter—no guesswork, no pressure.”
— Thuan Nguyen, CEO & America’s #1 Loan Officer