First Time Home Buyers

Who Qualifies as a First Time Home Buyer?

Many buyers are surprised to learn that you may still qualify as a first time home buyer even if you’ve owned a home before. Most lenders and government programs define a first time home buyer as someone who has not owned a primary residence in the past three years. This opens the door to special first time home buyer loans, reduced down payment requirements, and other benefits — even for buyers who technically bought a home once in the distant past.

Understand Your Credit and Budget

Before you start browsing listings, it’s essential to understand where you stand financially. Lenders look closely at your credit score for a mortgage, your debt-to-income ratio, and your employment history. A credit score in the high 600s or above typically opens up the best mortgage rates for first time buyers, though many loan programs accept lower scores with a larger down payment or compensating factors.

Getting pre-approved for a mortgage early in the process is one of the smartest moves a first time buyer can make. Pre-approval tells you exactly how much home you can afford, strengthens your offer in a competitive market, and helps you avoid falling in love with a home outside your budget.

Explore First Time Home Buyer Loan Programs

There are more low down payment mortgage options available today than most buyers realize:

• FHA Loans – Backed by the Federal Housing Administration, these loans allow down payments as low as 3.5% and are popular among first time buyers with limited savings or lower credit scores.
• Conventional 97 Loans – Allow qualified buyers to put down just 3%, often with competitive interest rates.
• VA Loans – Available to eligible veterans and active-duty service members, often requiring no down payment at all.
• USDA Loans – Designed for buyers purchasing in eligible rural and suburban areas, also offering zero-down financing.
• State and Local Down Payment Assistance Programs – Many states offer grants or forgivable loans specifically for first time home buyers to help cover down payments and closing costs.

Working with an experienced loan officer ensures you’re matched with the best first time home buyer mortgage program for your specific financial situation.

Save for a Down Payment and Closing Costs

While the old “20% down” rule still circulates, most first time home buyers put down far less — often between 3% and 10%. Beyond the down payment, budget for closing costs, which typically run 2% to 5% of the purchase price. These cover appraisal fees, title insurance, lender fees, and prepaid taxes or insurance. Some programs allow sellers or lenders to help cover these costs, so it’s worth asking about closing cost assistance for first time buyers.

Get Pre-Approved and Find a Real Estate Agent

Once your finances are in order, getting a mortgage pre-approval letter is your next move. This document shows sellers you’re a serious, qualified buyer. Pair this with a knowledgeable real estate agent who specializes in working with first time buyers — someone who can guide you through local market conditions, negotiation strategy, and inspection contingencies.

Shop for a Home Within Your Approved Budget

With pre-approval in hand, focus your search on homes that fit comfortably within your budget — not just the maximum you’re approved for. Factor in property taxes, homeowners insurance, HOA fees, and maintenance costs, which add up beyond your monthly mortgage payment.

Make an Offer and Navigate Underwriting

Once you find the right home, your agent will help you craft a competitive offer. After acceptance, your loan moves into mortgage underwriting, where the lender verifies your income, assets, and the property’s value through an appraisal. Staying responsive and avoiding major financial changes (like new credit cards or job changes) during this period helps keep your home loan approval on track.

Close on Your New Home

At closing, you’ll sign your final loan documents, pay any remaining closing costs, and receive the keys to your new home. It’s the finish line of a process that started with a simple question: “Can I actually afford to buy a house?”

Ready to Take the First Step Toward Homeownership?

Every first time home buyer’s situation is different, and the right mortgage loan program for you depends on your credit, income, savings, and homeownership goals. Getting personalized guidance early can save you time, money, and stress throughout the home buying process.

Contact Lee Boone today to get pre-approved and start your first time home buyer journey with confidence.

Lee Boone 📞 (207) 491-0012 📧 lboone@acadialending.com

Our mortgage solutions include Conventional Loans, VA Loans, Construction Loans, First Time Home Buyer Programs, Hard Money Loans, Jumbo Loans, DSCR Loans, and FHA Loans, providing a range of financing options designed to support homebuyers, investors, and property owners with different lending needs.