For Adjustable Rate Mortgages loans ("ARMs"), rates may increase after settlement.
First Time Buyer's Guide
Buying your first home can seem complicated. That’s why our guide helps you understand every step of the process, from budgeting to closing on your first mortgage.
Owning a Home
Benefits & Costs of Home Ownership
Let's break down the costs and benefits of owning a home.
First Time Home Buyers Guide: Tools, Calculators & Resources
- Monthly mortgage payment
- Your down payment – as low as 3% of the sale price
- Closing costs – typically 3% to 5% of the loan
- Taxes & insurance
- Utilities
- Repairs & maintenance
- Homeowner association dues or assessments
While these costs will vary from home to home, you’ll want to know what they are before making a final purchase offer.
Benefits of Home Ownership
- A home offers a stable place to start or grow a family, stronger ties to a community, along with greater privacy
- Your home is your own, and with that comes the ability to make changes as desired to reflect your personal lifestyle
- You can increase your net worth by building equity through:
1) monthly principal reduction payments
2) your home potentially increasing in value over time
You may be able to deduct your interest and property tax (consult a tax advisor to further discuss)
How Much Home Can You Afford?
Before you purchase your first home, there are important things to do and know.
Calculate Your Mortgage Payments
Get an estimate on monthly mortgage payments.
Consider Mortgage Options
Let's break down the costs and benefits of owning a home.
- Fixed-Rate Mortgage: interest rate never changes
- Adjustable-Rate Mortgage (ARM)[1] : lower starting rate that may increase or decrease over time » PNC ARMs have rate adjustment caps
- FHA Loans for expanded eligibility and low down payments
- Veterans Affairs Mortgages for U.S. military service members
- Affordable lending products that offer low down payment options
- PNC Community Mortgage
- Government Loan Options (FHA and VA)
- PNC Homeownership Grant
See the differences between a fixed-rate mortgage and an adjustable rate mortgage
Finding the Right Home
House hunting is a huge commitment. Here are some tips to help you out.
- Finding the Right Home
- Appraisals & Title Search
- Closing the Sale
- Insurance & Tax Information
- Working with an MLO
Making a House Your Home
Use our House Hunters Checklist to help with your home search.
It’s important to find a real estate agent who will:
- Help provide background information on properties of interest to you
- Guide you through the buying process
- Make it easier to work with the seller
You might also consider hiring a real estate attorney to:
- Be your advocate during negotiations with the seller
- Review contracts and research liens and encumbrances
- Make sure there are no legal surprises ahead
Ready to Get Started?
Use Home Insight Planner to Find the Perfect Home
Found a Home You Like?
Get a Home Appraisal and Title Search
Once the seller accepts your offer, you may strongly consider hiring a certified home inspector who can verify there are no structural problems, code violations or other undisclosed concerns. When your contract is final, your lender will have the property appraised by an independent, third-party appraiser who will confirm the fair market value of the home.
In addition, a title search will typically be conducted to:
- Discover any record claims on the property
- Make sure you can get a clear title to your new home
Home Affordability
Buying your first home is a big financial step. You’ll want to consider the added financial responsibilities, including things like moving costs, home repairs, landscaping, property taxes and insurance. You should have a steady income, manageable debt and feel confident you will stay in one place for awhile.
Start by assessing your income. Then consider liabilities like student loans, credit card balances and auto loans. Ideally, the amount of your monthly debt payments, including your proposed mortgage payment, should be equal to or less than 36% of your gross monthly income. And remember to budget for a down payment (typically 5% to 20% of the purchase price) and closing costs (usually estimated at 2% to 3% of the purchase price).
Closing the Sale
Closing the Sale
At last – you’re ready to finalize the sale.
During the closing, you’ll meet with all parties involved in the sale to make it official by signing documents, receiving the deed and paying your closing costs, which may include:
- Attorney, broker, credit report and/or lender fees
- Title search and insurance
- Appraisal and inspection fees
- Points – a predetermined fee similar to prepaid interest
- Paid to the lender to receive a particular interest rate
- 1 point equals 1% of the loan amount
- Other costs depending on your particular loan
Property insurance: Also called homeowner's insurance, property insurance protects the homeowner from losses to the property, as well as potential liability from events that occur on the property and elsewhere. Lenders require homeowner's insurance coverage to protect the collateral that secures their loan. Some homeowner's insurance policies do not cover catastrophic events such as tornadoes, hurricanes or floods. These kinds of events generally require a separate insurance policy. Sometimes additional insurance may be required for your loan.
Property Taxes and Homeowner's Insurance: A typical monthly mortgage payment consists of amounts for loan principal, interest, taxes and homeowner's insurance. Taxes and insurance are usually paid from an escrow, or impound, account.
Insurance 101
Homeowner’s Insurance
Homeowner’s insurance provides financial coverage in the event of a covered loss to your home, other structures or contents. In addition, homeowners insurance provides personal liability coverage for third-party claims.
Disaster Insurance
Insurance designed to protect your home in the event a natural disaster such as fire, flood, earthquake, hurricane or tornado were to strike and cause your home to become unlivable.
Mortgage Life Insurance & Mortgage Accidental Death Insurance
Mortgage life insurance pays off or reduces your mortgage loan balance (up to the policy maximum) in the event of death before the debt is paid, enabling surviving family members to retain their home. Mortgage accidental death insurance pays off or reduces your mortgage loan balance (up to the policy maximum) if your death is the result of a covered accident.
Private Mortgage Insurance
Insurance written by a private company to protect the mortgage lender against financial loss if a borrower defaults on the mortgage.
FHA Mortgage Insurance
An undertaking by the Federal Housing Administration (FHA) to insure the lender against loss if the borrower defaults on the mortgage.
VA Funding Fee
This fee is paid by the Veteran and/or third party, directly to the Veterans Administration, to guarantee a specified portion of the loan, should the borrower go into default.
Flood Insurance
Protection against flood loss through the 1973 Flood Disaster Protection Act.
Working with a MLO
Throughout the mortgage process you'll be working with a Mortgage Loan Office (MLO). A MLO will keep you abreast of your loan status, make sure that you are submitting the proper paperwork, and guide you through the application process.
If you have a MLO in mind, you can search for them in our database below. Or, you can find a MLO in your area to work with.
Take the Next Steps
Let's break down the costs and benefits of owning a home.
Preapproval is not a commitment to lend, a condition of loan approval or an application for credit.
PNC, PNC HomeHQ, PNC Home Insight and Home Insight are registered service marks of The PNC Financial Services Group, Inc. ("PNC"). PNC has a pending patent application directed at various features and functions of Home Insight® Planner. All loans are provided by PNC Bank, National Association, a subsidiary of PNC, and are subject to credit approval and property appraisal.
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