Prepare for your home-buying journey and secure your dream property
with these streamlined, step-by-step first-time home buyer guides.
Buying a home for the first time is an exciting milestone, but it’s natural to feel a bit overwhelmed by what lies ahead. Whether you’re a first-time buyer or returning to the housing market after a pause, careful preparation is the best way to move forward with confidence. This guide walks you through navigating the real estate market in Mississippi, from understanding assistance programs to the final steps of closing on your new home.
So, what is a first-time homebuyer? According to the U.S. Department of Housing and Urban Development (HUD), you qualify as a first-time homebuyer if you haven’t owned a home in the three years prior to the closing date of your new home.
Federal housing guidelines expand this group further. For instance, you qualify if you’ve only previously owned a home with a former spouse or if you’ve only owned a principal residence that was not attached to a permanent foundation, such as a mobile home.
Understanding how lenders define “first-time homeowner” can help you determine whether you qualify for special benefits.
Buying your first home in Mississippi can be more affordable than you might think, thanks to state and federal programs designed to lower the barriers to entry. Many down payment assistance programs offer grants or forgivable loans to help cover upfront costs, so you don’t necessarily need a large savings account to get started.
For instance, the Mississippi Home Corporation offers the Smart6 program, which combines a 30-year loan with a $6,000 zero-interest second loan for down payment help. Another option is the Trusty10 program, providing a $6,000 second loan with a low 2.00% interest rate over 15 years.
First-time buyers may also be eligible for a mortgage credit certificate, or MCC, which allows you to claim a portion of your annual mortgage interest as a direct, dollar-for-dollar reduction on your federal income taxes (up to $2,000 per year). Keep in mind that you need to apply for the certificate before you close on your home.
Mississippi provides targeted help as well, such as the Housing Assistance for Teachers program, which gives up to $6,000 in forgivable loans to educators.
Your loan officer is your best resource — ask them during your initial consultation which first-time homebuying assistance programs you might qualify for.
Recommended: Mississippi First-Time Home-Buying Assistance Programs
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
The home-buying process can be intimidating, especially if you haven’t been through it before. But a little preparation, from financial planning to hiring the right help, will make the journey much smoother. Here are 11 first-time homebuyer tips to guide you.
Take the time to evaluate your finances so you know when you’re ready to begin looking at houses. To start, look at your local housing market. Buying often makes more financial sense if rent is higher in your area than a prospective mortgage payment. Next, you’ll want to determine whether you qualify for a loan based on two key financial indicators:
Then consider your timeline. Buying a home is a long-term commitment. Planning to stay in the property for a while is what ultimately allows your home equity to increase through regular monthly payments and property appreciation.
Recommended: Average Monthly Expenses for One Person
A realistic budget can help you avoid financial strain down the road. A comprehensive budget will need to include the upfront down payment, monthly mortgage payments, property tax, homeowners insurance, any homeowners association (HOA) fees, and regular maintenance costs. A home affordability calculator can factor in most of these line items to help you determine what you can comfortably afford.
If you’re the overachieving type, consider saving extra funds for moving expenses, furniture, appliances, and any landscaping needs. Also, prices for things like groceries and utilities can vary greatly by location, so check the local cost of living if you are moving out of state.
Regarding the down payment, many first-time homebuyers aim for 20% to avoid paying private mortgage insurance (PMI). (This strategy also can help you get a lower mortgage interest rate!) However, the minimum down payment for a conventional loan can be as low as 3%, and certain government loans require no down payment at all. Using a down payment calculator can help you understand how different down payment percentages will affect the amount you’ll need based on your target property price.
First-time homebuyers can research different types of mortgage loans to find one that best suits their financial situation:
You can save thousands of dollars by shopping around with multiple lenders. Because interest rates and fees vary significantly, soliciting several offers ensures you find a competitive deal. Consider requesting quotes from at least three different institutions.
It’s important to know the difference between the advertised interest rate and the APR (annual percentage rate). The APR includes the basic interest rate plus other upfront costs, including lender fees and discount points. (It does not include all closing costs.) The APR makes for a better apple-to-apples comparison when you’re shopping around.
Finally, before choosing a mortgage lender, research their customer experience and preapproval timelines.
Prequalification can give you a rough estimate of your borrowing capacity based on unverified data. This step uses a soft credit check that does not lower your credit score. You can get prequalified with multiple lenders while you’re shopping around.
After you choose a lender, you’ll want to seek formal preapproval by providing tax returns, recent pay stubs, bank statements, and employment records. The mortgage preapproval process results in a formal preapproval letter that shows sellers you have reliable financial backing. The letter remains valid for 30-90 days, and some lenders will lock your interest rate for that time to protect you from market increases.
While you may think that hiring a buyer’s agent is optional, working with a real estate pro has many perks. An agent can tailor the home search so that you spend less time looking at properties that don’t meet your criteria. They have access to new listings that are not yet on the market and may be willing to preview properties for you. They can also help you navigate the intricacies of contract negotiations and paperwork.
