The First-Time Buyer's Financing Playbook
Navigating financing as a first-time buyer is more manageable than you might think. Start by checking your credit score early. Aim for 620 or higher, though FHA loans accommodate lower scores with competitive rates. Here's the good news: the 20% down payment isn't actually required. Many first-time buyers put down just 3.5% through FHA loans, conventional 97 programs, or state and local assistance programs that offer grants or down payment help. Veterans benefit from VA loans with zero down, and USDA loans offer the same for eligible rural properties. Before house hunting, work with a good lender and get pre-approved (not just pre-qualified) to understand your true budget and strengthen your offers. Working with a lender who specializes in first-time buyers is invaluable; they'll guide you through available programs, explain loan options, and help you plan for closing costs, which typically run 1-5% of the purchase price. The key is preparation: start early, work on your credit, save consistently, and educate yourself on your options. With the right approach and resources, homeownership is well within reach. We have the right resources and can put you in touch with an experienced lender to get you pre-approved. Just give us a call.
- When you need to work on your credit. Maybe your credit score is just starting to recover, but you need more time to pay down debts for a couple of years. With rent-to-own, you could start investing in a home while you bring up your score.
- You’re close, but not quite ready to secure a mortgage. You might have a good job with a significantly bigger salary, but you haven’t been there long enough for a lender to consider it a stable source of income. Or maybe you’re self-employed and you’re still building a reliable track record. Rent-to-own allows time to build personal wealth and financial credibility while working toward your homeownership goals.
- When you know you’re going to buy when the lease expires. If you’re not ready to buy when the lease expires, then you will lose any rent credit, i.e. investment, you’ve put into the home.
