Understanding Mortgages for First-Time Home Buyers

By Jackie Schierlman, eXp Realty – Serving Southeast Kansas

If you’re thinking about buying your first home in Southeast Kansas, congratulations—that’s a huge step! Whether you’ve been renting for years or just starting to explore homeownership, understanding how mortgages work is one of the most important pieces of the puzzle.

And I get it—there’s a lot of confusing terminology and conflicting advice out there. So let’s cut through the noise. This guide is written with you in mind: the first-time buyer who wants honest answers and clear direction, not sales talk.

🏡 What Exactly Is a Mortgage?

Let’s start with the basics. A mortgage is a loan from a bank or mortgage lender that helps you buy a home. You agree to repay the loan (plus interest) over a set period—usually 15 to 30 years. The house itself serves as collateral, which means the lender can take it back if the loan isn’t paid.

But here’s the good news: with the right information and the right support, you can absolutely get through the mortgage process with confidence—and even enjoy the journey.

💸 Down Payments: What Do You Actually Need?

You’ve probably heard people say you need 20% down to buy a house. That used to be the standard, but it’s not true for most buyers anymore—especially first-time buyers.

Here are some common options:

• USDA Loan: 0% down (available in many rural areas of Southeast Kansas)

• VA Loan: 0% down (for eligible veterans and active-duty military)

• FHA Loan: 3.5% down (great for lower credit scores or limited savings)

• Conventional Loan: 3%–5% down for qualified buyers

Keep in mind that the less you put down, the more you may pay in mortgage insurance or monthly payments—but there’s no one-size-fits-all answer. I can help you compare what makes sense for your budget and long-term goals.

💳 What About Credit Score?

Most lenders want to see a credit score of at least 620 for conventional loans, though FHA loans often allow lower scores (around 580, sometimes lower with more down). The higher your score, the better your interest rate and loan terms will likely be.

Don’t panic if your score isn’t perfect. I’ve helped plenty of buyers work with lenders who offer flexible options—or create a game plan to raise their score before buying.

💼 What’s the Difference Between Pre-Approval and Pre-Qualification?

Here’s a key point that trips people up:

• Pre-qualification is a rough estimate based on self-reported income and credit.

• Pre-approval is based on verified financial documents and credit check. It shows sellers you’re serious and helps you avoid surprises later.

I always recommend getting pre-approved before house hunting. It helps you understand your true price range—and strengthens your offer when you find a home you love.

🏦 Fixed vs. Adjustable Rate Mortgages (FRM vs ARM)

There are different types of mortgage structures. The two most common are:

• Fixed-Rate Mortgage (FRM): Your interest rate stays the same for the life of the loan. Most buyers choose this because it's predictable.

• Adjustable-Rate Mortgage (ARM): Your rate starts lower but can change (and possibly increase) after an initial period.

Unless you plan to sell or refinance within a few years, a fixed-rate mortgage is usually the safer bet—especially in an unpredictable interest rate market.

💰 What’s Included in a Mortgage Payment?

When you hear "monthly mortgage payment," it's not just the loan itself. It typically includes:

• Principal: The amount you borrowed

• Interest: The lender's charge for loaning you the money

• Taxes: Local property taxes (often held in escrow)

• Insurance: Homeowners insurance (and sometimes mortgage insurance)

This is known as PITI (Principal, Interest, Taxes, and Insurance). If you’re buying in Southeast Kansas, property taxes can vary by county, so it’s worth looking at those numbers closely upfront.

🔍 Loan Programs You Should Know About

As a first-time buyer, there are loan options and programs designed just for you:

🟢 FHA Loans

Ideal for buyers with limited credit or savings. Lower down payments and more flexible requirements.

🟢 USDA Loans

Available in eligible rural areas (many places in Southeast Kansas qualify!). Offer 0% down and low interest rates.

🟢 VA Loans

For veterans and active-duty service members. No down payment, no PMI, and competitive rates.

🟢 Kansas Housing Assistance

The Kansas Housing Resources Corporation (KHRC) offers first-time homebuyer grants, down payment assistance, and education programs. If you qualify, it can help bridge the gap on upfront costs.

🛠️ What Is Mortgage Insurance?

If you put down less than 20%, you’ll likely need mortgage insurance. This protects the lender (not you) in case you default on the loan. It’s an added cost, but not forever—once you reach 20% equity in your home, you may be able to remove it.

📝 What to Expect During the Mortgage Process

Here’s how the process usually flows:

1. Get Pre-Approved – Know your budget and get paperwork in order.

2. Make an Offer – Once you find the right home, we submit a competitive offer.

3. Loan Application & Processing – Your lender verifies income, employment, credit, and assets.

4. Appraisal & Inspection – The home is inspected and appraised to confirm value.

5. Underwriting – Final loan approval is issued once everything checks out.

6. Closing Day – You sign the final paperwork, get your keys, and officially become a homeowner.

Each step is manageable—and you don’t have to do it alone. I’ll walk with you through every part of it.

💬 Final Thoughts from Jackie

Mortgages can feel intimidating, but once you understand the basics, it’s a lot less overwhelming. You don’t need to be a financial expert—you just need someone in your corner who will break things down clearly and advocate for your best interest.

If you're even thinking about buying your first home, I’d love to talk. No pressure, no commitments—just a simple conversation about what’s possible for you here in Southeast Kansas. And when you're ready, I’ll connect you with trusted local lenders who offer great options for first-time buyers.