How to Qualify First Time Home Buyer: What You Need to Know to Meet First Time Home Buyer  Qualifications

No Worries, this article will let you know how to qualify First Time Home Buyer (even if you owned a home in the past).  We can show you what you need to know to qualify for a home loan.

Absolutely, you can get qualified as a first-time home buyer and it doesn’t have to be an overwhelming home buying process.

But, qualifying for a home loan, can be made easier when you have a qualified professional helping.

You can bet, there are new mortgage programs available in 2018 that make far easier to qualify for a loan than ever before.  One such program, the Home Ownership Program helps first time home buyers become homeowners.

Finally, this article is going to show you show you everything you need to know to qualify as a first-time home buyer.

Rate Search: Get Approved for a Home Loan or Rent to Own or Rental

Qualify First Time Home Buyer

Qualify First Time Home Buyer

1. Get a Copy of Your Credit Report (Ideally, A 3-in-1 Credit Report Is Best) – The Most Important of All Home Buyer Qualifications

Qualify First Time Home Buyer by Checking Your Credit ScoreFirst and foremost, get a copy of your credit report from all three major credit bureaus.

First Time Home Buyers can get a free copy of your report at

You may also order your credit reports via a hard copy from Annual Credit Report directly.  Just download the PDF document, print and mail.

As a popular government-run website, this organization allows consumers to get a free copy of their credit reports once per the calendar year.

There is an additional charge which will allow you to purchase your credit reports with credit scores.  This, by far, is the best option because knowing what your credit scores are is key to first time home buyer qualification.

Getting Free Credit Scores

Of course, if you want free credit scores, you can get them through:

Credit Karma

Free Credit Score

Credit Sesame

Wallet Hub

Checking for Credit Report Errors and ID Theft

For sure, check your credit report for errors, obsolete information or ID theft.  Once you have pulled all three reports, check each report, literally, line-by-line.  By making a thorough effort, you can make sure there are no errors, ID theft or any outdated or unusual information.

If you find any errors, inaccurate or obsolete information, including ID theft,  you should contact the credit bureaus immediately to file a dispute.  If done successfully, disputation of credit report information may allow you to qualify first time home buyer.

Ideally, you want to look at suspicious errors also.  Usually, errors will look suspicious when:

  • They include wrong addresses (or addresses where you’ve never resided)
  • Too many wrong addresses
  • Too many employers
  • Too many accounts with whom you’ve never had any associations
  • Wrong dates
  • Wrong balances
  • Late Payments
  • Strange or unusual credit inquiries

No doubt, you can dispute incorrect, incomplete, obsolete and inaccurate information on your report by contacting the credit bureau directly online, or in writing.  For sure, this is a critical part of the puzzle on how to qualify first time home buyer.

Tips for disputing your credit report with all 3 credit bureaus

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2. Check Your Credit Score

On balance, your credit score is one of the most important factors when trying to qualify first time home buyer.  Indeed, when it comes to getting approved for a mortgage, it’s critically important to make your score is as high as possible prior to making an application.

Rather conveniently, you can check your credit score for free on sites like Credit Karma and Credit Sesame.

Tips to Help Increase Your Credit Score Quickly.

Tip 1: Pay down credit card balances

  • By the numbers, your credit utilization ratio is the amount of available credit you’re using.  Right to the point, it accounts for 30% of your overall FICO score.
  • Pay down your credit balances to less than 10-15% of the card’s limit.

Tip 2: Don’t Apply for New Credit

  • Do not apply for new credit.
  • Do not apply for new lines of credit, credit cards, or loans.

Note: When you apply for credit, a hard credit inquiry is reported to the credit bureau which will lower your score.  When doing so, you’re also adding new debt to your credit report which can negatively impact your scores.

  • Pay all your bills on time.   Ideally, it is always best to remit payment on time, every time – 3 days prior to the due date. But, when you’re going to be applying for a mortgage soon, it’s imperative you do not have any new late payments. Late payments, even just one, can ruin the chances to qualify first time homebuyer.
  • Smarter still, set up auto pay with all your bills so you can avoid those disastrous late payments.

