A plain-language checklist for first-time buyers who want to compare loan offers with confidence. Work through each part below with your own numbers and documents, and keep notes as you go.
Key takeaways
- Prequalification gives you a rough idea of what lenders may offer. Get prequalified with more than one lender
- First-time buyers may be eligible for FHA, VA, USDA or conventional programs with different requirements, as well as state and local assistance. Ask about programs you may qualify for
- Your monthly housing cost includes principal, interest, property taxes, homeowners insurance and possibly mortgage insurance and association dues. Leave room for the whole cost
Learn the vocabulary first
Before calling lenders, know a few terms: the interest rate, discount points, lender credits, the Loan Estimate, a rate lock and the Closing Disclosure. The glossary on this site and the CFPB's homebuying guides explain each one. Knowing the terms makes it easier to ask clear questions and notice when an answer is incomplete.
Get prequalified with more than one lender
Prequalification gives you a rough idea of what lenders may offer. Talking to more than one lender helps you see the range of options and service styles. When you have a property under contract, request formal Loan Estimates from your top choices so you can compare them line by line.
Ask about programs you may qualify for
First-time buyers may be eligible for FHA, VA, USDA or conventional programs with different requirements, as well as state and local assistance. A HUD-approved housing counselor can explain options at little or no cost. Ask each lender which programs fit your situation and why.
Leave room for the whole cost
Your monthly housing cost includes principal, interest, property taxes, homeowners insurance and possibly mortgage insurance and association dues. Budget for closing costs, moving and early repairs too. Choosing a payment that leaves breathing room is often more important than chasing the smallest quote.
Sources
Sources reviewed . General education only; confirm current rules with official sources and a licensed lender.
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