9 Mortgage Tips for First-Time Home Buyers

Your first home isn’t just an important financial move, it’s also most likely where you’ll host friends, plant your first garden, or finally get that dog you’ve always wanted. But before you buy, there are a few key things to know that can make the process smoother.

Here are nine practical mortgage tips for first-time home buyers can help you focus less on paperwork and more on planning life in your new place. We’ll cover how to check your credit, save for upfront costs, compare lenders, and use tools like a mortgage loan calculator¹ to understand affordability.

Tip 1: Check your credit early

Your credit score can directly affect the mortgage rates and loan options available to you. Lenders use credit scores to assess risk. So even a small change in your score can impact your monthly payments.

Start monitoring your credit score months before applying for a mortgage. If you don’t have what’s considered “good” credit, you may be able to take steps to improve your score before you apply to get the most favorable rates.

EarnIn’s Credit Monitoring² tool can help you track your score and spot changes early. The higher your score, the more affordable your mortgage payments may become.

Tip 2: Save for a down payment and other upfront costs

First-time home buyers often focus only on the down payment, which averages 6%-9% of the purchase price according to the National Association of Realtors. But don’t forget there are other upfront costs, too, including:

Appraisal. An appraisal is a professional estimate of a home’s value that your lender requires before finalizing your mortgage. It may cost several hundred dollars, depending on the type of loan you’re applying for, the size of the home, the location, and other factors. But getting an appraisal is critical to ensure the home is worth what you’re paying (and what the bank is lending).
Inspection. Home inspections can also cost several hundred dollars, depending on the size of the property. But what an inspector uncovers could save you much more in the future.
Moving expenses. Factor in how much it costs to pack everything up, rent a moving van, and hire workers. This amount may be even higher if you’re moving to another state.
Closing costs. Closing costs usually run between 2% and 5% of the loan amount. On a $250,000 mortgage, that could work out to be $5,000 to $12,500 in upfront fees.

Starting early is best when it comes to saving for a house. And making saving part of your budget now can help make sure you’re ready for both expected and unexpected costs when the time comes to buy.

Tip 3: Use a mortgage calculator to set a budget

Before you start house hunting, run your numbers through EarnIn’s mortgage calculator.¹It can help paint a picture of how much you might pay per month based on the cost of the house you want to buy.

Say you make $50,000 per year and you’re interested in buying a house that costs $200,000. If you’ve been saving and are able to put $40,000 down, or 20% of the purchase price, your approximate monthly mortgage payment would be $1,011.31,* according to EarnIn's mortgage calculator.¹

With the mortgage amount in mind, you can factor in additional costs, like Homeowners Association (HOA) fees or property taxes, to calculate the total cost of ownership. If the total amount fits comfortably into your financial plan and budget, you can feel more confident as you begin the search for your dream home.

*Based on a 30-year fixed-rate mortgage at ~6.5% interest, assuming 20% down. This example is for illustration only. Use EarnIn's mortgage loan calculator for personalized estimates.

Tip 4: Compare lenders and loan types

Before you commit to a particular lender, it’s wise to shop around with multiple lenders, comparing interest rates, fees, and loan terms. Doing so may end up helping you secure the most favorable rate and terms.

Common loan types include:

Conventional loans. Conventional loans through private lenders can be fixed-rate (you pay the same interest rate for the life of the loan) or adjustable-rate (the interest rate can rise or fall with broader economic changes) and often have competitive interest rates and flexible loan terms.
FHA loans. A Federal Housing Administration (FHA) loan is designed for first-time home buyers. In partnership with certain lenders, a first-time homebuyer may be able to purchase a property with low down payments, low closing costs, and easy credit qualifying.
VA loans. A Veterans Affairs (VA) home loan is a government-backed option for qualifying buyers, including veterans, service members, and eligible surviving spouses. VA loans may help buyers purchase a home with no down payment, no private mortgage insurance (PMI), and competitive interest rates.

Finding the right loan option can mean big savings over time, so it can be worth spending time researching and reviewing options.

Tip 5: Understand interest rates and points

Even a fraction of a percentage point on your rate can change your monthly mortgage payment significantly. Some lenders also allow you to buy “points,” which means paying extra upfront to secure a lower rate.

Before you finalize your mortgage rate, with or without points, it’s important to run the numbers: Will paying points save you money over the life of the loan or is it better to keep cash on hand for emergencies?

