First-Time Homebuyer Guide: Pre-Qualification, Credit Scores, and Loan

Buying a home is one of the biggest financial decisions most people ever make. Whether you are purchasing for the very first time or it has been twenty years since your last move, the mortgage process can feel overwhelming. The good news is that understanding a few key steps up front will make the journey smoother and far less stressful.

Why Pre-Qualification Comes First

When buyers call me wanting to tour a home, the first question I ask is: “Have you spoken with a lender?” Most of the time, the answer is no. Getting pre-qualified is a crucial first step because:

• It shows sellers you are serious and financially ready.
• It gives you a clear budget (sometimes higher or lower than you expected).
• It helps avoid disappointment later in the process.

To get pre-qualified, you’ll typically need:

• A driver’s license
• Two years of tax returns and W-2s
• 30 days of pay stubs
• 60 days of bank statements

Once those documents are submitted, lenders will review your credit score, debt-to-income ratio, and overall financial profile.

What’s a Good Credit Score?

Each loan type has its own requirements, but in general, a credit score of 620 or higher is a common starting point for many loan programs. Higher scores may open more options or better terms, but don’t let a less-than-perfect score stop you from speaking with a lender.

How Long Does Pre-Qualification Take?

If you have all your paperwork ready and you’re a W-2 employee, the process can often be completed in just a few hours. For self-employed buyers, it may take a bit longer since more documentation is required.

How Long is Pre-Qualification Good For?

Most pre-qualification letters are valid for 30–60 days. Keep in mind that bank statements and pay stubs need to be current, so lenders may ask for updated copies if too much time passes.

Do I Need 20% Down?

This is one of the most common myths in real estate. While conventional loans may require 20% down to avoid mortgage insurance, there are many other options:

• FHA loans: As little as 3.5% down
• USDA loans: 0% down in eligible rural areas
• VA loans: 0% down for qualifying veterans and active-duty service members

Every buyer’s situation is unique, so the best way to know what fits you is to talk with a lender.

What Happens After the Offer is Accepted?

Once your offer is accepted, the lender orders an appraisal, verifies updated documents, and works with the title company to prepare for closing. The longest delay is often waiting on appraisals, which can take several weeks depending on demand. From start to finish, most loans close in 4–6 weeks.

Property Types That May Not Qualify

Not all properties are eligible for traditional financing. For example, many lenders do not finance mobile homes, certain modular homes, or large tracts of land without an existing residence. It’s always smart to confirm financing options before falling in love with a property.

Do You Have to Use Your Bank?

A common misconception is that you can only get a mortgage through the bank where you have a checking account. That’s not true! You can shop around, compare rates and programs, and choose the lender that best fits your needs.

Final Thoughts

Buying a home doesn’t have to feel confusing. By getting pre-qualified, gathering your documents, and learning about the different loan programs, you’ll be one step ahead in the process. My role is to guide you from the first showing to the closing table, partnering with trusted lenders along the way.

If you’re thinking about buying a home in Knoxville, Sweetwater, Athens, or anywhere in East Tennessee, let’s connect. I’ll treat your real estate journey like it’s my own.