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Guides by Buyer Type

Whatever your situation, there is a path. Pick your buyer type for the loan programs, steps, and guides that fit, then run your numbers.

Why buyer type changes the loan, not only the paperwork

Two buyers with the same income and the same credit score land in different programs all the time. What separates them is how their income is documented, how recently their credit took a hit, how the property will be used, and whether the home already exists. Underwriting looks at those four things before it looks at anything else, which is why the guide that fits your situation is more useful than a general buying checklist.

What each path involves

Buying your first home

The two hurdles are down payment and understanding the process, not qualifying income. Conventional loans start at 3% down, FHA at 3.5%, and most states run down payment assistance programs that pair with both. Start with how much house you afford to set a realistic price, then read the first-time buyer guide and get pre-approved before touring homes. Sellers in most markets will not accept an offer without a pre-approval letter attached.

Buying an investment property

Expect 15% to 25% down, pricing adjustments that raise the rate above owner-occupied levels, and reserve requirements measured in months of payments. DSCR loans qualify the property on its own rent instead of your personal income, which matters once you hold several doors. House hacking, where you live in one unit of a two-to-four unit building, is the one route that keeps owner-occupied terms and low down payment programs on the table. See the investor guide.

Refinancing what you own

A refinance is worth doing when the monthly savings pay back the closing costs before you sell or refinance again. Rate-and-term lowers the payment, cash-out converts equity to cash at a slightly higher rate, and FHA and VA streamline refinances skip the appraisal and most income documentation. Run the break-even calculator first, then read the refinance guide.

Buying while self-employed

Underwriting uses net income after business deductions, usually averaged over two years, not gross revenue. Buyers who write off aggressively often qualify for far less than their bank balance suggests. Bank statement and profit-and-loss programs exist for this exact gap and price slightly higher. Gather two years of returns, year-to-date profit and loss, and business bank statements before applying. The self-employed guide walks through the calculation.

Buying after bankruptcy or foreclosure

Every program has a published waiting period measured from discharge, not from filing. FHA and VA are typically two years after a Chapter 7 discharge, USDA three, and conventional four. Chapter 13 is often shorter with on-time plan payments and trustee approval. Rebuilding the score during the wait matters as much as the wait itself. See buying after bankruptcy.

Buying a second or vacation home

Second-home financing sits between primary and investment pricing. Expect at least 10% down, a rate adjustment, and occupancy rules that require you to use the home yourself and keep it out of a full-time rental program. Short-term rental income usually will not help you qualify. Read second and vacation homes.

Building instead of buying

Construction-to-permanent loans fund the build in draws as work is completed, charge interest only on what is drawn, then convert to a standard mortgage at completion. Budget for the interest carry during the build and for a contingency reserve, since lenders expect one. The construction loan calculator models both phases.

The steps that stay the same for everyone

• Know your ratio before your price. Run debt-to-income first. It caps your price more often than your down payment does.
• Get pre-approved, not pre-qualified. Pre-approval means a lender pulled credit and reviewed income documents. Pre-qualification is an opinion.
• Budget cash to close, not down payment. Closing costs typically add 2% to 5% of the purchase price. The closing cost estimator breaks it down.
• Compare at least three lenders on the same day. Rates move daily, so quotes from different days are not comparable. See how to shop for a mortgage.
• Leave your credit alone until you close. New accounts, large deposits, and job changes between approval and closing all trigger re-underwriting.