Qualify First Time Home Buyer

3.  Get Pre-Approved

Couple Qualify First Time Home Buyer

Before the house hunting begins, you need to get pre-approved for a mortgage, rental or rent to own.

In order to get pre-approved for a home loan, you need to speak to a lender or a housing counselor with Home Sweet Home.

A mortgage loan officer will check your credit and verify your income and assets with your W2’s, tax returns, bank statements and paycheck statements.

Keep in mind, most real estate agents will not even meet, much less start showing you houses, before you have a pre-approval letter in hand. If you don’t have a pre-approval letter in hand, most sellers won’t accept offers.

If you don’t have good or fair credit, finding a rental may also be very difficult.  You can, if your scores allow it, get a pre-approval for renting letter from Home Sweet Home housing counselors and qualify with rent to own assistance or rental help.

As far as loan qualification goes, the process is quick and easy.  Most of the time, you can first time home buyer qualify in a matter of minutes.

Documents You Need to Get Approved

  • 2 years of tax returns
  • W2 (for 2 years)
  • Pay stubs
  • 2-3 months of bank statements
  • Proof of down payment funds

Get Pre-Approved for a Mortgage, Rental or Rent to Own

Qualify First Time Home Buyer

4.  Find Out If You Can First Time Home Buyer Qualify for An FHA Loan

Easily, FHA loans are perfect for borrowers seeking to qualify first time home buyer.  Why? By and far, FHA loans are known to have far less strict requirements.  More so, FHA loans are the most popular type of loan for first-time buyers because it only takes:

  • A low 3.5% down payment
  • 580 credit score to qualify

Some of the advantages of FHA loans include:

Get Pre-Approved for a Mortgage, Rental or Rent to Own

5.  Know Your Down Payment Options

Of critical evaluation, the amount of down payment needed to buy a house will depend on the type of loan you receive.

Equally important, find out how much down payment you will need to qualify first time homebuyer.

Since it’s harder to first time home buyer qualify with less in savings, there have emerged a plethora of low and no down payment loans.

Amazingly, FHA loans require 3.5% down payment funds.  Of course, this type of loan a great option for first time home buyers who are trying to meet first time home buyer qualifications.

Here are the breakdowns on various loan products:

  • FHA Loans – 3.5% down payment with a 580 credit score
  • USDA Loans – No down payment (some light suburban, light rural homes may apply)
  • VA Loans – No down payment
  • 203k Loans – (“rehab”) – 3.5% down payment
  • Conventional Loans – 3-to-20% down payment
  • FHA (“clone”) 3% down

A wonderful help, Down Payment Resource is also an excellent resource for down payment assistance.  In a word, these can help any buyer qualify first time home buyer.

6. Hire A Great Real Estate Agent.

Qualify First Time Home Buyer Meets Real Estate AgentIn many cases, many first time home buyers will not hire a real estate agent.  In fact, sometimes buyers think they are saving money by doing so.  Technically, the buyer actually pays all costs of the sales transaction.  On listed houses,  a listing agreement already states the listing agent will be paid so much money on the transaction.  When a buyer’s agent brings a buyer, the commission is split.  Either way, there is no savings.

Additionally speaking, having an agent on your side helps keep the seller side a bit more “honest” than what otherwise might be the case.

Finally, and more importantly, a real estate agent can help buyers qualify first time home buyer.

Qualify First Time Home Buyer

7. Budgeting Homeownership Costs Is Important

Coupled with the cost of a house, there are other costs associated with getting a house.  Correspondingly, there are homeowner’s insurance, mortgage insurance premium (“MIP”), closing costs, and (if applicable) homeowner’s association fees to consider.

Typically, mortgage insurance is another cost that is required by lenders.  Also, MIP ranges from .08 to 1% of the mortgage loan; mortgage length in years (“term”); and the size of your down payment.

