Educational guide and interactive workbook
Your roadmap to homeownership
A first-time buyer's guide to getting mortgage ready, one clear step at a time.
Let's get you organized
Buying a home has a lot of moving parts. This guide is here to help you keep track of them, one step at a time, and to make the process feel clearer and more manageable along the way.
Matek Mortgage is based in Maitland, Florida, and helps first-time homebuyers across Orlando and Central Florida. Last reviewed November 2026 by the Matek Mortgage team.
Read at your own pace
Thirteen short topics explain how a mortgage works, from credit to closing. Start anywhere, and come back whenever you like.
Make it yours
The workbook at the end is interactive. Type your own numbers, check off your documents, and track your progress month by month.
Your progress is saved
Everything you enter saves automatically as you go, so you can leave and pick up right where you stopped.
Your entries are saved in this browser, on this device, and Matek never sees them. Your progress stays with the browser and device you use, so it's best to keep going there. To keep a copy or share it with your loan officer, use "Print or save as PDF" in the workbook. Clearing your browser data removes what you saved, so a PDF copy once in a while is a good idea.
The Path.
Thirteen topics to understand the process, and seven worksheets to make it yours.
A mortgage, simplified
A mortgage is a loan you use to buy a home, secured by the home itself. You put some money down, borrow the rest, and repay it with interest over time.
Every approval rests on four pillars
These are the four areas a lender reviews on every application. Together they show whether you can repay the loan comfortably.
Income
Stable, documentable, and likely to continue.
Assets
Down payment, closing costs, and reserves.
Credit and liabilities
Your score, your history, and your balances.
Property
The right type and price for your plan.
And how the loan itself works
- Principal and interestYou repay the amount you borrowed plus the lender's charge for lending it.
- A set termUsually 15 or 30 years. A longer term lowers the payment but costs more interest.
- Secured by the homeThe house is the collateral. Staying current keeps it yours.
You don't need all four pillars to be perfect to start. You need a plan to strengthen them, and that is what the next twelve months are for.
Twelve months, five phases
A year gives you room to move without rushing. Here is a general suggestion on how the months unfold. You can adjust the pace to your own situation and reality.
Go at your own pace. Some people will be ready sooner, and others may take longer. Use the twelve months as a guide, not a deadline.
Take stock
- Pull your credit reports
- List all debts and monthly income
- Set a target price range and a monthly number you’re comfortable with
Build the foundation
- Pay every bill on time
- Chip away at balances
- Start or grow your down payment and closing-cost savings
Get your paperwork ready
- Gather pay stubs, W-2s or 1099s, and tax returns
- Keep bank statements clean
- Avoid large unexplained deposits
Get pre-approved
- Talk with a loan officer
- Confirm your program and budget
- Line up an agent and start touring homes
Hold steady and close
- No new credit or big purchases. That includes the boat.
- Respond to your loan team quickly
- Keep funds where the lender can see them
A mortgage strategy at the start makes a real difference. Knowing which debts to pay off, and which to pay down, helps you maximize your eligibility. That is the key to long-term success.
Know your score
Loan programs start at different credit scores. These are typical minimums.
FHA
Flexible and first-time-buyer friendly.
VA
For eligible veterans.
USDA
Rural and some suburban areas.
Conventional
Best pricing at 780+.
Non-QM
Alternative documentation.
Your qualifying credit score is based on the lowest middle score of any applicant on the loan. Even with a strong co-signer, your score can affect what you qualify for.
To keep a healthy credit score
- Pay everything on timePayment history is the biggest factor. Set autopay so nothing slips.
- Lower your utilizationKeep card balances well under 30% of your limits. Under 10% is even better.
- Avoid new accountsNew credit and hard inquiries can dip your score right before you buy.
- Check for errorsDispute mistakes early. Corrections can take a few weeks to post, and disputes must be cleared or removed before you go under contract.
Which score actually counts?
FICO® Score
The score mortgage lenders have used for decades. Programs pull specific FICO versions from all three bureaus and use your middle score.
VantageScore® 4.0
A newer model from the three bureaus. For now, it is becoming eligible for conventional loans only.
Hard pull
Used for loan or credit decisions. It shows the full credit report and may slightly lower your score.
Soft pull
Used for prequalification or monitoring. It does not affect your score and may show less detailed information.
The score you see may not be the score that counts
There are dozens of scoring models, each tuned for a different industry: auto, credit cards, mortgage. The number on Credit Karma or in your banking app is often a VantageScore or a consumer FICO, and it can differ, sometimes by a lot, from the qualifying score a lender pulls. Ask us to check the one that counts.
