Tips on How to Get a Fantastic First Mortgage

Buying your first home is a major milestone and, if you’re like many Americans, possibly the largest purchase you’ll ever make! Alongside the excitement of homeownership comes the challenge of exploring the world of mortgage loans, lenders, and interest rates.

Not sure where to start? We don’t blame you. Mortgages for new and seasoned buyers alike can be confusing! The good news is that there are many ways to make the process easier. Let’s dig into some first-time homebuyer mortgage tips to help you for the long term.

How to prep for your first mortgage application

The first step in the home-buying journey isn’t house hunting; it’s financial prep. Lenders want to see that you’re a reliable borrower. That means your credit, savings, income, and debt all come into play. The better your financial profile, the more favorable your loan terms.

So, how can you set yourself up for a great mortgage application?

1. Boost your credit

Your credit score plays a starring role in determining your first mortgage’s interest rate. A higher score improves your approval odds and could save you thousands over the life of your loan. 

A score of 680 or above generally opens the door to better mortgage rates. However, some government-backed loans allow for lower scores, so don’t think you’re locked out of buying a home if your credit score isn’t stellar.

Before applying, make sure to: 

• Review your credit report for errors
• Pay down revolving balances
• Avoid opening new credit lines or making large purchases 

2. Save up for a bigger down payment

Some mortgage programs offer low down payment options, but there are benefits to putting more money up front. A larger down payment lowers your loan balance, reduces your monthly mortgage cost, and may help you avoid paying private mortgage insurance (PMI). Even an extra few thousand dollars can make a major difference.

3. Calculate how much mortgage you can afford

It’s easy to get caught up in the excitement of house shopping, but just because you are preapproved for and can borrow a certain amount doesn’t mean you should.

Use a mortgage calculator to factor in the principal and interest, and don’t forget to include taxes, insurance, and maintenance fees as well. Typically, your monthly housing costs should be under 30% of your gross monthly income. Another common guideline is to keep housing costs around 28% with your total monthly expenditures not to exceed 36%. 

4. Get preapproved

Getting preapproved is a smart step. It gives you a clear understanding of how much you can borrow and shows sellers that you’re a serious, qualified buyer. Preapproval requires documentation and is a deeper look at your financial picture. 

Remember to have the following information handy:

• Income verification 
• Credit history or credit report 
• Asset statements 
• Debt analysis 

5. Find a reputable lender

To find a great lender for your first home purchase, ask friends or real estate agents for recommendations, check online reviews, and compare quotes. Look for lenders who communicate clearly, offer education (not pressure), and specialize in first-time homebuyer mortgage products.

Credit unions can be attractive alternatives over big banks as they frequently provide mortgage loans with low fees, great rates, and personalized service. 

And don’t forget that if a lender doesn’t have what you need or doesn’t seem to be much help, move on—you aren’t locked into anything until you sign on the dotted line. 

First mortgage: What to look for

Once you’re ready to shop for a mortgage, keep your eyes on the details. Terms, fees, and interest rates can vary widely from lender to lender, and the fine print matters. Here’s what you should look for in your first mortgage.

6. Look into different mortgage loan types

There’s more than one path to financing your first home. Choosing the right type of mortgage loan depends on your financial situation, credit history, and long-term goals.

Here’s a quick breakdown of the kinds of first mortgages you’ll find:

• Conventional loans – These are ideal for buyers with strong credit and a decent down payment. They often offer competitive rates and fewer fees.
• FHA loans – These loans are backed by the government and are well-suited for buyers with lower credit scores or minimal savings.
• VA loans – Available to eligible veterans, active-duty service members, and their families, VA loans offer 0% down and no PMI.
• USDA loans – Designed for buyers in qualifying rural areas, USDA loans often come with no down payment requirement.

The right mortgage structure can provide flexibility now and savings over time, helping you move into your first home without breaking the bank.

7. An affordable mortgage interest rate

Your mortgage interest rate directly impacts your monthly payment and the total cost of your home. Even a 0.50% difference can add up to thousands over the life of your loan.

Therefore, you should get multiple quotes for your first mortgage, and don’t hesitate to negotiate. Lenders are competing for your business. Make sure you’re getting a rate that reflects your credit profile, financial readiness, and personal needs.

H4: What are good first-time homebuyer mortgage rates?

In mid-2025, competitive first-time homebuyer mortgage annual percentage rates (APRs) were typically between 6% and 7%, though special programs like FHA or VA loans could offer lower rates for qualified applicants.

If mortgage rates are trending up when you’re applying, consider locking in your rate. A rate lock protects you from increases while your loan is processed.

H3: 8. A mortgage term and type that works for your budget

Mortgage terms usually range from 15 to 30 years. A 15-year loan means higher monthly payments but significantly less interest paid overall. A 30-year loan lowers your monthly cost but extends your repayment timeline (so you’ll pay more for the loan over its lifespan).

Choose a loan term that balances your current cash flow with your long-term goals. If you’re focused on lower payments now, a 30-year fixed-rate mortgage may make sense. If you want to build equity faster and want more flexibility in your payments, an adjustable-rate mortgage might be a good option for you.

H3: 9. Understand and compare fees

Lenders might offer attractive rates but tack on steep fees. Common charges include application fees, origination fees, processing fees, and even rate lock costs. These can quickly inflate your closing costs or increase your loan balance if you roll them into financing.

Ask for fee estimates or breakdowns from each lender you’re considering. This step will help you compare fees and make a truly informed decision. 

Start looking for a mortgage lender today

Getting a mortgage for the first time can feel daunting, but it can be empowering  when you employ the right tools and do your research. With preparation and support, you can secure a first mortgage that sets you up for long-term budget success and personal happiness. And remember, if you need assistance, you can always work with a Mortgage Loan Officer (MLO), who can guide you through the process. Take your time, ask questions, and don’t rush the process. Good luck!