By Jon Gould-Knight, January 21, 2025
By Jon Gould-Knight, January 21, 2025
"homeownership can be more than just something our parents did because the world was different"
If you’re dreaming of buying your first home but feel like the odds are stacked against you, let me be the first to say: It’s not impossible! The truth is, with the right resources and support, homeownership can be more than just something our parents did because the world was different (it was but we still have options). There are countless programs designed specifically for first-time homebuyers to help make the process less daunting and more affordable. Let’s dive into the essentials of getting started and explore some fantastic resources for first-time buyers in Washington and Oregon.
Before giving up on your home-buying dreams and committing to a life of foraging and reposting perfect memes across the internet, I urge you to take some time, take a look at your financial situation, open yourself up to the possibility of utilizing one of the many first-time homebuyer programs available to yourself, and reach out to a lender for a pre-approval. If it still isn’t happening for you, then make a plan for how it will get better, share all the memes you want, and check in again in a year or so. Here are the first 4 simple things to get you started.
Your credit score is a key factor in determining the mortgage you qualify for and the interest rate you’ll receive. A score in the “good” range (670+) opens up the good opportunities and they just get sweeter the higher you go, but don’t worry if your score is lower—there are still plenty of options available. To check your credit score and review your report for errors or discrepancies, visit AnnualCreditReport.com, where you can access your report for free once a year.
Knowing what you can comfortably afford will not only help narrow your home search, but give you a head start on how to talk to your lender. Some folks will look at the home prices around them, determine what house they want, then go to a lender and say “Hey! Can I buy a $450,000 house?” Many lenders will say “Yes!” And everybody gets excited until the monthly payment comes through at $1000 more than you have been paying for rent because you have very little down and a high interest rate and the lender tacked all that onto the monthly payment instead of discussing options. You feel cheated and lied to and we are back to the memes. If you start with an “I want to pay around $x per month” it can actually open up wider possibilities for you because your lender can shift things around. You can learn about options that may have lower interest at the start to get you to your number but go up steadily if you’ve got an amazing and secure job with standard raises and can plan for it.
Try this, use your current rent as a baseline. Can you comfortably stretch it a little to build equity instead of a landlord’s portfolio? Factor in renters insurance, utilities, and property tax savings like mortgage interest deductions. Plus, unlike rent, which only goes up, a mortgage is yours to control—and refinancing is always an option.
Potential tip: Do you have large monthly debt payments? It might make sense to stretch what you can afford by paying off high-interest credit cards with some of your down payment savings and contributing less down. With some of the programs featured in this blog that require smaller down payments, you might save more on eliminated debt payments than you would pay in PMI.
Online mortgage calculators can help you estimate monthly payments based on loan amounts and interest rates. However, be mindful that these tools often don’t include additional costs like closing costs, property taxes, and home insurance, which can add $200-$400 to your monthly expenses. I personally like using Mortgage News Daily’s calculator, which allows you to account for all these variables.
Here’s an example of what a monthly payment could potentially look like:
This fictional scenario is based loosely on a two-bedroom, one-bath, 1,000-square-foot home in Washington.
The traditional 20% down payment allows you to avoid private mortgage insurance (PMI) and achieve lower monthly payments (a prime example that it’s expensive to be poor). However! Many programs allow for much lower percentages, like 3-5%, with that added PMI which sometimes is only $100-$200 a month. And once your equity in your house reaches 20% of its value, you can refinance and drop that pesky PMI at that time! Let’s follow up on the outlined example above. Imagine that after a year or two, your house value has increased to 400,000, and you have made $10,000 of principal payment, you now own 20% of your home ($42,000 in equity)! You can refinance and remove that PMI to bring your monthly down to around 2,650/month (and maybe further if rates go down by then as well).
Now that you have a clear idea of your financial strengths, check out this smattering of first-time home buyer programs I have collected for you below. There are likely more than these out there and at the end of the day, your mortgage broker can help determine which works best for you as they will have a much more inclusive look into your finances than I ever could, but if I could give you a pre-lender step, it would be this. Consider what you gathered about your financial information. What are your strengths? Do you have a great income with increasing raises but not much savings? Do you have a low income but low debt and a decent credit score? Etc. take a look at the programs below and see what sounds good! You can find more information about each using the attached links and as always, if you have any questions or would like to be connected to a lender or program specialist, shoot me a text or an email!
Below are some lenders I have worked with that I trust to handle programs discussed in this blog or even just a great conventional loan!
Navigating the world of homeownership for the first time can feel overwhelming, but you don’t have to go it alone. You don’t even have to remember a single word of what you just read! If you take anything from this blog, simply know that homeownership is more possible than many people think and I, as your Real Estate Broker and guide, am here to help you sort it out from the very beginning! From understanding your financing options to connecting with the right lender and making sense of the jargon, I’m here for you and am happy to chat and answer questions any time.
Feel free to reach out to me with your questions or to schedule a consultation. Together, we’ll make a plan tailored to your unique circumstances and goals. You can reach me at jon@cominghomepnw.com or follow me on Instagram at @cominghomepnw. Let’s get you one step closer to unlocking the door to your first home!
Disclaimer: I am not a mortgage lender, financial advisor, or directly affiliated with any of the loan programs mentioned in this blog. The information provided here is for general informational purposes only. Please independently verify program details and consult with qualified lenders or financial professionals to ensure they meet your specific needs.