2026 Top 5 First Time Homebuyer Tips | First Time Buyer Advice | First Time Homebuyer

you're thinking about buying your first home within the next say nine months and that's all great but there's about five things you have to know you just have to know before you get into the business of actually buying that home I'm going to cover all that in this video I've got some great videos in the past where I talk about loan programs best loan programs for you or the best way to get your cash to close down we're going to get more Elementary today than that we're going to get to the five most basic things you have to know today when you're buying a home and they're not what you think they are you'll be familiar with the topics but we're going to get into some nuances that you didn't know about they're going to be very important to you you're going to want to share this video with friends or family if they're thinking of buying a home in the coming months so as I like to say let's kick off this Rodeo right now hi folks I'm Kevin Fegan I'm the mortgage Patriot on your side nestled here in the Hill Country above San Antonio Texas serving proud Texans all you great folks all around the country another great one today because as always I've talked about all kinds of videos that are helpful to you I've talked about VA loans FHA Loans USDA loans I've talked about renovation loans I've talked about investment type of loans I've talked about how to build your credit rapidly how to pay off your mortgage rapidly all kinds of subjects on uh down payment assistance programs but I haven't done the foundational aspect and that's why I thought oh I better backtrack a little bit because I had some clients recently that have have been hurt by these issues so I want to cover the five most basic things that you need to know today when you're first buying a home so as I get into that content please hit the like And subscribe below that really helps bring bring those uh YouTube algorithms to the Forefront uh look down below hit that and let's get into that content right now let's look at all those five things individually I'll phrase them in the form of a question the first one is do I have a sufficient credit scores to buy a home I have a 635 score is that going to be good enough that doesn't necessarily mean just because you have a 635 for example that you qualify for a conventional or FHA there's more nuances to it it's not just the score we'll get into that number two do I have sufficient assets to purchase the house I've got $20,000 in my bank account and 401ks is that going to be enough to buy this house number three is my income sufficient is my household income sufficient I'm making along with my spouse $95,000 is that what an underwriter is going to be looking at is that the actual number they're going to be looking at the answer is no we're going to get the nuances once again there as well we'll focus on that when I get to that point and lastly you want to know once you do identify a house what is that going to be that estimated payment with the principal interest taxes insurance and HOA dues what is that estimated payment going to look like on a monthly basis you got to know that and then the very last the fifth thing is what is my cash to close figure what's the actual estimated cash to close am I going to write I'm gonna pull out my checkbook or wire money into a title company what is that amount going to look like is it gonna be$ 4,000 is it gonna be 12,000 gonna be $28,000 you have to know these things so let's break all those down one by one so question number one are my credit scores sufficient to be able to get a loan okay so if you're looking at Credit Karma app and your scores are say 650 or better or you're looking at your Bank of America app and they're at 700 that's all great because theoretically yes you can get a conventional loan at 620 or better you can get an FHA loan at 580 credit score are better but it's not just about the scores pay attention very carefully it's more than the scores we have to look at the entire trade history because we're looking for two things we're looking for collection items and we're looking for 30 day lates what am I talking about well collection items if you have on your report let's say you have a 700 score fantastic once again but you have three collection items one is $500 one is $1,000 and another one is $1,200 so that's $2700 worth of collection items you cannot have more than $2,000 aggregate $2,000 aggregate of collection items otherwise you cannot do an FHA loan so that knocks you out despite your scores so you have to negotiate uh some of these collections down the other thing to look at of course is 30-day lates number of 30-day lates FHA will not allow you to have more than just one 30-day late in the last 12 months prior to pulling the credit and you cannot have two 30-day lates over the prior 24 months of running the credit so if you've got for example three we pull the credit report and you've got three trade lines that have late histories of 30-day late items that happened you know last year in month 13 month 17 and month 22 for example you have three trade lines that are Beyond 30-day lates within a 24mth period you cannot get an FHA loan so it's not just about the scores it's about collection items and number of 30-day lats very important to know okay question number two do I have sufficient assets to be able to close on a loan so let's say for example you've got $5,000 in your checking account you've got $6,000 in your savings you got $4,000 though in nonbank cash in other words it just cash at home stuff we used to call Mattress money so that's 15,000 and you've got 15,000 roughly in a 401k so you think you have $30,000 total and you need say $22,000 cash to close uh bad news is you don't have $22,000 in the eyes of Underwriters they're going to look that they don't count they do not count cash that you have at home you have to be able to at some point those has to be seasoned it has to be put back into the bank and shown because otherwise they there might be some potential laundering issues going on so that $4,000 you have as mattress money needs to be put into a bank account long before you close it has to be seasoned for at least 60 days typically okay and also the $115,000 you have on your 41k doesn't count as $155,000 what does it count as it counts as about half of that usually they take a factor of about 40% of that sometimes maybe up to 50% so your 15,000 is really about 7 and a half thousand uh and that just counts towards Reserve so it's more complicated than just adding up you know liquid assets and maybe 401K so let me help you with that there's going to be a formula involved and also depends on your own employer rules for distributions out of your 401k sometimes you get taxed on that sometimes you