Buying your first home is an exciting milestone, but it can feel overwhelming if you’ve never navigated the process before. Having a trusted lender by your side can make all the difference, guiding you through each step and helping you avoid common mistakes that first-time homebuyers often make.

Start with Pre-Approval
One of the biggest missteps is looking at homes before talking to a lender. In competitive markets, homes can sell quickly, and without pre-approval, you may miss out. Pre-approval not only clarifies what you can afford but also shows sellers that you’re a serious buyer ready to secure a loan.

Explore All Loan Options
Don’t assume the most common loan is the best fit. Conventional loans are widely used, but first-time buyers may benefit from alternatives. FHA loans often require lower down payments and have flexible qualifying criteria. VA loans support veterans and active-duty service members, while USDA Rural Development loans can make homeownership more attainable in rural areas. Knowing all your options can save you money and open doors you might not have considered.

Know Your Credit and Improve It
Your credit score plays a major role in securing a mortgage and qualifying for lower interest rates. Keeping an eye on your credit and addressing any issues beforehand can make a big difference. Generally, a score above 740 is considered excellent and may help you access the best rates. Simple steps like paying down debt or correcting errors on your credit report can strengthen your score before applying.

Plan for Total Homeownership Costs
Buying a home isn’t just about the down payment and mortgage. Make sure your budget accounts for:

• Closing Costs: Includes taxes, application fees, attorney fees, title insurance, appraisal fees, and more. Ask your lender for a detailed breakdown upfront.
• Insurance: Homeowners insurance is required, and flood insurance may be needed depending on your location.
• Property Taxes: Understand your annual tax amount and factor it into your monthly budget.
• Utilities: Monthly bills may be higher than in a rental since you’re now responsible for everything.
• Maintenance: Repairs, landscaping, and upkeep are part of homeownership.
• HOA Fees: If applicable, include monthly dues in your budget.

Find the Right Down Payment
Putting too much down can delay your home purchase, while too little can lead to higher monthly payments or added costs like private mortgage insurance (PMI). Your lender can help you find the “just right” down payment that balances upfront costs and long-term affordability. For those concerned about saving, ask about down payment assistance programs to help make homeownership possible sooner.

Ask Your Lender Questions
Your lender is your guide, so don’t hesitate to ask questions. Prepare a list before meetings to ensure you leave with confidence and clarity. Key questions include:

• What is the current interest rate?
• What are the lender fees?
• What is the minimum down payment to qualify?
• Which loan type is best for me, and what are the pros and cons?
• How long will the loan process take?

At Citizens Bank, our lenders are here to help you every step of the way. Let us guide you through the homebuying process and help you purchase your dream home today.