No credit? You can build it
No score yet? You can build one from scratch, using your own savings as the seed. The method is a repeating loop that creates two kinds of credit, then levels up each time around. Most people see results within 12 months.
Open a secured installment loan
Seed it with your savings. The bank holds the cash while you repay in small monthly installments, each one reported to the credit bureaus.
Open a secured card
Use the loan proceeds as the deposit. That becomes your limit. Charge one small bill and pay it in full.
Pay both on time, every month
Two tradelines now report, one installment and one revolving. That builds a well-rounded score faster than one account could.
Level up and repeat
After about seven months, once the first loan is paid off, start again. Try to qualify for an unsecured loan at a higher amount, or a new secured loan with a slightly larger balance. This time, use the funds to autopay the loan back.
Why the loop works
One loop, three ways to lift your score
Each step above feeds the factors that matter most. Repeating the loop keeps all three moving in the right direction.
- Payment history (35%). Paying both accounts on time, every month.
- Amounts owed (30%). Keeping the card balance low compared to its limit.
- Credit mix (10%). Having both an installment loan and a revolving card.
Keep both accounts open, pay on time, and keep card use under about 10 to 30% of the limit. Most people see a usable score in about 6 to 12 months. Results vary by person. These are general strategies, not a guarantee.
What you'll bring to the closing table
Cash to close is the total you need on closing day. It has two parts, your down payment and your closing costs. Down payment minimums vary widely by program.
Down payment
Your share of the purchase price, paid up front.
Closing costs
Fees to complete the loan and transfer the home.
Cash to close
The total you bring to the closing table.
Part 1 · The down payment
The typical minimum depends on your loan program.
Bars show the down payment on a scale of 0 to 10% of the price. Zero-down loans still have closing costs and other cash requirements. Confirm eligibility with your loan officer.
Part 2 · The closing costs
These are separate from your down payment. They pay for the people and services that finalize your loan.
of the purchase price, on top of your down payment.
- Lender fees
- Origination, underwriting, appraisal, processing, and credit report.
- Title and settlement
- Title search, title insurance, and the closing agent.
- Government fees
- Recording fees and transfer taxes.
- Prepaid escrow
- Taxes and insurance held in advance.
Part 3 · Where your funds can come from
Lenders will want to see where your cash to close comes from.
| Source | What counts | Good to know |
|---|---|---|
| Liquid assets | Checking · Savings · Money market | The simplest funds to document and verify. |
| Investments | 401(k) · IRA · Stocks and brokerage | Lenders typically count a portion of the vested value. |
| Other sources | Family gift · Down payment assistance · Seller concessions | Third-party funds that help you get to the table. |
Physical cash needs time in the bank
Cash from a mattress, a coffee can, or the safe cannot be properly seasoned or sourced. Deposit it into a bank account at least two months (60 days) before you seek pre-approval so it counts as usable funds.
Expected and unexpected
Your mortgage payment is just the start. Plan for the steady monthly costs, and keep a cushion for the ones that are easy to forget.
What's inside your monthly payment
- 66%Principal and interest
- 14%Property taxes
- 8%Homeowners insurance
- 5%HOA dues
- 7%Mortgage insurance
Illustrative mix. Your split depends on price, taxes, and loan type.
What else owning a home costs
Expected, every month
- Principal and interestYour core loan repayment.
- Property taxesUsually collected in escrow.
- Homeowners insuranceRequired by your lender.
- HOA duesIf your community has one.
- UtilitiesPower, water, internet, trash.
Easy to underestimate
- Routine maintenanceBudget about 1% of the home's value a year.
- Sudden repairsAC, roof, water heater.
- Insurance increasesPremiums can rise at renewal.
- Tax reassessmentTaxes may adjust after you buy.
- Move-in costsMovers, furniture, deposits.
- Special assessmentsOne-time HOA charges.
Mortgage insurance and fees, by loan
| Loan | Upfront | Ongoing |
|---|---|---|
| FHA | MIP 1.75%, financed | Annual MIP ~0.55%/yr |
| Conventional | No upfront | PMI ~0.3–1.5%/yr, under 20% down |
| VA | Funding fee ~2.15%, financed | No monthly MI |
| USDA | Guarantee fee 1%, financed | Annual fee ~0.35%/yr |
Upfront fees are usually rolled into the loan. Annual MIP and PMI are paid monthly. Conventional PMI can drop off at 20% equity. These percentages are typical but not guaranteed. Confirm current rates for your situation.