Note that real estate commission norms have changed in recent years. Consider reading up on current guidelines to understand how a real estate agent gets paid.
You can begin your active home search once you know your true price range. Consider researching local neighborhoods and, if relevant, daily commute times and school districts. Location is the one element you can’t change about a property, so choose with care.
Of course, it’s also important to view properties with a critical eye. Inspect each home for water stains, structural damage, or problems that could be expensive to repair.
Last, take a moment to understand your rights as a homebuyer. The Fair Housing Act prohibits housing discrimination based on race, color, national origin, religion, sex, familial status, and disability. Document any obstacles or bias from sellers or brokers during your property search to protect yourself.
Recommended: Best Affordable Places in the U.S.
Once you’ve decided on the home you’d like to purchase, you are ready to draft an offer letter. Your agent will help you establish a reasonable opening bid based on recent sales of similar homes nearby. The proposal will outline your proposed price, target timeline, and contingencies. Contingencies are clauses that protect your financial investment by allowing you to cancel the contract should the property fail a structural inspection or appraise below the sales price.
If the seller accepts your offer, you will proceed to the contract stage and submit an earnest money deposit, which is typically 1%-3% of the purchase price. This cash deposit goes into an escrow account to show your good faith. Negotiations can involve counter offers before both parties reach an agreement.
After the seller accepts your offer, you’ll want to hire a licensed home inspector to evaluate the condition of the property. This independent professional conducts an in-depth review of the home’s structure, examining the roof, foundation, electrical panels, plumbing lines, and heating systems.
An inspection, which usually costs between $300 and $500, is a smart investment that can prevent expensive surprises. Take the time to attend the inspection in person so that you can ask detailed questions about the general condition of the property.
You can use the resulting report to request repairs or price reductions from the seller. If the problems are too severe, your inspection contingency allows you to walk away from the deal entirely. Shop around and obtain multiple quotes from certified local experts.
Lenders require an independent appraisal to ensure that they are not loaning more than the home’s value. Your lender will select an objective appraiser to evaluate the property.
As with an inspection, an appraisal usually involves someone visiting the property and looking around. The specialist evaluates the home size, condition, and local sales trends. They compare the house to similar properties recently sold in the same neighborhood.
You’ll be responsible for scheduling the appointment and ensuring property access for the visit. You will also be required to pay an appraisal fee, typically several hundred dollars.
You have reached the final stage of the home-buying process. Before the lender releases your funds, you will have to provide proof of homeowners’ insurance, including coverage of environmental hazards common to the local area.
Before closing, you’ll complete a final walk-through of the property with your agent to ensure that the home remains in good condition and that the seller has completed all requested repairs. You will also review your final closing disclosure document with care.
Finally, you will meet with a title company representative to sign your loan paperwork and transfer ownership officially. The escrow company manages the exchange of funds securely. Once you pay your remaining closing costs, you will receive the keys to your new home. Congrats!
An online calculator can be a big help in comparing home equity loan rates and terms. And it’s not the only calculator you’ll find helpful during your home equity loan process:
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
You can begin your life as a homeowner by creating a detailed first-time homebuyer checklist and following these tips:
Stay organized to better protect your investment and ensure your home remains comfortable and safe for years to come.
Buying your first home in Mississippi is achievable when you have a plan to follow. Use state assistance programs to reduce your down payment barriers, and work with an experienced real estate agent to get the support you need. And make sure you shop around with multiple lenders before accepting a mortgage offer — that alone can save you thousands in interest.
You typically need enough money for the closing costs, which are typically 2%-5% of your loan amount, and the down payment. Many loan programs allow down payments well below 20%, including options as low as 3% for conventional loans or zero down for certain government loans. Besides that, you’ll also want enough funds for monthly mortgage payments, property tax, home insurance premiums, and any homeowners association (HOA) dues.
Conventional mortgage options typically require a credit score of at least 620 to qualify. For FHA loans, you can qualify with a score of 580 if you make a 3.5% down payment or a score of 500-579 with a 10% down payment. VA and USDA loans do not have a set minimum score, but lenders typically look for scores of at least 620.
First, check your finances, shop around for a good lender, and get preapproved for a mortgage. Next, find a real estate agent, shop for homes in your price range, and make an offer letter. Finally, once your offer is accepted, schedule a home inspection and secure your homeowners insurance. At the closing meeting, you’ll sign paperwork and pick up the keys.
While it may not be realistic in today’s competitive market, this real estate guideline suggests spending no more than 30% of your gross income on housing payments, including insurance and property tax. It also recommends having 30% of the home’s value saved in cash for a down payment and a buffer. Finally, it recommends ensuring the home price is no more than three times your annual gross income.
To qualify for special assistance, the primary rule is that you cannot have owned a principal residence in the past three years, but most programs require that you occupy the property as your primary residence as well. There are also lender criteria for credit score, income, and debt-to-income ratio. Finally, many assistance programs and grants require you to attend an approved homebuyer education program.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
This article is not intended to be legal advice. Please consult an attorney for advice.Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Take the first steps to homeownership today. Get prequalified for an FHA loan online.