do not get taxed on that much more complicated than just adding up the the raw numbers let's look at question number three do I have adequate household income to be able to buy a house this is a complicated one this is where everybody messes up and these are National guidelines I'm about to quote for you so we're going to break it up into hourly wages or salary wages in an hourly wage if you're collecting hourly rate you have to have a two year history let's say you're an engineer and you're and you have a you have an hourly wage of whatever it is it's coming out to about $60,000 a year okay you made $60,000 a prior year this year you're tracking along at $80,000 you do not get credit for $80,000 you have to average your last 24 months of history of wages so you're going to average the first year of $60,000 in the second year of $80,000 that's going to give you an average of 70 you're earning 80 right now but you're only getting credit for 70 because that's the average of the 24mon period and overtime commissions bonuses they have to have a 2-year history let's say you're making close to $60,000 as your hourly base but you have overtime in your first year of $10,000 you made $70,000 in the prior year this year you're really killing it because you have got all this overtime say wow Kevin I'm tracking out about $100,000 this year you don't get credit for $100,000 you have to average those two years of of overtime so you can have 70 and a hundred your average together is gonna be 85,000 that's what the underwriters are going to look at to qualify you for a home so again it's not about what you earn now in an hourly environment it's what you earn what you average earn over a 24mth period I hope that makes sense to you regarding salary based income this much more simple you get exactly what your salary is so forget the two- year history in an hourly rate scenario doesn't apply at all as salary you come out of uh school you're an engineer here in our example you have a salary not an hourly wage a salary of $60,000 even without the two-year history that's what you get you're allowed up to that immediate salary level so much more simple than hourly wages hope that makes sense as well so now you know the first three things you need to know which are credit scores and what goes into your trade lines if you've had any collections to what extent you have maybe 30-day lates we have to discover all that you understand that now you understand that your what your asset levels are going to look like with my help and we're going to look at what your house income looks like because it's not again what you're earning now it's over a 2 more4 month period if you're in hourly or if you're in a salary we we look at what you have right now so with all that if you identify we tell you great you can buy a home you start to shop for a home and now you have a home identified you have to know two more things you have to know hey what's this going to cost me per month I'll help you with that you're gonna I'm going to show you a mortgage chart it's going to look kind of like this we're going to look at about five numbers we're going to bring them all together and that's the monthly number that you're going to be expecting to pay as you rock along in this home so and those numbers are your principal and interest your property taxes on that property your estimated property insurance on that property uh the estimated Insurance the monthly mortgage insurance if you don't come out of pocket for 20% usually it's less than that so you pay some form of insurance on a monthly basis and if there's any HOA dues all five of those numbers I'm going to show you and we're going to come up to a number an estimated number it's can be pretty close of what your monthly mortgage payment in full will look like and you need someone like my myself to help you with that and after we look at all these numbers together and come up with a estimated monthly payment I'm going to do a very important thing for you I'm going to give you a pre-approval a pre-approval letter and that's going to be issued by a loan officer in this case me and it's going to show that yes you've shown me your assets you've shown me what your income is in the form of pay stubs and I've run the actual credit report I've done all those three things we talked about at first and so you are preapproved to buy this home you can afford it you're qualified for it you're ready to go so the pre-approval letter is instrumental and you give that to your agent and the Agents probably going to give it to a the listing agent of a home that you're interested in they're going to ask for an offer you're GNA submit an offer to that listing agent through your agent and they're going to be asking for a pre-approval letter which again I'll be providing for you so don't worry about it I got you covered there let's go on to that last thing you need to know is the cash to close what do you actually get to write as a check when you buy that home so you know about what you'll be paying on a monthly basis and now you need to know hey can I how much am I writing a check for at closing when I go to the title company and actually sign the documents okay well normally as all you uh Patriot Nation folks know I like to talk about cash to close in the metaphor of three different buckets and your first bucket is your down payment what percentage of down payment is that so on a $300,000 house you have an FHA loan that's three and a half percent down that's $10,500 in that first bucket that's your down payment bucket your second bucket is your transaction cost that's the processing the underwriting the title fees appraisal inspection fees go on and on the actual cost of doing the transaction that bucket on the $300,000 house in Texas anyway is gonna be about $5,500 so now you're up to $166,000 bucket number three is your escros you have to build escrow accounts you have to check for but in a lot of my videos I talk about and I specialize in bringing that cash to close down so I have lots of videos on how on strategies that I use combining usually seller concessions and down payment assistance and maybe even a special grants that sometimes I have to bring down that in our example here our $119,000 example we bring it down to under 10,000 sometimes even under $55,000 so you're literally write it a check on about a $300,000 house for sometimes less than $5,000 can't do that all the time but I want to tell you that it's possible so the cash to close figure is is a figure that's going to change work with me and we'll find out what that's going to look like because again we're going to combine some strategies that's going to be necessary to get that figure down and let me uh help you with that so I'm the mortgage P Patriot on your side let's make it a great one bye-bye END OF TRANSCRIPT