Tip 6: Build your homebuying team

Thankfully, buying your first home isn’t a solo project. You’ll often have a team of professionals helping you along the way. At minimum, you’ll work with a real estate agent to guide your search and negotiations, a lender to secure financing, and a closing agent or attorney to handle the legal side.

Depending on your situation, you might also lean on an insurance agent or even a financial advisor. You may already know people who hold these professions, or you can ask friends, family, or neighbors for trusted recommendations. Choosing the right people can make the process smoother, help you avoid costly mistakes, and give you confidence that you have a team of professionals looking out for your best interests.

Tip 7: Get preapproved before house shopping

Before you start scrolling Zillow or touring open houses, it helps to know exactly what you can afford. That’s where mortgage preapproval comes in.

Preapproval is when a lender reviews your income, credit, and debt to give you a letter that says how much they’re willing to lend you. It’s not the final loan, but it’s a strong estimate of your budget.

Why it matters:

You shop smarter. Instead of falling in love with a home that’s out of reach, you’ll know your realistic price range from the start.
You look serious. Sellers and real estate agents take you more seriously because they know a lender has already vetted you.
You move faster. In a competitive market, being preapproved lets you make an offer right away without waiting on paperwork.

Think of it as getting the green light before you hit the gas. Preapproval can save you time, energy, and disappointment once you start looking at homes.

Tip 8: Don’t overextend your budget

A general tip for first-time buyers: Housing costs shouldn’t exceed approximately 30% of your gross monthly income.

Not sure how a mortgage might fit your finances? Use EarnIn's budget calculator¹ to “stress-test” your budget. Make sure you can comfortably cover mortgage, utilities, insurance, and maintenance — not just the loan itself.

Tip 9: Build an emergency buffer to use after you buy

Owning a home comes with surprise costs, like a roof repair or a broken appliance. Setting aside an emergency fund can keep you from turning to credit cards or loans in a pinch.

Even small, regular contributions to a savings account can make a big difference over time.

Take it step by step

Buying a home is a journey. By checking your credit, saving smart, comparing lenders, and running your numbers through free tools like EarnIn’s calculators¹, you can move forward with clarity and confidence.

And, if you ever find yourself stretched thin between paychecks, tools like EarnIn’s Cash Out³ can help bridge short-term gaps.

With Cash Out³, you can get up to $150/day, with a max of $750 per pay period of your earned wages, with no mandatory fees. Instead, you can just tip what you think is fair.⁴ There’s no credit check, and no impact to your credit score. And it’s easy to sign up in minutes.

The road to homeownership may feel long, but every smart financial step you take now can get you closer to your goal.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

This Blog was sponsored by EarnIn. While the author received compensation, the information shared is grounded in independent research and intended to provide helpful and accurate guidance to readers.

EarnIn is a financial technology company, not a bank. Banking services are provided by our bank partners on certain products other than Cash Out.

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The calculations provided are based on estimates and should be used for informational purposes only. Please be aware that comparisons may not be 100% accurate. The insights and data presented do not constitute financial advice, and we recommend consulting with a qualified financial advisor for personalized guidance.

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Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don't be surprised if your lender uses a score that's different from your VantageScore 3.0. Learn more.

³
A pay period is the time between your paychecks, such as weekly, biweekly, or monthly. EarnIn determines your daily and pay period limits (“Daily Max” and “Pay Period Max”) based on your income and financial risk factors as outlined in the Cash Out Maxes section of our Cash Out User Agreement. EarnIn reserves the right to adjust the Daily Max and Pay Period Max at its discretion. Your actual Daily Max will be displayed in your EarnIn account before each Cash Out.

EarnIn does not charge interest on Cash Outs or mandatory fees for standard transfers, which usually take 1–2 business days. For faster transfers, you can choose the Lightning Speed option and pay a fee to receive funds within 30 minutes. Lightning Speed may not be available at all times and/or to all customers. Restrictions and terms apply; see the Lightning Speed Fee Table and Cash Out User Agreement for details and eligibility requirements. Tips are optional and do not affect the quality or availability of services.

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Tips go to EarnIn and help us provide tools such as Credit Monitoring for free and keep Lightning Speed fees low. Your service quality and availability aren’t affected by whether you tip or not.