Buying your first home can feel exciting, but also intimidating and expensive. With mortgage rates still elevated compared with the ultra-low rates of years past, many aspiring first-time homebuyers are wondering whether they should wait, save longer, or make a move now. But loan officers who work with buyers every day say many first-time homebuyers may be focusing on the wrong things. For insight into what matters most, HomeLight surveyed mortgage loan officers from 78 lending companies across the U.S. We asked them for advice they’d give a first-time homebuyer preparing to enter the market. Their responses, collected from two recent surveys, revealed common themes — and some surprises. Here are 10 things lenders wish every first-time homebuyer knew before buying.
Many first-time buyers assume they should wait until they have a full down payment saved or are ready to actively house hunt before speaking with a lender. Loan officers told us that approach can put buyers behind. A recurring message in the surveys was simple: Start preparing early, even if buying feels a year or more away. “No matter when you think you may want to buy a home, prepare as if it is going to be now,” says Tennessee-based loan officer Addison Cowan. “When home fever hits, you want to be ready.” That preparation can mean checking your credit, paying down debt, building savings, gathering income documents, or simply talking through what price range may be realistic. “Focus on what you can control,” says Ashlee Sheppard, a leading loan officer in Georgia. “You can’t control interest rates, home prices, or the headlines, but you can control your preparation, your credit, and who you choose to guide you through the process.” Starting early may also reveal options you didn’t realize existed, including loan programs or down payment assistance that could help move your timeline up. “Don’t be afraid to start the process,” says Texas loan officer Barbara Frierson. “You may be able to buy more than you think.” If lenders sounded unanimous about one thing, it was this: Don’t start touring homes before understanding what you can afford. “The single most important piece of advice I would give is to get pre-approved for a mortgage,” says Andrew Mallory, a loan officer serving Southern California. “It gives you a clear understanding of what you can afford and helps you move quickly when the right property comes along.” In competitive situations, fully underwritten pre-approval can also signal to sellers that you’re serious. “Talk to a mortgage advisor before you begin your house search,” says Chris Scheer, a top loan officer in Missouri. “Go in with a strategic plan, so you know everything that is available to you,” says Oregon loan officer Dawn Robbins, who has 27 years of experience. The takeaway: Don’t wait until you’ve found the perfect home to talk financing. Get your numbers in place first. Then shop with clarity and confidence. Just as importantly, lenders like Washington loan officer Anthony Bennett repeatedly warned buyers not to focus only on a home’s purchase price. “Look at your payment, not the ticket price.” A home that stretches your budget too thin may leave little room for repairs, rising property taxes, insurance increases, or everyday life. Alex Knaus, an Arizona loan officer, put it simply: “Buy below your means.” Surveyed lenders encouraged buyers to focus on what payment feels sustainable, not just what a lender says you can technically qualify for. “Be prepared that you may not get exactly what you ‘want,’ but what will keep you financially sound,” advises Bobbi Swann, a loan officer in Florida. That may mean adjusting expectations on size, location, or finishes, especially for a first home. And that’s another common lender refrain: Your first home does not have to be your forever home. “Start small, but start now,” says California loan officer Felisa Schlosser. “Your first home is a stepping stone. Nobody buys their dream home first.” Many lenders warned against putting off a purchase while waiting for rates to fall or home prices to drop. In fact, this may have been the strongest theme in the surveys. “Waiting for the ‘perfect’ rate is the most expensive strategy of all, because when rates drop, prices don’t go down — they take off,” warns Texas loan officer Rich Bonn. “You don’t time the market. You beat it by getting in before everyone else wakes up.” Some lenders argued that, rather than trying to predict the market, buying when you’re financially ready is often the stronger move. “Buy the home, not the rate,” says Eddy Castellano, a home loan expert serving the South Atlantic Region. “Waiting for the perfect moment is how most people miss it.” Several lenders echoed the familiar “marry the house, date the rate” idea; the notion that a home is a long-term investment. You can consider refinancing later if rates drop. The message: Buy because it fits your life and finances, not because you think you can outguess the market. One perceived obstacle that kept coming up in our surveys is the belief that first-time homebuyers need a 20% down payment to purchase a home. “The biggest misconception buyers have in today’s market is still assuming they need 20% down,” says Colorado loan officer Brit Alexander. “First-time homebuyers also tend to assume their own loan qualification and get discouraged before speaking to a mortgage professional.” Depending on the loan type and your lender-confirmed qualifications, lower down payment options may be available, including some programs designed specifically for first-time buyers. “Many people assume homeownership is out of reach before they ever have a real conversation about their numbers,” says Sheppard. “Yes, there are more factors to consider in today’s market, but when we actually break it down, the gap is often not what they expected.” Lenders repeatedly urged buyers not to disqualify themselves before talking with a professional. You may need less upfront cash or have more options than you think, especially with down payment assistance programs, grants, and seller concessions — resources buyers often overlook. Here are some sites to search for homebuyer assistance programs: For buyers struggling with high prices, lenders shared some creative ways they’re seeing people get their foot in the door of homeownership. Sometimes that means rethinking what a first step looks like. Montana loan officer Shannon Herrmann notes this trend she’s seeing