Buying your first home is exciting — but it’s also a major financial move. From credit scores and savings to budgeting for your monthly payment, preparing for homeownership means getting your financial house in order first.
At Drennen Home Loans, we work with first-time buyers across Las Vegas and know the steps that make the biggest difference. Here’s a checklist of smart financial tips to help you get ready for your first mortgage and make a confident offer when the time comes.
1. Know What You Can Afford
Before looking at homes, figure out what monthly payment fits your budget.
A few key numbers to estimate:
- Your total monthly income
- Recurring debts (student loans, credit cards, auto loans)
- A comfortable housing budget (typically 25–33% of income)
Pro tip: Use our free mortgage calculator to estimate your monthly payment including taxes, insurance, and HOA.
2. Start Saving for Upfront Costs
While there are programs with low down payments, you’ll still need some savings for:
- Down payment (as low as 3% for first-time buyers)
- Closing costs (typically 2–5% of purchase price)
- Home inspection and appraisal fees
- Moving expenses and utility setup
Example: For a $350,000 home, your out-of-pocket costs might be $10,000–$15,000 depending on your loan program and seller concessions.
3. Check and Improve Your Credit Score
Your credit score directly impacts your mortgage rate and approval. Before applying, check your credit report for errors and take steps to improve it:
- Pay bills on time
- Pay down credit cards (keep balances under 30%)
- Don’t open new credit accounts during the mortgage process
- Avoid large purchases before closing
Credit score guidelines:
- 580+ = minimum for FHA
- 620+ = Conventional loan eligibility
- 740+ = best rates and lower PMI
4. Minimize Your Debt-to-Income Ratio (DTI)
Your DTI is a key number lenders use to assess your ability to repay the loan.
How it’s calculated:
DTI = (monthly debt payments ÷ gross monthly income) x 100
Most programs allow:
- Up to 43–50% DTI for FHA
- Up to 45% DTI for Conventional
- VA loans may allow higher based on residual income
Tip: Paying off a credit card or small auto loan could boost your approval power.
5. Avoid Big Financial Changes
When you’re planning to buy a home, it’s important to keep your financial profile stable.
Avoid:
- Switching jobs right before applying
- Financing a car, boat, or large furniture set
- Transferring large amounts between bank accounts
- Making large cash deposits without documentation
Lenders want to see consistent income, savings, and responsible credit use leading up to the purchase.
6. Understand Down Payment Options
You don’t need 20% down to buy a home.
Common first-time buyer options:
- FHA loan – 3.5% down
- Conventional loan – as low as 3% down
- VA loan – 0% down (for veterans)
- Down payment assistance programs – available in Nevada
We’ll help you explore all options and find what’s best for your budget and location.
7. Get Pre-Approved Early
Once your finances are in order, the next smart move is getting pre-approved. This shows sellers and agents you’re serious — and helps you shop within your actual budget.
A pre-approval from Drennen Home Loans includes:
- A full credit review
- Verification of income, assets, and debt
- A written letter to include with your offer
- Loan program recommendations tailored to you
8. Plan for Monthly Costs Beyond the Mortgage
Owning a home comes with expenses beyond the loan itself.
Monthly/annual costs to consider:
- Property taxes
- Homeowners insurance
- HOA fees (if applicable)
- Maintenance and repairs
- Utilities (which may be higher than in a rental)
We include these factors in your pre-approval to help you avoid surprises.
9. Use a Trusted Real Estate Agent
A good agent will help you:
- Find homes within your budget
- Understand neighborhood comps
- Negotiate offers and contingencies
- Coordinate inspections and closing
Need an agent recommendation? We work with experienced professionals across Las Vegas and can refer someone you’ll love working with.
10. Choose the Right Loan with Confidence
Every buyer is unique — and that’s why we don’t offer one-size-fits-all loans. At Drennen Home Loans, we’ll walk you through:
- FHA vs. Conventional
- VA loan options (if applicable)
- Down payment assistance programs
- Renovation and jumbo loans (if needed)
Our goal is to get you into your first home with a loan that makes sense long-term.
Frequently Asked Questions
Do I need a 700+ credit score to buy a home?
No. Many buyers qualify with scores in the 600–680 range — especially with FHA or down payment assistance.
Is it better to rent or buy in Las Vegas right now?
In many cases, owning is cheaper long-term and builds equity. It depends on your timeline, savings, and monthly budget — we can help compare.
Can I use gift funds for my down payment?
Yes! Most programs allow gifted down payment funds from family, and we’ll help document them properly.
Can I buy with student loan debt?
Yes — student loans don’t automatically disqualify you. We calculate your DTI and work with lenders who understand common repayment plans.
Let’s Prepare for Your First Home — Together
Buying your first home is a big deal, but it doesn’t have to be overwhelming. With the right plan and the right partner, you can move forward with confidence and clarity.
