Buying a home is exciting—until you realize it’s basically like applying for a long-term relationship with a bank. And let’s be honest: nobody wants to commit to something for 30 years without knowing what they’re signing up for.
Whether you're a first-time buyer or just rusty on the mortgage game, this guide will walk you through the 15 most important things you should know—served with a side of humor and a healthy dose of get-it-together realism.
1. Your Credit Score Is Basically Your Dating Profile for Banks
Before a lender says “I do” to your mortgage application, they check your credit score like it’s your Tinder profile. A high score? You’re responsible, attractive (financially speaking), and a low risk. A low score? Let’s just say… your options get limited.
Pro tip: Get your credit report (free from AnnualCreditReport.com), fix any errors, and pay down high balances. Credit scores above 700 = good. Above 740 = you’re flirting with elite rates.
2. Your Debt-to-Income Ratio (DTI) Is the Buzzkill You Can’t Ignore
You could earn six figures, but if you're spending most of it on car payments, student loans, and late-night Amazon splurges—lenders will be wary. Your DTI shows how much of your income is already spoken for.
Ideal DTI: Under 36%. Lenders want to know you can pay your mortgage and still buy groceries.
3. No, You Don’t Need 20% Down (But It Helps)
Contrary to popular belief, you don’t have to slap down 20% upfront to buy a home. There are options with 3–5% down (hello, FHA), but putting 20% down helps you skip the joy of Private Mortgage Insurance (PMI) — basically a fee for not being rich enough.
Translation: Less money down = more monthly costs. It’s a trade-off. Choose your adventure.
4. Pre-Approval Is Sexy. Pre-Qualification? Not So Much.
A pre-qualification is a polite "maybe." A pre-approval is a bank saying, “We’ve seen your stuff. We like it. Let’s talk numbers.” It carries weight with sellers, shows you're serious, and helps set a realistic budget.
Tip: Get pre-approved before you fall in love with that Pinterest-perfect bungalow.
5. Fixed vs. Adjustable: Pick Your Poison Wisely
Fixed-Rate Mortgage = the same payment every month (stability lovers rejoice).
ARM (Adjustable-Rate Mortgage) = low rates now, possible “ouch” later.
If you plan to stay put long-term, fixed is usually safer. If you're moving in a few years or feeling lucky, an ARM might save you upfront cash.
6. Don’t Forget the Closing Costs (They’re Like the Fine Print at the Bottom of a Menu)
You saved up your down payment—awesome! But surprise! Closing costs (appraisals, inspections, title insurance, lender fees, etc.) can run 2–5% of the home’s price. On a $300,000 home, that’s $6,000–$15,000.
Lesson: Budget for more than just the price tag.
7. Shop Around for Lenders Like You’re Buying a Used Car
Don't just say yes to the first bank that gives you a rate. Compare rates, fees, and loan terms from at least 3–5 lenders. A 0.25% difference in interest could save (or cost) you thousands over the life of the loan.
Also, rates change daily. Timing is everything.
8. That House Price Isn’t Your Real Budget
Just because you’re approved for a $400,000 loan doesn’t mean you should spend it all. Don’t be mortgage-poor. You want money left over for life—emergencies, travel, surprise vet bills, tacos on Tuesdays.
Set a mortgage payment you’re comfortable with, not one that stretches you thin.
9. Lenders Will Snoop (A Lot)
Get ready to share: pay stubs, bank statements, tax returns, even explanations for random $200 Venmo transfers (yes, really). Mortgage underwriters are part detective, part judge.
Rule of thumb: If you can’t explain it, don’t do it until after closing.
10. Lock In Your Interest Rate—Don’t Get Cute
Interest rates can bounce like a toddler on a sugar high. If you like the rate you’re offered, lock it in. Waiting to “see if it drops” is a gamble, and let’s be honest—are you really that lucky?
11. Don’t Change Jobs or Buy a Car Mid-Process (Seriously, Don’t)
Lenders want consistency. Quitting your job, opening new credit cards, or financing a new SUV while waiting for loan approval is like switching lanes during a driving test. Risky, and possibly deal-breaking.
12. Yes, You’ll Still Pay Property Taxes and Insurance
Your mortgage payment isn’t just the loan—most include taxes and insurance, tucked neatly into your monthly bill. And these costs can go up annually, even if your mortgage doesn’t.
Translation: Factor in the full PITI (Principal, Interest, Taxes, Insurance), not just your loan.
13. An Inspection Is Your New Best Friend
That charming fixer-upper might be hiding mold, bad wiring, or raccoons in the attic. An inspection helps you find the ugly before you sign the dotted line.
Don’t skip it. Even if it costs a few hundred bucks. It could save you thousands.
14. You Can (and Should) Negotiate Everything
Think buying a home is a take-it-or-leave-it deal? Think again. You can negotiate:
*Price
*Repairs
*Closing date
*Even who pays what at closing
Bring your inner haggler. Every dollar you save counts.
15. Your First Mortgage Doesn’t Have to Be Your Last
You’re not stuck forever. Refinancing is a thing. So is moving. So is paying off your loan early if you hit the lottery or go full minimalist.
The key? Start with a smart, sustainable plan. Your mortgage should help you build wealth, not bury you in it.
Final Word: Your Mortgage, Your Rules (Kind Of)
At the end of the day, getting a mortgage is adulting at its highest level. It's paperwork, pressure, and financial vulnerability all rolled into one. But it's also the first step to owning a space that's truly yours.
So breathe. Plan. Ask questions. And make sure the biggest purchase of your life feels a little less terrifying—and a lot more empowering.