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.
Pro tip: Check your credit report and score regularly to ensure you’re staying on track and that there are no errors or fraud impacting it. You can receive one free credit report annually from AnnualCreditReport.com.
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, association dues (if applicable).
One way to determine how much house you can afford is to use an online calculator, such as the one found on Arvest’s Home4Me® app. Another good rule to follow is 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%. For example, if your gross monthly income is $8,000 (before taxes, benefits and payroll deductions), your housing costs should not exceed $2,240 (monthly payment, interest, taxes, insurance, etc.), and total debt payments should not exceed $2,880 (housing costs plus car loans, credit card payments, student loans, etc).
Remember that loan costs and mortgage interest aren’t the only affordability factors. Homeowners insurance premiums are a significant part of ongoing costs and can fluctuate from year to year. When you finance a home, your lender requires a policy that fully covers the property's replacement cost.
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: Offered through a joint partnership with Arvest and the Arvest Opportunity Fund, a wholly-owned nonbank subsidiary of Arvest, the Arvest Homebuyer Advantage program 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: If you are a medical professional (like an MD, DO, DDS or CRNA), Arvest offers specialized programs that can offer up to 103% financing.* This allows you to roll your closing costs into the loan – meaning $0 out of pocket – and skips the PMI entirely. You can even close on a home up to four months before starting your new contract.
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. At Arvest, we can provide a simple gift letter template and help gather the necessary bank statements to make the process seamless for you and your family.
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. More importantly, it gives you peace of mind by showing how much a lender will finance before you make an offer.
At Arvest, we make the prequalification process as painless as possible, with the Arvest Home4Me® online platform and mobile app. Instead of chasing down paperwork or spending hours at a desk, Home4Me allows you to kickstart your journey right from your phone or computer. This all-in-one tool 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. By keeping your realtor in the loop with real-time status updates, Home4Me ensures your entire team is ready to move quickly when you find the perfect home.
Step #5: Start your search (with realistic expectations)
It's easy to get swept up in the aesthetic of a house, but 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.
Pro tip: Consider resale value when planning for the future. Your first home likely won't be your last, so you’ll want to think about your “exit strategy” and long-term goals.
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. Your realtor and your Arvest lender will help you navigate which contingencies to include so your interests are completely protected.
Ready to turn your homeownership dreams into reality? At Arvest, we’re here to guide you through every step of the journey, from your first savings goal to the moment you get your keys. Explore our flexible mortgage options and connect with a local Arvest lender today to start your personalized path toward owning your first home.
*Any financing over 100% must be used for taxes, insurance and other closing costs.
