Buying Your First Home in Pennsylvania
Buying your first home is exciting, but it can also feel overwhelming. How much can you afford? How much money will you need upfront? What kind of mortgage should you choose? And where do you even begin?
At BMC Keystone, we help first-time homebuyers throughout Montgomery, Bucks, Chester, Delaware, Berks, and Philadelphia counties navigate the mortgage process with confidence. As an independent mortgage broker, we work with multiple lenders to find financing options that fit your needs, rather than limiting you to the loan programs offered by a single bank.
You don't need to have everything figured out before talking to us. Whether you're just starting to think about buying a home or you're ready to get pre-approved, we're here to help you understand your options and take the next step.
Where Do You Start When Buying Your First Home?
Before you start browsing homes online or scheduling showings with a real estate agent, it's a good idea to understand what you can comfortably afford and what financing options are available to you.
Your first step should be a conversation with a mortgage professional.
At BMC Keystone, we'll help you look at the financial side of buying a home. From there, we can help you determine:
- How much house you can realistically afford
- How much money you may need for a down payment and closing costs
- Which mortgage programs may be a good fit
- Whether you qualify for first-time homebuyer assistance programs
- What steps you can take now to improve your buying position
You don't have to be ready to buy tomorrow to have this conversation. In fact, talking with us several months before you plan to purchase can give you time to improve your credit, build your savings, or address anything that might affect your mortgage approval.
How Much Money Do You Need to Buy Your First Home?
There are three main expenses to plan for:
Down Payment
One of the biggest misconceptions about buying a home is that you absolutely must have 20% for a down payment. In reality, many first-time homebuyers purchase homes with much less, and some loan programs require little or no down payment for qualified buyers.
Depending on the loan program and your qualifications, you may be able to purchase a home with as little as 3% or 3.5% down. Eligible VA and USDA borrowers may qualify for zero-down-payment financing.
Closing Costs
In addition to your down payment, you'll need to account for expenses such as buyer agent commission, lender fees, title insurance, settlement fees, appraisal fees, home inspection, Pennsylvania transfer tax, property tax, and homeowners insurance.
Other Expenses
It's also important to think about the money you'll need to cover expenses after you get the keys. Moving expenses, repairs, furnishings, and unexpected homeownership costs can add up.
Can First-Time Homebuyers Get Financial Assistance?
Yes. Pennsylvania offers homebuyer assistance programs that may help eligible buyers with down payments and closing costs. Some programs are based on income, purchase price, location, or the type of mortgage you're using.
At BMC Keystone, we can help you explore available programs, understand the eligibility requirements, and determine how much money you may actually need to bring to closing.
Do I Qualify for a Mortgage?
You don't need perfect credit, a large income, or years of savings to qualify for a mortgage.
When determining whether you qualify for a mortgage, lenders look at several factors:
- Credit history and credit score. Your credit helps lenders evaluate how you've managed debt in the past. A higher score generally gives you more financing options, but some mortgage programs accommodate buyers with lower credit scores.
- Income and employment. Lenders want to know that you have a reliable source of income to make your monthly mortgage payments. You don't necessarily need to have worked for the same employer for years, and self-employed buyers can qualify too.
- Existing debts. Car payments, student loans, credit cards, child care, nd other monthly obligations affect how much you can borrow. Lenders use your debt-to-income ratio to determine whether a mortgage payment fits within your financial situation.
- Savings and available funds. You'll need to show where the money for your down payment and closing costs is coming from. Depending on the loan program, gift funds and down payment assistance may help cover some of these expenses.
What If You're Not Ready to Qualify Yet?
If your credit needs improvement, your debt is too high, or you need additional savings, we can help you identify what's holding you back and what steps may improve your chances of qualifying.
Don't assume you won't qualify without exploring your options first. As an independent mortgage broker, BMC Keystone has access to multiple lenders and loan programs, giving us more ways to help you find a mortgage that fits your financial circumstances.
Mortgage Loan Programs for First-Time Homebuyers in PA
Some loan programs offer lower down payment requirements, while others may be better suited to buyers with strong credit, limited savings, or specific financial circumstances. We'll explain the differences in requirements, interest rates, and overall borrowing costs so you can make an informed decision.
Explore some of the mortgage programs available to Pennsylvania first-time homebuyers below.
Homebuyer Advantage Program
Renovation Loans for Purchase or Refinance
Low Money Down Loans, Below Market Rate Loans
Buy Downs-A Temporary Mortgage Rate Reduction
BorrowSmart Loan Program with Downpayment Assistance
VA Loans
The Homebuying Process: Step by Step
Once you understand your budget and mortgage options, you're ready to move forward with buying your first home. Here's what to expect along the way.
1. Get Pre-Approved for a Mortgage
Before you begin seriously shopping for homes, we'll help you obtain a mortgage pre-approval. This shows sellers that you've taken steps toward securing financing.
2. Find a Home and Make an Offer
With your pre-approval in hand, you can find homes that fit your needs and budget. When you find the right property, your agent will prepare an offer and negotiate the terms of the purchase.
3. Complete Your Mortgage Application
Once your offer is accepted, we'll finalize your loan application and mortgage program, and provide the documentation your lender needs. We'll also review the numbers with you so that you understand the interest rate, monthly payment, and closing costs.
4. Appraisal, Underwriting, and Final Approval
Your lender will verify your financial information and evaluate the property to make sure it meets the loan requirements. You may be asked to provide additional documents during this stage. BMC Keystone will work with you and the lender to keep the process moving toward final approval.
5. Final Walkthrough and Closing
Before settlement, you'll receive a Closing Disclosure outlining the final terms of your mortgage and closing costs. At settlement, you'll sign the required documents, pay the remaining funds due, and receive the keys to your new home.
We're With You From Pre-Approval to Closing
Buying your first home involves a lot of moving parts, but you don't have to coordinate the financing on your own. BMC Keystone will guide you through the mortgage process, explain what comes next, and help you address questions or challenges along the way.