First-time homebuyers, your biggest purchase deserves our best advice.
Buying a home is the single largest purchase most people make. That’s why we’ve put together this helpful guide for first-time homebuyers. The more you know about your options, the easier it is to arrange financing that suits your needs.
Where do I start?
The first thing you should do is determine your budget. What is a monthly payment amount you’re comfortable with? Remember to include taxes and insurance. Next, speak with a KeyBank Loan Officer about prequalification to determine what loan program and mortgage amount you may qualify for. This can help set expectations and save time when you begin your home search.
The loan process
These are some of the steps you’ll have to take to secure your mortgage:
- Step 1: Determine your budget
- Step 2: Get prequalified
- Step 3: House hunt and make an offer
- Step 4: Submit your loan application
- Step 5: Application processing
- Step 6: Receive initial loan approval
- Step 7: Prepare for your loan closing
- Step 8: Close and sign final paperwork
- Step 9: Get the keys to your new home!
Fixed-rate vs. adjustable-rate
Each has its own advantages, and your choice depends on factors such as the current interest rate, how long you expect to own your home, your down payment, and your cash flow.
- Predetermined monthly payment amount.
- Rate remains the same for the term of the loan to allow for easier budgeting.
- Suitable for those who plan to stay in their home for a longer period of time.
- Interest rate adjusts periodically to reflect market conditions.
- Initial fixed-rate period offers a lower interest rate. At the end of the initial period the rate and monthly payments may increase.
- Initial fixed-rate periods may vary. Contact your loan officers to discuss available options.
- Suitable for those who may want to sell or refinance early or can afford to make larger monthly payments after the initial fixed-rate period expires.
Types of Mortgages
With the right home loan, you can buy a home and keep your finances on track. These are the most popular mortgages for first-time homebuyers.
These home loans are not backed by the federal government. They conform to limits set by Fannie Mae and can be either fixed- or adjustable-rate. FNMA HomeReady can have a combined loan-to-value (CLTV) up to 105% of purchase price.
A mortgage home loan that is insured by the Federal Housing Administration (FHA). Also known as a government loan. FHA mortgage insurance protects the lender if a borrower defaults on the FHA loan. This insurance enables a lender to provide loan options and benefits often not available through conventional financing.
These loans offer great benefits to qualified veterans and reservists. These loans offer up to 100% financing with no Mortgage Insurance and no down payment required in most cases.1
A Key Community Mortgage loan helps low- to moderate-income borrowers become homeowners. Features include low down payments that can come from gifts or grants, all or part of the points and closing costs can be financed as part of the loan, fixed-rate terms, and no PMI required.