Your first-home guide for Northern Kentucky and Cincinnati
Everything you actually need to know, in plain English, from a broker who has closed loans in Northern Kentucky and Cincinnati for 23 years. Jump in anywhere, this guide is built to be skimmed, searched, or read end-to-end.
Are you financially ready?
Start with these four checks before you tour homes. Lee can help you work out what needs attention and plan your next step.
Review your credit
Check your credit reports for errors and talk through the lender's requirements. A score is one part of the review, alongside your payment history and overall finances.
Plan your cash to close
Budget for the down payment, closing costs, prepaid expenses, and money left after closing. Eligible gifts or negotiated credits may help, but ask which rules apply before relying on them.
Document your income
Be ready to explain your employment and income history. The documents needed depend on how you're paid and the loan program; changing jobs doesn't automatically rule out a mortgage.
Understand your monthly debts
Debt-to-income compares monthly debt payments, including the proposed mortgage, with gross monthly income. Limits depend on the loan program and underwriting. Lee can help you calculate it.
Five down-payment myths costing first-time buyers
You don't need to have every answer before you talk with a broker. Start by separating program requirements from the advice you've heard about buying a home.
Some eligible conventional programs allow 3% down, while FHA can allow 3.5%. VA and USDA offer zero-down options for eligible borrowers. Compare mortgage insurance, closing costs, and the full monthly payment as well as the down payment.
For many conventional loans, you can request PMI cancellation when the balance reaches 80% of the home's original value, subject to payment history and other requirements. Automatic termination generally occurs on the scheduled 78% date if you're current. Appreciation alone doesn't set that date. Ask your servicer which rules apply.
Many programs allow gifts from eligible donors. The lender needs to document the gift and its source, and the rules depend on the program and property. Ask before transferring money or making an offer that depends on a gift.
Paying down debt can affect qualification, but using your savings also changes the cash available for closing and emergencies. Compare both needs with Lee before paying off balances or moving money.
A hard credit inquiry can affect your score. Credit-scoring models generally group mortgage-shopping inquiries within a window of 14 to 45 days, depending on the model. Ask what kind of credit check is needed and plan your comparison shopping within a short window.
Four loan programs to compare
A smaller down payment doesn't always mean a lower total cost. Compare the rate, mortgage insurance or program fees, cash needed at closing, and monthly payment. Eligibility depends on your finances, the property, and the lender.
FHA
Low down payment with FHA mortgage insurance
- Best for
- Buyers with credit scores 580-699 or those with higher debt loads.
- Watch out
- For current FHA loans, annual MIP generally lasts 11 years at 90% initial LTV or below, or for the mortgage term above 90%. Refinancing involves new costs and qualification.
Conventional 97
Low down payment; PMI cancellation rules apply
- Best for
- Eligible buyers who want to compare a low-down-payment conventional option and understand its mortgage insurance costs.
- Watch out
- First-time-buyer definition is "no ownership in the past 3 years." Income limits may apply on specific variants.
VA
Zero down, no monthly mortgage insurance, competitive rates
- Best for
- Active-duty service members, veterans, and eligible surviving spouses.
- Watch out
- A funding fee may apply; the amount and exemptions depend on VA rules. Property and lender requirements also apply.
USDA
Zero down in eligible rural and suburban areas
- Best for
- Low- to moderate-income buyers looking outside city cores. Parts of Boone, Grant, and outer Campbell counties qualify.
- Watch out
- Income cap by household size. Property must be in a USDA-eligible geographic area.
The 8-step first-time buyer process
Use these steps to understand what comes next. The timing depends on your home search, contract, documents, appraisal, and lender. Lee can help you work through the schedule for your purchase.
- Before shopping
Get your number (pre-approval)
Start with your budget and plans. Lee will explain the credit review and documents needed for preapproval, then help you understand the borrowing range and any remaining conditions.
Ask Lee about preapproval - Before touring
Find your agent
Choose an agent and discuss their services and compensation before signing a buyer agreement. You can negotiate for the seller to contribute, but plan for any fee you're responsible for under your agreement.
- Your home search
Shop with your budget locked in
Tour homes with your agent and compare the full monthly cost with your budget. Keep room for maintenance, moving costs, and savings. Your search may take more or less time than you expect.
Run the numbers - Offer and contract
Make an offer
Your agent helps prepare the offer and explain its deadlines and contingencies. The earnest-money amount and deposit timing come from the purchase contract. Share lender questions with Lee.
