5 Tips Every First-Time Homebuyer Should Know

The five things every first-time buyer should know are: get pre-approved before you shop, learn your down payment options (20% down is not required), budget for closing costs, protect your credit until closing, and work with a lender who communicates clearly. Getting these right makes buying your first home faster, cheaper, and far less stressful.

Buying your first home is one of the most exciting milestones in life, and it can also feel like a lot. After helping more than 2,000 families buy and refinance homes, these are the five things we tell every first-time buyer.

Key takeaways

• A pre-approval tells you your real budget and makes your offer stronger.
• Many buyers put down far less than 20%. VA and USDA offer no down payment for eligible borrowers.
• Closing costs are separate from your down payment. Plan for them early.
• Keep your credit and finances steady from application to closing.
• The right team matters as much as the right rate.

1. Get pre-approved before you start shopping

Before you fall in love with a home online, get pre-approved. A pre-approval is based on a review of your credit, income, and assets, so it tells you what you can actually borrow, not just a guess.

It also helps you:

• Shop in the right price range, so you do not waste weekends touring homes that do not fit.
• Compete with other buyers. In Austin neighborhoods where good homes draw several offers, sellers and listing agents want to see a solid pre-approval letter.
• Close faster. Much of the paperwork is already done when you go under contract.

Our digital application takes about 10 minutes, and pre-approval letters are typically issued within 24 hours of a complete application. If you want to know the difference between a pre-qualification and a pre-approval, read our blog post on pre-qualified vs pre-approved.

2. Understand your down payment options

Many first-time buyers think they need 20% down. That is a myth, and it keeps a lot of people renting longer than they need to.

• Conventional loans can go as low as 3% down for eligible buyers. See conventional loans.
• FHA loans allow 3.5% down with a 580 score. See FHA loans.
• VA loans offer no down payment for eligible veterans and service members. See VA loans.
• USDA loans offer no down payment for eligible buyers in qualifying areas, including some communities around Austin. See USDA loans.

On top of that, down payment assistance programs in Texas can help cover the down payment and sometimes closing costs for eligible buyers. Putting less down usually means paying mortgage insurance, so we will show you the tradeoffs side by side.

3. Do not overlook closing costs

Your down payment is not the only cash you need. Closing costs cover things like:

• Lender fees and the appraisal
• Title insurance and title company fees
• Recording fees
• Prepaid property taxes, homeowners insurance, and interest to fund your escrow account

Closing costs commonly run a few percent of the loan amount, and the exact figure depends on the home, the loan, and the county. In Texas, you will also put down earnest money and pay an option fee soon after your offer is accepted, so keep that cash handy.

There are ways to reduce what you bring to closing. Sellers can sometimes agree to pay part of your closing costs as a concession, and some down payment assistance programs help with them too. Your Loan Estimate will list every cost up front, so there are no surprises.

4. Protect your credit during the process

Once you apply, your lender will check your credit again before closing. Changes in between can affect your approval or your pricing. Until you have the keys:

• Do not open new credit cards or store accounts, even for new furniture.
• Do not finance a car or other big purchase.
• Do not change jobs without talking to us first.
• Do not move large sums of money between accounts without keeping a paper trail.
• Keep paying every bill on time.

If something unexpected comes up, call us first. Most issues are easy to handle when we know about them early.

5. Work with a team you trust

The mortgage process has a lot of moving parts: your Realtor, the seller's agent, the appraiser, the title company, the underwriter, and you. A lender who communicates clearly keeps those parts moving and keeps you from wondering what is happening.

Here is what to look for:

• Fast answers. Our office is open 8 AM to 8 PM, seven days a week.
• Clear updates at every step, not just when something is wrong.
• In-house underwriting and processing. As a team at Network Funding, a direct lender, we keep decisions close to home.
• Realistic timelines. Most of our loans close in 21 to 30 days from contract.

We are with you from pre-approval to closing, and after. Our first-time home buyer page walks through the full process step by step.

Your next steps

1. Try our affordability calculator to get a starting price range.
2. Gather recent pay stubs, W-2s, and bank statements.
3. Apply for pre-approval in about 10 minutes.
4. Connect with a Realtor who knows the Austin neighborhoods you like. We are happy to introduce you.

Ready to take the first step?

Call 512-657-1333 or start your pre-approval for a free, no-pressure conversation. We would love to help you buy your first home.

Additional terms and conditions apply. Not all loan types are compatible with this product. Subject to underwriting conditions. Not a promise to make a loan. All borrowers must qualify. Network Funding, LP NMLS #2297. Kyle Richardson NMLS #863464. Equal Housing Lender.