Essential Tips for First-Time Homebuyers

James

So, Sean, buying your first home sounds like this massive mountain to climb, right? But there’s, like, these programs out there—HomeReady, HomePossible—that make it easier to actually get started. What’s so special about them?

Sean

Right, James, these are really excellent programs for first-time buyers looking to ease some of the financial pressure that comes with purchasing a home. HomeReady and HomePossible, for example, allow lower down payments—just 3%, instead of the standard 5% minimum you’d find with conventional loans. That alone opens the door for so many folks who’ve been saving up.

James

Wait, just 3 percent? That’s literally huge. And, correct me if I’m wrong, but doesn’t it help with mortgage insurance costs, too?

Sean

Exactly, it does. These programs also offer reduced mortgage insurance premiums, which translates to smaller monthly payments over time. Plus, with no loan-level price adjustments—or LLPAs—that are typically tied to down payments or credit scores, buyers really benefit from better interest rates.

James

That’s awesome. So, is there a catch? Like, who’s eligible for these?

Sean

Well, there are some qualifications. First, you need to be a first-time homebuyer. And that doesn’t just mean someone who’s never owned a home—it’s defined as not having owned a home in the last three years. Second, your income has to be below 80% of your area’s median income, or AMI. That’s a big factor. If you combine incomes for a joint loan, both incomes together have to stay under that limit.

James

Oh, yeah—AMI, right. That’s based on where you’re buying the house?

Sean

Exactly. And the income limits vary by county. A good example is here in Georgia, where counties like Cobb, Fulton, and Gwinnett have an 80% AMI set at $84,880. It’s worth checking eligibility for your specific location, though.

James

Gotcha. But, what if I—like, hypothetically—make more than 80% AMI? Am I just totally out of luck?

Sean

Not at all. If your income falls under 100% AMI, you might not qualify for HomeReady or HomePossible, but you still avoid price adjustments on conventional loans. That means no penalty for credit scores or down payment amounts, which still puts you in a better position than traditional home buyers.

James

That’s pretty solid, honestly. But, okay—switching gears a bit—FHA loans. They’re another solid option, right?

Sean

Absolutely. FHA loans are great for buyers, first-time or not, because they offer flexibility. You need just a 580 credit score to qualify, or even lower sometimes with manual underwriting. And their debt-to-income ratio requirements are also more lenient. They go up to as high as 57% in some cases, which is much higher than the typical cutoffs for conventional loans.

James

Okay, wow, but—and I’ve heard this before—FHA is only for first-time buyers, right? Or is that just one of those urban myths?

Sean

That’s a myth, James. FHA loans aren’t limited to first-time homebuyers—they’re open to anyone. It’s just that they tend to be attractive to first-timers because of those easier qualifying standards. Another misconception is that FHA loans always have the lowest down payment option. In reality, those HomeReady and HomePossible programs I mentioned earlier can go lower—down to 3%—whereas FHA requires 3.5%.

James

Oh, wow, so it’s, like, a lot more about your specific situation than just being a “first-timer.” That’s cool.

Sean

Definitely. Every buyer’s situation is unique, and that’s why reviewing all the options with someone who knows what they’re doing can make a world of difference.

James

Right, so FHA loans have those flexible requirements, but what about down payment assistance programs? Reliant’s got some pretty cool options in that area too, right? I mean, is it really like free money to help you buy a house? Sounds a little too good to be true.

Sean

It does sound appealing, doesn’t it? But, actually, it’s true. Reliant Mortgage Solutions offers multiple down payment assistance programs. These programs can grant buyers anywhere from 1% to 3% of the home price, completely free—no repayment required. It’s a game changer, especially for folks who’ve spent years saving for that initial payment.

James

That’s insane. Like, zero strings attached?

Sean

Pretty much. Of course, there are eligibility requirements. Buyers need a minimum credit score of 620, and the grants are available for various property types—single-family homes, condos, and multi-units up to four. It’s designed to make homeownership accessible to as many people as possible.

James

Okay, wait. So it’s not just for picture-perfect credit profiles or first-timers?

Sean

Exactly. The programs are inclusive and adaptable. For FHA loans, for instance, we also provide grants, both forgivable and repayable, which are tailored to specific buyer needs. And for people with credit scores as low as 580, those options are still accessible. It’s really about creating opportunities for anyone wanting to own a home.

James

Love that. This is way more approachable than I realized. Got any real-life examples?

Sean

Absolutely. Take Sarah, for instance. She was a schoolteacher who never thought she could afford a house on her own, especially with her student loan debt. But through Reliant’s program, she qualified for a 3% grant and a 30-year fixed loan. That put her in a position to buy her dream condo without dipping into her emergency savings. And now? She’s a proud homeowner.

James

That’s such an uplifting story. Feels good knowing people out there are actually getting over these huge financial hurdles.

Sean

Absolutely. These programs are here to help bridge that gap. It’s not just about owning a house—it’s about empowering people to achieve their goals without taking on unnecessary financial strain.

James

Honestly? More people need to hear about this.

James

Speaking of empowering people, Sean, let’s also cover the flip side—those “Oh no” moments people totally regret during the mortgage process. What should buyers watch out for?

Sean

Sure thing, James. Some of the biggest missteps happen when buyers don’t realize how sensitive the process is. For instance, changing jobs mid-process—it’s a huge red flag. Lenders need stable employment history, and making changes before closing can really jeopardize your loan approval.

James

Wait, even if the new job pays more, it’s still risky?

Sean

Exactly. Lenders do a verbal verification of employment at both the start and end of the process—it’s kinda their way of double-checking everything. A new job, even if it pays more, throws a wrench in the stability factor, and trust me, that’s not what lenders want to see.

James

That’s wild. What else should people steer clear of?

Sean

Applying for new credit is another major no-no. Say you’re tempted to open a store credit card to grab some new furniture for your place—don’t do it. Even a soft pull on your credit can raise alarms, and any big change to your debt-to-income ratio could disqualify you for the loan.

James

So forget the couch and dining set until you’ve actually got the keys in hand?

Sean

Exactly. It’s all about holding off on big financial moves until after closing. That also includes resisting the urge to tap into your down payment savings. The funds in your accounts need to be stable and seasoned, meaning they’ve been sitting there for at least two months. Anything else raises questions.

James

Okay, so now I’ve gotta ask—got any horror stories to share?

Sean

I do. I once had a client who co-signed a loan for their cousin during underwriting. On paper, everything was fine initially, but when the lender did their final credit check, the new liability bumped their debt-to-income ratio over the limit. They lost their loan approval just days before closing. It was heartbreaking but a huge lesson for them—and hopefully for anyone listening right now.

James

Oh man, that’s brutal.

Sean

It was. But it drives home the point: during the mortgage process, less is more when it comes to financial changes. Keep things steady, ask before acting, and avoid any surprises for the lender.

James

Honestly, it’s kinda nerve-wracking! But this advice could save so many people from a ton of stress—and maybe even losing their dream home.

Sean

That’s the goal, James. Understanding what not to do is just as important as knowing how to approach the financing process. And, with that, I think we’ve covered some of the big ones.

James

For sure. Critical stuff. Alright, folks, that’s all we’ve got for today. Thanks for listening—and remember: don’t co-sign! We’ll catch you next time.