- Contract deadline
Inspection
An inspection can identify condition issues before closing. Discuss repair requests and any decision to proceed or withdraw with your agent or attorney. Your contract determines the deadlines and what happens to earnest money.
- During underwriting
Appraisal and underwriting
The lender checks the property's value and reviews your file against program requirements. You may need to provide additional documents or resolve property conditions before approval.
- Before closing
Clear to close
For most purchase mortgages, you must receive the Closing Disclosure at least three business days before closing. Review the terms and cash needed. Confirm payment instructions directly with the closing company using a verified phone number.
- Closing day
Keys
Sign the closing documents and complete the required payments. Your purchase agreement and closing arrangements determine when you receive possession and the keys.
Six decisions to discuss before closing
Changes to your finances or purchase terms can affect the lender's review. Ask questions early so you understand what could change your approval, costs, or closing schedule.
Opening a new credit card mid-process
Any new credit activity between application and closing can derail underwriting. Don't open cards, don't finance furniture, don't co-sign anything until after keys are in hand.
Changing jobs or income structure
A change in employment or pay can require a fresh income review. Talk with Lee before making a planned change so you understand what documents or timing may be affected.
Making large cash deposits
Lenders may ask you to document deposits and the source of funds used for closing. Keep records and ask Lee before moving money or accepting a gift so you know what documentation is needed.
Skipping the inspection
Discuss an independent inspection with your agent, including on new construction. It can help you understand the property's condition. Review the contract's inspection deadline and your options before waiving a contingency.
Maxing out your pre-approval
Choose a payment that leaves room for maintenance, savings, and your other priorities. A preapproval amount can be higher than the budget you want to live with.
Waiving contingencies in a hot market
Financing and inspection contingencies affect your options if something changes. Review the risks with your agent or attorney before making an offer or waiving a protection.
A plain-English glossary
The 10 terms every first-time buyer ends up Googling.
- APR
- Annual Percentage Rate. Your interest rate plus fees, expressed as a yearly cost. Compare APRs when shopping offers.
- Closing Costs
- Upfront charges for the loan and property transfer. Your cash to close can also include the down payment, prepaid taxes and insurance, and initial escrow funds, minus deposits and applicable credits. Review the itemized Loan Estimate.
- DTI
- Debt-to-Income ratio. Your total monthly debt (including the new mortgage) divided by gross monthly income.
- Earnest Money
- A deposit made under the purchase contract, often held in escrow. Its amount, deadlines, and refund conditions depend on the agreement. Review those terms with your agent or attorney.
- Escrow
- (Two meanings.) 1) A neutral third-party account holding earnest money during contract. 2) Monthly escrow on your mortgage payment: taxes and insurance collected with P&I and held by the lender.
- HOA
- Homeowners Association. Common in condos and planned communities. Dues and restrictions apply; affects your DTI.
- LTV
- Loan-to-Value. Loan amount divided by appraised value. 95% LTV means 5% down.
- PITI
- Principal, Interest, Taxes, and Insurance, the four components of your monthly mortgage payment. Includes PMI when applicable.
- PMI
- Private Mortgage Insurance, commonly required with less than 20% down on a conventional loan. Cancellation depends on original value, the payment schedule, and servicer requirements.
- Points
- Prepaid interest paid at closing to lower your rate. One point = 1% of the loan amount. Worth it if you'll keep the loan long enough to break even.
Tools you can use today
Mortgage calculator
Estimate monthly P&I, taxes, insurance, and PMI at any price and down payment. No sign-up.
Open calculatorToday's rates
Dated Freddie Mac national averages for 30-year and 15-year fixed purchase loans. A benchmark, not your personal quote.
See ratesAll loan programs
Conventional, FHA, VA, USDA, Jumbo, HELOC, investment, and refinance explained.
Compare programsStill preparing to buy? Start a preapproval conversation without creating an application account.
10 questions we hear every week
- Your down payment is only part of the cash you'll need. Some eligible conventional programs allow 3% down, FHA can allow 3.5%, and eligible VA or USDA buyers may have a zero-down option. Add closing costs, prepaid taxes and insurance, moving costs, and a savings cushion. Seller or lender credits may reduce cash needed at closing, but their terms and program limits matter. Lee can help you review an itemized estimate for your situation.
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