First-Time Homebuyer?
Your first home is closer than you think. We're here to show you exactly how to get there.
First-time homebuyers have questions. We answer most of them here.
Who Qualifies as a First-Time Homebuyer?
Most people assume first-time homebuyer programs are only for people who have never owned a home. That’s true, but there are exceptions. For example, you may qualify if you:
- Have not owned a primary home in the last three years
- Previously co-owned a home with a former spouse
Still not sure? Your Atlantic Bay mortgage banker can confirm your eligibility in moments, and tell you exactly which programs you'd be eligible for.
Basic mortgage loan qualification criteria.
These are general guidelines, not hard walls. Every situation is different, and there are programs designed for buyers who don't check every box perfectly.
| Credit Score | Down Payment | Debt-To-Income Ratio (DTI) | Employment |
|---|---|---|---|
580 - 740+ Here’s how to check your credit score | 3% - 20% See down payment required by loan type | 43-50% Learn how DTI is calculated | 2 years Read about loans for self employed borrowers |
Let's review some first-time homebuyer loan programs.
Your mortgage banker will take several factors into consideration to determine the right fit. This takes into account credit score, your down payment, where you're buying, and whether you've served in the military. Here's a plain-language look at your four main options.
As little as 3% down • 620+ credit
Understanding Conventional Loans
Private Mortgage Insurance is required with less than 20% down (typically removable later)
Best if: You have strong credit and want the flexibility to remove mortgage insurance once you build enough equity.3.5% down • 580+ credit • government-backed
Learn About FHA Loans
Requires mortgage insurance premiums (MIP)
Best if: Your credit score or down payment savings are limited. Mortgage insurance is required.0% down • no PMI • eligible veterans, active-duty service members, and certain surviving spouses
VA Mortgage Loans Explained
Best if: You've earned VA eligibility and want to maximize buying power with minimal upfront costs.0% down • income & location limits apply
More About USDA Loans
Best if: You're buying in an eligible rural or suburban area and qualify based on income.
Talk to an Atlantic Bay mortgage banker. There’s no commitment, no pressure, just real answers.
Understanding mortgage insurance.
Mortgage insurance is paid by the borrower but protects the lender if the loan defaults.
Different loan programs have different types of mortgage insurance, eligibility requirements, and costs, so it's important to understand how each option works before choosing a loan.
| Loan Type | Monthly Mortgage Insurance | Notes |
|---|---|---|
Conventional | Yes, with less than 20% down. | Private Mortgage Insurance (PMI) can typically be removed once you reach sufficient equity. |
FHA | Yes. | FHA loans require Mortgage Insurance Premiums (MIP), which include an upfront fee and an annual premium. |
VA | No. | VA loans do not require PMI or MIP, though many borrowers pay a one-time VA funding fee (with some exemptions). |
USDA | Yes. | USDA loans don't use PMI, but they do require an upfront guarantee fee and an annual fee that functions similarly to mortgage insurance. |
Worried About the Down Payment? There are programs to help.
Saving for a down payment feels like the biggest hurdle to homeownership. But what surprises many first-time homebuyers is that there are thousands of down payment assistance programs available nationwide, and you may qualify for more than one.
Depending on where you live and your financial situation, assistance may be available through federal, state, local, nonprofit, employer, or housing finance agency programs. Some funds never have to be repaid, while others offer flexible repayment terms or forgiveness after a set period.
Understanding the mortgage process.
The homebuying process has more steps and can require more documentation gathering than most people expect. But it follows a predictable sequence, and every step has a clear purpose. Here's a high-level overview of the mortgage process from start to finish.
Knowing your credit score before buying a home helps you understand your loan options, estimate your monthly payment, and identify opportunities to qualify for better rates and lower borrowing costs.
How to check your credit scoreHow debt-to-income ratios impact buying powerBefore touring homes, get pre-approved. You'll know exactly what you can afford and be ready to act quickly when you find the right home. Sellers are often more confident accepting offers from pre-approved buyers. Pre-qualification vs. pre-approval vs. conditional approval, explained.
