Buying your first home is one of the biggest milestones you’ll experience. At Sidney Federal Credit Union, we want our members to feel informed and confident every step of the way, not overwhelmed. That’s why we’ve put together this overview of five key things every first-time homebuyer should understand before diving in.
1. A down payment isn’t always required
One of the most common misconceptions we hear is that you need to save up a large down payment before you can buy. That’s not always true. Our First Time Home Buyer Mortgage offers 100% financing of the purchase price or appraised value, whichever is lower. That means eligible members may be able to purchase a home without a down payment at all! It’s worth noting that closing costs are still the buyer’s responsibility, but removing the down payment barrier makes homeownership a real possibility for a lot of people who assumed it was out of reach.
2. Pre-approval and pre-qualification aren’t the same thing
We often see members start the home search before fully understanding where they stand financially. Pre-qualification gives you a general idea of what you might be able to borrow based on information you provide. Pre-approval goes deeper — it involves verified documents, a credit check, and results in a lender-issued letter that shows sellers you’re a serious buyer. Documents you’ll typically need include recent pay stubs, W-2s, two years of tax returns, bank statements, and a valid ID. Getting organized early makes the process smoother and faster when you find the right home.
3. What you’re approved for and what you can afford may be different
This is an important distinction we always want our members to understand. A lender determines how much they’re willing to loan based on your income, credit, and existing debt, but that number doesn’t automatically reflect what feels comfortable in your monthly budget. Financial educators generally suggest keeping your mortgage payment under 28% of your gross income. That gives you breathing room for everyday expenses, savings, and life’s surprises. Using a mortgage calculator before you start house hunting is a great way to set realistic expectations.
4. An offer involves more than just the purchase price
When you’re ready to make an offer on a home, the price is just one piece of a larger picture. Offers also include earnest money, a good-faith deposit that shows the seller you’re serious, as well as an estimated closing date and contingencies. Contingencies are conditions built into the offer that protect you as the buyer. Common ones include a home inspection contingency, an appraisal contingency, and a financing contingency. If something comes up that can’t be resolved, contingencies give you the ability to renegotiate or walk away. Our First Time Home Buyer program also allows up to 3% in seller concessions, which can help cover some of your closing costs.
5. The costs of homeownership continue after closing
Closing day is exciting, but it’s not the finish line! Property taxes, homeowners’ insurance, maintenance, and unexpected repairs are all ongoing realities of owning a home. Many buyers also set up an escrow account to manage taxes and insurance, and those amounts can shift over time. We encourage members to start setting aside a small amount each month specifically for home upkeep. It’s also smart to budget for nesting costs in that first year like furniture, tools, and small upgrades, so those expenses don’t catch you off guard.
Want to find out more or ready to explore your options?
Still have questions? This free, recorded First-Time Homebuyer webinar from our partner, GreenPath Financial Wellness®, covers the basics every buyer should know. View Webinar.
Our First Time Home Buyer Mortgage offers 100% financing, no PMI, and an interest rate cap, plus a $3,000 lender credit at closing for qualified applicants through April 30, 2026! Review what you need with a GreenPath Pre-Approval Checklist and our home loans team is here to walk you through every step reach out for more information or apply here!
Information provided by our partners GreenPath and SavvyMoney and the U.S. Department of Housing and Urban Development (HUD). This post is for educational purposes only and does not constitute financial or legal advice. Rates and program details subject to change.