Comparatively speaking, conventional loans are an excellent option if you have 20% down to qualify first time home buyer.

Not to mention, conventional loans also do not require mortgage premium with a down payment greater than 20%.

Use a mortgage calculator to find out how much house you can afford.

8. What Is Your Debt-to-Income Ratio?

Your debt to income ratio is one of the most important factors in determining whether you can qualify first time home buyer.  Most importantly, this ratio is the total of your monthly debts as compared to your gross, pre-taxed income.

Front-end DTI ratio is calculated as your monthly debts as compared to your gross monthly income (excluding a house payment).

For example, you make $4,000 per month.  Continuing, you pay your credit card bills, car payment and student loans (all debts to organizations you owe).  In sum, your payments total $1,000.  In the final analysis, your front-end debt-to-income ratio calculates to be 25%.  So, 25% of your income goes to repayment of the money you borrowed from other people and organizations.  In order to qualify first-time homebuyer, this ratio needs to be less than 28%.

With equal consideration, the back-end DTI is calculated as the sum of all debt payments including a mortgage payment.  For example, you make $5,000 per month.  $1,000 of that amount goes to credit cards, car payment, and student loans plus $1,000 house payment.  Again, calculated out, your back-end ratio would be $1,000 + $1,000 = $2,000 / $5,000 = 40%.  Ideally, FHA will work as the maximum ratio is 41%.  This will work to qualify first time home buyer.  However, front-end ratios can be as high as 50%.

9.  Check and Qualify for First Time Home Buyer Programs and Grants

There are many down payment assistance programs for first time home buyers.  Additionally, HUD has a number of local state programs that offer first time homebuyers down payment assistance programs to buy a home.

In addition, many state and local communities offer first time homebuyer assistance programs, some of which require home buyer class attendance.

10.  Find Out About What Types of Loans Exist

To say the least, there are more options than just FHA loans.  Invariably, while FHA is one of the most popular loans available, other good choices also exist.

Conventional Loans

These types of loans are great if you have a 20% down payment.  As a bonus, conventional loans do not require mortgage insurance when the down payment is greater than 20%.

VA Loans

Veterans Loans are one of the most affordable mortgages in existence.  Consequently, there is no down payment.  Literally, a zero down payment loan is a great option especially when savings are low.

Find out how to get a mortgage with no down payment.

Freddie and Fannie 3% Down Payment Loans

Set apart, Freddie and Fannie are two of the largest buyers of these kinds of loans.  To compete with the FHA market, they launched the 97% Conventional Mortgage (also called “the FHA clone”).

203 Loan

A major type of loan, the 203 is ideal for house renovation and, again, only requires a 3% down payment.

USDA Loans

Additionally, another major contender, the US Department of Agriculture loans are ideal for low-income rural dwellers save money on a mortgage.  These loans feature no down payment and low-interest rates.

Qualify First Time Home Buyer – FAQ

Who is considered a First Time Home Buyer?

Normally, first time homebuyers need NOT to have owned a home in the last 3 years.

Do first time home buyers need a down payment?

Currently, there is no loan specifically tailored for first time home buyers.  Some loans, depending on the type of loan, may or may not require a down payment.

Which loan is best for first time home buyers?

Typically speaking FHA is normally the loan of choice.  However, depending upon your circumstances, you may qualify for a loan other than FHA.  As noted above, several loan types may be ideal to qualify first time home buyer such as a veteran’s loan or a USDA loan (sometimes known as a “farm” loan).

In Summary…

To sum up, follow these first time home buyer tips.

On top of that, employ a professional housing counselor, real estate agent and loan officer to help you qualify first time home buyer.

Need help from a qualified housing counselor?  Contact us today on how you can qualify first time home buyer.

Qualify First Time Home Buyer


  1. Royvia on September 13, 2019 at 2:57 pm

    Great post.

  2. Fredro on September 20, 2019 at 9:50 am

    Nice post!

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