First-Time Buyer FAQ: Down Payments, Pre-Approval & More

You've decided to buy a home. That's the dream part—and it should feel like one. What comes next often feels like a maze: down payments, pre-approval, inspections, closing costs. Nobody explains it the way a real person would. So let's do that now.

The Down Payment Question: How Much Do I Really Need?

Here's what nobody tells you upfront: you don't need 20% down to own a home.

That 20% figure? It's a myth from another era. I've helped first-time buyers close on homes with 3% down, 5% down, even 10% down. The catch isn't whether it's possible—it's understanding what comes with each option.

3-5% down: You'll pay private mortgage insurance (PMI). That's an extra monthly cost, but it gets you into your home now. For buyers who've been told no before—credit challenges, unstable housing situations, jobs that just started—this might be the path that works. The math: if you find the right house and the right lender, PMI comes off once you hit 20% equity. That might take 7-10 years, or it might happen faster if your home appreciates or you pay principal down aggressively.

10-15% down: You shrink the PMI hit and prove you've saved real money. Lenders like this. It says "I'm serious."

20% down: No PMI, smaller loan, lower monthly payment. If you have it and your timeline allows, this is the smooth path. But if saving another $30,000 means waiting three more years in unstable housing, that's a different calculation.

The real conversation: What can you afford to put down without sacrificing your financial stability? That's the number that matters.

Pre-Approval: What It Is and Why It Changes Everything

Pre-approval is not a promise. It's a roadmap.

When you get pre-approved, a lender has looked at your credit, your income, your debts, and your down payment. They're saying, "Based on what we see, we're comfortable lending you up to X amount." That X is usually the number you'll see on your offer when you find the right house.

Why it matters for first-time buyers: Without pre-approval, you're shopping blind. You walk into an open house, you love it, you make an offer—and then you find out your lender won't touch it. Pre-approval means you know your lane.

What gets checked:

• Credit score (lenders typically want 580-640 minimum; higher is easier)

• Debt-to-income ratio (how much you already owe versus what you earn)

• Employment history (steady income matters; gaps get explained)

• Assets and savings (where your down payment is coming from)

The hard part: If your credit is rebuilding or you have unusual income (commission, self-employed, recent job change), this takes longer. That's not a no—it's a "let's figure out the right structure." I've closed deals with buyers who had 520 credit scores because we found the right loan program and the right lender willing to dig deeper than "credit score says no."

Closing Costs: The Surprise Nobody Likes

Closing costs are real, and they're not small.

Expect 2-5% of your loan amount. On a $200,000 house with 10% down, you're financing $180,000. That's $3,600 to $9,000 in closing costs—title insurance, appraisal, inspection, lender fees, attorney fees (in some states), property taxes, insurance.

Here's what changes the game: You don't have to pay all of it yourself. Sellers negotiate. If you're a strong buyer and the market is right, a seller will cover part of your closing costs. I've seen 2-3% coverage happen when the buyer brings a clean offer and proof of funds.

What you should budget for yourself: Earnest money (1% of the offer price, held in escrow), and having cash left over after closing for emergencies. Never close on a house with $0 in the bank. Life happens—roof repairs, furnace failures, broken windows.

Credit Scores and "Getting Told No"

Let's talk about this because it's the obstacle I see most.

You have a 580 credit score. Or you had a late payment five years ago and it's still haunting your report. Or your credit is clean but thin—you don't have enough history for traditional lenders to feel confident.

All of that is workable. Not easy, but workable.

What matters more than the number: The story behind it. A credit counselor called me recently about a client with a 540 score who had spent two years caring for a sick parent while working part-time. When that client's situation stabilized, we found a loan program that valued the fact that he'd never missed a payment since and had been rebuilding steadily. He closed.

The lenders I work with: I know which ones will actually look at your situation instead of just running a score through an algorithm. They'll ask about a gap in employment. They'll listen to why that medical debt hit your credit. They won't pretend it doesn't exist, but they also won't use it as an excuse to say no.

Your move: Get your credit report. (It's free at annualcreditreport.com.) Look for errors—there are more than you'd think. If you have late payments, the impact weakens over time. If you're sitting at 620 and need 640, sometimes a few months of perfect payment history moves the needle.

Inspections: What You're Actually Looking For

The inspection is your last chance to back out guilt-free. Use it.

A good inspector will spend 2-3 hours in the house and flag things. Roof condition, foundation cracks, outdated electrical, plumbing issues, HVAC age. Your inspector works for you, not the seller, not the lender. Their job is to tell you what's actually wrong.

Here's what first-time buyers often miss: You're not looking for perfection. Old houses have quirks. You're looking for expensive surprises. A 30-year-old roof might be fine for another 5 years, or it might fail next winter. An inspector tells you which one is true.

After the inspection: You can walk away, renegotiate, or ask the seller to fix things. Most buyers renegotiate. A roof repair costs $8,000, so the seller credits you $8,000 at closing, and you handle it yourself (sometimes you get better pricing that way).

The real talk: If the inspection finds something that scares you, talk to your lender. Sometimes it affects the loan. Sometimes it doesn't. Don't guess.

Working with the Right Lender

Your lender will be on the phone with you more than your real estate agent in the last two weeks before closing.

Not all lenders are built the same. Some will fight for you when something's broken. Others will disappear at 5 p.m. on a Friday when you need an answer.

Red flags: A lender who promises a rate that sounds too good. A lender who rushes you through pre-approval without asking questions. A lender who won't explain closing costs line by line.

Green flags: A lender who explains things twice (once simple, once detailed). A lender who talks about your credit and income like they're solving a puzzle, not just running a score. A lender who gives you a Loan Estimate in writing before you commit.

The network part: I work with lenders who are willing to go to bat for buyers. If you've been told no before, if your situation is complicated, if you're rebuilding—I know who will actually work with you instead of against you.

The Day You Close

Closing day is shorter than you think. You sign papers—a lot of papers—the lender funds, and the keys are yours.

You'll sit in a title company or attorney's office for 1-2 hours. You'll get the Closing Disclosure 3 days before, and it should match the Loan Estimate. If it doesn't, ask why before you show up.

Most of the papers are forms. The big ones are the promissory note (your promise to pay) and the deed of trust (the lender's security). Read them if you want; the title company will walk you through. Ask questions. This is your house. You get to understand it.

After closing: You get the keys. You own it. The hard part is over.

Your Next Step

If you're a first-time buyer and you've been told no before—or you're worried you might be—that's exactly who I work with. I know the lenders who will look at your whole story, not just your credit score. I know how to structure an offer so it closes. I know what the obstacles are before they hit, and I know how to get around them.

You don't need perfect credit, perfect income, or perfect savings. You need someone who believes in the dream and knows how to run toward it.

Let's talk about what's possible for you. That's what I'm here for.

Dream. Believe. Pursue. Achieve.

The Bobby Gene Team helps first-time buyers, buyers with credit challenges, and buyers in complex situations close on homes that others said were out of reach. We serve Joplin, Carl Junction, and the surrounding four-state area.