in today’s market: “Buying homes with friends to create affordable living solutions with people they know well and want to live with, so they can build equity together.” Co-buying with friends or family can allow you to share costs, qualify for more home, and start building equity sooner. Here are some other strategies lenders say they’re seeing buyers use: Shelley Rodocker, a leading loan officer in Texas, believes homebuying is a deeply personal decision that should be driven by your unique goals rather than market timing or generic financial advice. “Everyone’s circumstances and ‘why to’s’ (reasons and motivations for buying) are a little too personal to assume following the ‘right advice’ is right for you,” she explains. “I believe that it is always the right time to buy if it’s your right time to buy.” The point isn’t that every strategy is right for every buyer. It’s that if traditional paths feel out of reach, there may be more options worth exploring than you realize. Lenders urged buyers to rethink their first-purchase expectations. A common message in the surveys: Your first home can be a stepping stone. “I like the advice ‘be flexible and start small,’” says Missouri Melisa Jones. “It’s a very simple concept, but most buyers are not following it.” For some buyers, starting small may mean choosing a condo instead of a single-family home. For others, it may mean a smaller home, a fixer-upper, or a property farther from the city center. “Don’t be afraid to save and have a small starter home,” says Alabama loan officer Lisa McVay, adding that with a smaller home, you can often get an earlier start. “Do it while you’re single and in your 20s.” A smaller starter home will typically offer lower overall monthly costs, room to grow financially, and a walkable path to a future move-up purchase. For many first-time buyers, the question may not be, “Can I buy my forever home today?” but “What smart first step can I take now?” A major theme in our surveys was the importance of keeping money in reserve after closing, rather than putting every available dollar into the purchase. “Plan to have at least 12 months of cash reserves after your purchase,” advises Chris Motal, a Texas loan officer with nearly 20 years of experience. “You’ll be well-positioned to weather 90% of the potential storms you’ll face.” That may not be realistic for every buyer, but the principle came through repeatedly: leave yourself a cushion. Survey respondents warned that homeownership comes with costs renters may not face directly, including maintenance, repairs, insurance increases, and property tax changes. “Make sure you are prepared for increasing taxes and insurance,” cautions Colorado loan officer Matt Hefner. “It’s not a matter of being prepared for ‘if’ these costs go up, but ‘when’ they go up, and ultimately raise your monthly housing payment.” Several lenders also suggested stress-testing your future payment before buying. “Practice making a higher housing payment (before you buy) by paying yourself about $500 a month and putting it in savings,” suggests Judy L. Jones, a Colorado loan officer with nearly 30 years of experience. “This will put you in the best possible position for the new home payment.” Many lenders say one of the smartest things buyers can do before applying is pay down debt. That doesn’t mean eliminating every balance. It means taking even small, deliberate steps to improve your financial foundation. “Get rid of your credit card debt; you will never catch up if you only make minimum payments,” advises Greg Herman, a top California loan officer with 38 years of experience. “This is one of the largest reasons people get denied a home loan.” Others pointed specifically to debt-to-income ratio — a key factor lenders consider — as something first-time homebuyers often overlook. Large student loans, car payments, or revolving balances can affect both what you qualify for and whether your monthly mortgage payment is actually sustainable. Several lenders also linked debt reduction to credit improvement. “Know your credit score and how to improve it,” Wisconsin loan officer Jason Marin advises. “Better scores mean better options.” Even a few months of paying down balances before entering the market may strengthen your borrowing position. “If you know buying a house is in your future, plan accordingly,” says Marin. This was another nearly universal message from loan officers nationwide: Don’t try to figure out homebuying alone. And don’t choose advisors casually. “First-time home buyers need to work with an experienced loan officer to navigate today’s market conditions and compare loan options,” says Autumn McLean, a top Montana loan officer with 24 years of experience. “This is not a time to hit the ‘easy button’ and rely on discount lenders with inexperienced loan officers.” Florida loan officer Xavier Lawrence says this advice applies to anyone on your homebuying team. “Work with people you can trust, not the first lender or Realtor you find.” Robbins agrees: “Have a great real estate agent that negotiates seller credits so you can keep more funds in your pocket.” For first-time homebuyers especially, a strong lender-agent team can help you: Phoenix-based loan officer Zach Salzman put it simply: “Preparation is key. Failure to prepare is preparing to fail.” He adds, “Partner with professionals to establish a game plan and map your path to a successful experience.” HomeLight’s free Agent Match platform can connect you with top-rated real estate agents in your buying area. We analyze over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs. To get a rough idea of what your homebuying power looks like today, try HomeLight’s home affordability calculator. Sheppard offers this closing thought: “Homeownership is not always about finding the perfect rate or perfect timing; it’s about understanding the full picture. When buyers take the time to look at the numbers clearly, many realize it is more possible than they thought.”1. Start preparing before you think you’re ready
2. Get pre-approved before you fall in love with a house
3. Shop for a payment, not a price tag
4. Stop trying to time mortgage rates
5. Don’t let the 20% down myth hold you back
6. Consider creative paths to affordability
7. Start with a smaller first home and build from there
8. Keep more cash reserves than you think you need
9. Reduce debt before you start shopping
10. Build the right lender-agent team early