The pre-approval processFind a home and make an offer. Once your offer is accepted, your lender can move forward with your mortgage application using the agreed-upon purchase price and terms. Here's what happens after you make an offer.
How to select a real estate agentYour lender verifies your income, assets, employment, and credit while ordering the appraisal and preparing your file for underwriting. Responding quickly to document requests can help avoid delays.
Getting ready for underwriting: A checklistYour lender has approved your loan and all conditions have been satisfied. You'll receive your Closing Disclosure at least three business days before closing. Review it carefully and ask questions if anything is unclear.
What to expect on closing dayYou'll sign the final paperwork, pay your closing costs and any remaining down payment, and walk out a homeowner. The whole closing typically takes about an hour.
Make sure to plan for more than just the down payment.
The down payment is only part of the upfront cost of buying a home. Here's what to budget for before closing so there are no surprises.
Down payment | Typically 3%–20% of the purchase price (depending on the loan program) |
Closing costs | Typically 2%–5% of the purchase price. (Not loan amount.) |
Home inspection | $300–$700 (typical) |
Appraisal | $400–$700 (typical) |
Earnest money deposit | Often 1%–3% of the purchase price and typically applied toward your down payment or closing costs at closing. |
Whenever you're ready, we're ready.
Buying your first home feels significant because it is. What it shouldn't feel like is confusing, overwhelming, or something you have to figure out on your own.
Atlantic Bay Mortgage Bankers live in the same communities as our clients. We're not a call center. We don’t think of our clients as transactions.
We’re committed to helping you make the best decision, whether that means telling you to wait a few months, exploring a loan program you hadn't heard of, or reviewing your budget before you start looking at homes.
It starts with a conversation. There's no cost, no commitment, no pressure.
Start the conversation today. Real answers from a local expert, whenever you're ready.
Still have questions? Here are the ones we hear most frequently.
If your questions aren’t answered here, please reach out to an Atlantic Bay Mortgage Banker.
It depends on the loan. Conventional loans typically require a 620 or higher. FHA loans can go as low as 580 with 3.5% down, or 500 with 10% down. VA and USDA loans don't have an official minimum, though lenders prefer 620+. The higher your score, the better your rate and the more options you'll have. But a lower score doesn't mean you're out, it may just mean a different path.
You’ll need more than just your down payment to buy a home. Budget for closing costs (2–5% of the loan amount), a home inspection, and two to three months of mortgage payments held in reserve after closing. Other costs may apply depending on your area.
A pre-qualification is a quick estimate based on information you provide to your Mortgage Banker. It's a starting point, not a commitment. A pre-approval is a real review your income, assets, and credit are verified, and you get a formal letter. Sellers take pre-approval more seriously. If you're ready to buy, skip pre-qualification and go straight to pre-approval.
Yes, and you're not alone in asking this. Student loan debt affects your debt-to-income (DTI) ratio, which lenders use to see how much of your income goes to existing obligations. As long as your total monthly debts stay within acceptable limits, student loans won't automatically disqualify you. Some loan programs also have specific rules around how student loan payments get calculated for DTI purposes.
From accepted offer to closing day, plan for 30 to 45 days. Getting pre-approved before you make an offer and responding quickly when your lender asks for documents during underwriting are the two biggest factors in keeping that timeline on track.
Start by working with an Atlantic Bay Mortgage Banker. They will help you get pre-approved. Once you have an accepted offer, you'll complete your full loan application, provide income and asset documents, and your lender will order an appraisal. After underwriting, you'll receive a Closing Disclosure three days before closing. Your Mortgage Banker walks you through each step.
There's no universal good time, only a good time for your situation. Mortgage rates and home prices change constantly, so you don’t need to anchor your decision to today's numbers.
Instead, ask whether you can comfortably afford the payment with room for taxes, insurance, and maintenance, and whether your income is stable. If those line up, the math usually works even when rates aren't at their lowest.
Refinancing your rate may be an option later if rates drop, but you can't recover the cost of waiting if home prices rise. Your Atlantic Bay Mortgage Banker will check current rates and local market conditions to help you decide, since both shift often and vary by area. Your Mortgage Banker can help you look at the full picture, including an estimate of your monthly payment.