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    Home Purchase - Home Refinance
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  • Home Buyers Guide

  • The Complete Home Buyers Guide

    Congratulations on your decision to buy a home.

    There is nothing more awesome than achieving the American dream of home ownership. But the road to buying a home is a road only traveled for most people once or twice in their lifetime. So I’ve put together a first time home buying guide to help guide you successfully on your way.

    The first step is to ask yourself: ‘Is it really time for me to buy a home?’

    Don’t buy a home simply because everyone else is buying, because you’ve heard renting is “throwing money away,” because you believe it’s a buyer’s market, or because mortgage rates are low. Buy when you need a place to live, can comfortably afford the mortgage, taxes, insurance, maintenance, and unexpected repairs, have adequate emergency reserves, and expect to remain in the home for a meaningful period. There is no universal minimum time to own, but staying several years can help offset closing costs and reduce the risk of needing to sell during an unfavorable market.

    Determine how you will afford your home

    For most of us, a home is the largest purchase we will make, and most buyers will need a mortgage to finance it.
     
    To buy your first home, you will typically need good credit, a reliable and verifiable source of income, and enough cash for the down payment and closing costs. You may not need to wait years to save a large down payment. Depending on your qualifications, certain conventional programs may allow down payments as low as 3%, while FHA loans may allow as little as 3.5% for borrowers eligible for maximum financing. A larger down payment can reduce the cash needed upfront and may eliminate private mortgage insurance on a conventional loan, but the best option depends on your finances and loan terms.
     
    Student-loan debt can also make buying a home more difficult. Federal Reserve research found that higher student debt was associated with lower homeownership among borrowers during the first five years after leaving school. Even so, some buyers may qualify based on their current qualifying income, payment history, and overall debt profile. Debt-to-income limits vary by loan program and lender, and future income generally cannot be counted unless it is documented in a way the lender accepts.
     
    A lender can review your credit, income, debts, assets, and available cash to help you understand which loan programs may fit your situation, the monthly payment you can realistically manage, and the price range you should consider.

  • Pre-Approval

    Start With a Pre-Approval

    Once you decide you want to buy a home, the smartest first move is to get financially organized and speak with a mortgage lender about pre-approval. You can still research homes and work with a real estate agent, but understanding your financing first will help you focus on properties within a realistic budget.
     
    A mortgage loan officer will review your application, pull your credit, discuss the loan programs you may qualify for, estimate your price range and monthly payment, and calculate the cash needed for your down payment, closing costs, and any required reserves.
     
    A pre-approval is not a guarantee that financing will be approved, but it gives you a clearer understanding of what you can buy and helps you present your financing to sellers with an agent.
     

    What Mortgage Lenders Look At

     

    Credit and Credit History

    Your credit history affects the loan programs, rates, and terms available to you. A higher credit score may open more options and lead to more favorable pricing, while a lower score may result in higher rates, additional requirements, or fewer programs. A lower score does not automatically mean you cannot qualify.
    Many people check their credit through a free service such as Credit Karma to get a general idea. Keep in mind that this is usually a consumer credit score—not necessarily the score or scoring model a mortgage lender will use. Mortgage lenders may review credit from all three bureaus and use a mortgage-specific model, so your scores can differ.
     

    Down Payment and Loan Programs

    Down payment requirements depend on the loan program, your credit, your income, the property, and other factors. Some eligible military members, veterans, and surviving spouses may qualify for a VA loan with no down payment, although a funding fee may apply. USDA loans may offer no down payment for qualified buyers purchasing eligible homes in rural areas.
    FHA loans may allow down payments as low as 3.5% for borrowers who qualify for maximum financing, while eligible conventional loans may allow 3% down.
    Down payment assistance may also be available through state and local programs, nonprofit organizations, or employers. Depending on the program, assistance may be provided as a grant, a second lien, or another form of support. Some programs also have income limits, credit requirements, or require buyers to contribute part of the down payment.
    A larger down payment may give you access to better rates or eliminate private mortgage insurance on a conventional loan, but 20% down is not automatically the best or most affordable option for every buyer. Compare your choices based on the total cost, monthly payment, available reserves, and the loan terms that best fit your situation.
     

    Mortgage Insurance

    Conventional loans with less than 20% down generally require private mortgage insurance, or PMI, which protects the lender if the borrower defaults. FHA loans have their own mortgage insurance program, while VA loans generally charge a funding fee instead of PMI. USDA loans also involve guarantee fees.
    Mortgage insurance may be more expensive when the down payment is smaller. It can also be removed after the borrower reaches the required level of equity, provided all applicable program conditions are met.
     

    Down Payment, Closing Costs, and Reserves

    Your cash requirements may include more than the down payment. You may need money for closing costs, property taxes, homeowners insurance, moving expenses, and immediate repairs or improvements. Some loan programs also require you to maintain cash reserves after closing.
     
    Keeping money in reserve after purchase is important. It gives you a cushion for emergencies, unexpected repairs, and other unexpected expenses. Your loan officer can explain whether your specific loan program has reserve requirements and help estimate the cash you may need to bring to closing.
     

    Employment and Income Stability

    Mortgage lenders want confidence that you will have enough income to make your monthly payments. A recent job change does not automatically disqualify you, and there is no universal requirement that you have held the same job for a particular number of years. Lenders generally review your employment history, current employment, income, and overall financial profile.
    If you are self-employed, receive commissions, bonuses, or significant income from tips, your lender may need additional documentation or may average your income over a period of time. Self-employed buyers may need to provide tax returns, business income documents, W-2s or 1099s, K-1s, and bank statements.
     
    Legitimate business expenses can reduce taxable income, but the amount a lender uses to qualify you may differ from the amount you report to the IRS. Report all of your income accurately and ask your lender how your qualifying income will be calculated.

  • Ready to Take the Next Step?

    Get pre-approved so you know your price range, your estimated payment, and the loan programs that may fit your situation.
     
    Give me a call at (651) 552-3681, click the button below to apply online, or schedule an appointment to discuss your options.
     
     

  • Updated November 2026. Loan programs, rates, and guidelines are subject to change. This guide is for general information only and is not a commitment to lend. Subject to credit approval and program eligibility. Equal Housing Opportunity.

  • ** EXPERIENCE MATTERS **

    Top rated mortgage lender locally and nationally, year after year... This is because clients agree - Experienced Loan Officers with mortgage interest rates you can brag about and amazing service clearly sets us apart from the big banks and online lenders.

  • Equal Housing Lender. The Joe Metzler Team at Cambria Mortgage lends in Arizona, Colorado, Florida, Iowa, Minnesota, North Dakota, South Dakota , and Wisconsin only. This is not an offer to lend or to extend credit, nor is this a guaranty of loan approval or commitment to lend. Information here can become out of date, and may no longer be accurate. Products and interest rates are subject to change at any time due to changing market conditions. Not all programs available in all states. Actual rates available to you may vary based upon a number of factors. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal and title report. Joe Metzler, NMLS 274132, Cambria Mortgage NMLS 322798. © 1998 - 2026.

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