Key Steps for First-Time Homebuyers
Buying a home is one of the most significant milestones in your life, but the path to the front door can feel like a maze of financial decisions and paperwork. Whether you’re concerned about locking in a specific rate or unsure if you can afford a down payment, this first-time homebuyer checklist can help turn uncertainty into clarity.
Step #1: Check your credit score
Your credit score is an important part of buying a home because it shows mortgage lenders your financial health and ability to repay loans. Instead of worrying about the number, the best thing you can do is meet with a lender early on to review your credit profile and get a clear picture of your finances. This way, they can find out which loan programs and products you qualify for right now. At Arvest, we offer many loan options for a range of credit histories to help you find the right fit. The good news is that as your finances improve, refinancing may become an option.
Step #2: Determine how much you can afford
Buying a home comes with more than just a monthly mortgage payment. You’ll need to account for both upfront and ongoing costs. Those include:
- Upfront: Potential down payment, closing costs, home inspection and any fees associated with the realtor.
- Ongoing: Monthly mortgage payment, property insurance and taxes, utilities and association dues (if applicable). Remember that homeowners insurance premiums are a significant part of ongoing costs and can fluctuate from year to year.
To help you determine how much house you can afford, use an online calculator or follow the 28/36 rule: your monthly housing costs should not exceed 28% of your gross monthly income, and total debt payments should not exceed 36%.
Step #3: Explore down-payment options
The old myth that you must put 20% down keeps too many people on the sidelines. This notion stems from the fact that once you have 20% equity in your home, you no longer have to pay private mortgage insurance (PMI). However, that doesn’t mean you can’t qualify for an affordable mortgage. There are many options available to first-time homebuyers, including assistance programs, federal and national options, and bank-specific loans, like those offered by Arvest below.
- The Arvest Homebuyer Advantage program, which gives qualified first-time buyers options for 100% financing that completely eliminates the need for a down payment or private mortgage insurance (PMI).
- The HELP program, offered by Arvest through the Federal Home Loan Bank of Dallas (FHLB Dallas), the Homebuyer Equity Leverage Partnership (HELP) program offers income-qualified first-time homebuyers in Arkansas, Kansas, Missouri, and Oklahoma up to $20,000 in grants for down payments and closing costs.
- Specialized physician loans for medical professionals (like an MD, DO, DDS or CRNA), which can provide up to 103% financing*.
If family members are willing to help, you can use gift funds to cover part — or even all — of your down payment and closing costs. However, lenders need a clear paper trail. Since this money cannot be a loan in disguise, your donor must sign a gift letter confirming the funds are a true gift with no expectation of repayment.
Step #4: Contact a lender to get prequalified
Before you start touring homes, you’ll want to get prequalified. A prequalification letter is your VIP pass to the real estate market. It shows sellers and realtors you are a serious buyer with verified buying power, which is critical in competitive bidding.
At Arvest, we make the prequalification process as painless as possible, with the Arvest Home4Me® online platform and mobile app. Home4Me allows you to submit instant inquiries, securely scan documents from your phone or computer, and connect directly with a local lender who will service your loan from start to finish.
Step #5: Start your search (with realistic expectations)
It’s critical to separate your non-negotiables from your “nice-to-haves.” Focus on elements that you cannot easily change, such as the neighborhood, school districts or the layout. Cosmetic features like countertops and paint colors can always be updated later.
Step #6: Make the offer and utilize contingencies
Once you’re ready to make the offer, it’s important to understand the power of contingencies. Think of contingencies as conditions that must be met before the sale becomes legally final. They act as your financial safety net.
- Financing contingency: This protects you in case your loan approval hits a snag, ensuring you don’t lose your earnest money deposit.
- Inspection and appraisal contingencies: An inspection contingency allows you to renegotiate repairs or walk away if major issues (like structural problems) are uncovered. Similarly, an appraisal contingency ensures the home is worth the agreed-upon sales price.
Ready to turn your homeownership dreams into reality? Connect with a local Arvest lender today to start your personalized path toward owning your first home.
Jason Peters, NMLS # 402102, is a senior vice president and mortgage loan manager for Arvest Bank - Greater Kansas City and can be reached at japeters@arvest.com.
With more than $27 billion in assets, Arvest is a full-service bank that delivers financial solutions to individuals and businesses of all sizes. Since entering the Kansas City market in 2009, Arvest has grown to a top-20 bank and the sixth-largest mortgage lender in the metro. The bank has 20 locations in the metro area. Arvest is an Equal Housing Lender and Member FDIC. Loans subject to credit approval. * Any financing over 100% must be used for taxes, insurance and other closing costs.