How lenders see your income
Underwriters look for income that is stable and likely to continue. How they document it depends on how you are paid.
| How you're paid | How lenders count it |
|---|---|
| Salaried | The most straightforward. Lenders use your annual salary as monthly income, verified with recent pay stubs and a W-2. |
| Hourly | Lenders average your hours. Steady full-time hours qualify cleanly. If they swing, expect a conservative two-year average. |
| Variable | Commission, bonus, and overtime usually need a two-year track record, averaged and trending flat or up, not down. |
| Self-employed | Usually two years of tax returns. Lenders use your net income, after write-offs. |
Non-traditional income
Qualify on documentation other than tax returns. A fit for self-employed borrowers and more complex profiles.
- 12 or 24-month bank statements
- 1099-only
- Profit and loss statement
- Assets as income
- No-income options
Try not to change jobs or income structure right before you apply. A recent switch, especially into self-employment, can pause qualifying until there is a track record.
Debt-to-income, simplified
DTI is the number lenders lean on most. It compares what you owe each month to what you earn before taxes.
DTI = Total monthly debt ÷ Gross monthly income
Lenders check two ratios. Your housing ratio (the front-end ratio) looks at your housing payment alone. Your total DTI (the back-end ratio) adds your other monthly debts to that payment. For example, on $10,000 of monthly income, a $3,000 housing payment is a 30% housing ratio. Add $1,000 of other monthly debts and your total DTI is 40%. Each loan program sets a limit for both, and you need to be within both.
Worked example (edit the numbers to try your own)
Under 43%43 to 49.9%50 to 56.9%57% and above
No DTI guarantees approval. A complete application is required to determine eligibility.
Many programs stretch into the mid-40s with strong credit and reserves. Lower is always safer.
What counts as monthly debt
Lenders add up the required monthly payment on each of these, not the full balance.
- Installment loans
- Fixed payments over a set term, until the loan is paid off. Auto, student, and personal loans.
- Revolving debt
- Credit you can borrow, repay, and borrow again up to a limit, with a minimum payment due each month. Credit card minimum payments.
- Court-ordered
- Payments a court requires you to make. Child support and alimony.
- Co-signed debt
- A loan you guaranteed for someone else. Counts unless someone else has made the payments for the past 12 months without your help.
Maximum total DTI (back-end) by agency · General guidelines
Maximum housing ratio (front-end) by agency · General guidelines
Bars show each program's general maximum on a scale of 0 to 60%. A program may fit only if you are within both its housing ratio and its total DTI limits. Caps flex with automated-underwriting approval, credit, and cash reserves. VA has no set cap and weighs the income left over after your bills (residual income) rather than a strict ratio.
Not all homes finance alike
The kind of property you choose affects your loan options, your approval, and your monthly costs.
Single-family The most flexible to finance. Nearly every program qualifies, and you own the home and land outright.
Condominium You own your unit; the building is shared. The project must be lender-approved, and you'll pay HOA dues.
Townhouse Financing depends on the structure. Some are treated like a single-family home. Others are condo-style and follow condo rules.
Multi-family (2–4 units) Buy up to four units with residential financing if you live in one. Projected rents can even help you qualify.
Manufactured or mobile Must be permanently affixed and titled as real property. Loan options are narrower and terms vary.
Modular Built in sections and assembled on a permanent foundation. Finances much like a site-built single-family home.
For a townhouse, confirm whether it is "fee simple" (you own the land) or a condo-style structure. It changes your loan options and your approval path.
Let the house help pay
"House hacking" means buying a home that helps cover its own mortgage. You live in it, rent out part of it, and put that income toward your payment.
Rent out rooms
Bring in a roommate or two. Their rent offsets your payment from day one. The simplest place to start.
Buy a multi-family
Live in one unit of a 2 to 4 unit property and rent the rest. Low-down primary-residence loans apply, and projected rents can help you qualify.
Add an ADU or in-law suite
Find a property with a legal accessory dwelling unit or mother-in-law suite you can rent out separately.
Example only. Rental income rules vary by program.
To get the best terms you'll usually need to live in the home (owner-occupancy, often for at least a year), and lenders have specific rules for counting rental income. We'll help you run the numbers before you buy.
HOA or condo association?
Both collect dues and set the rules, but they cover very different things. Know which one you're buying into and what it means for your budget.
HOA · Single-family and townhomes
Homeowners association
Covers: shared amenities, common areas, landscaping of common grounds, and community standards.
Pros
- Typically lower monthly dues
- You own your home and lot outright
- Amenities and maintained common areas
- Protects neighborhood standards and value
Cons
- You maintain your own roof, exterior, and yard
- Rules on paint, parking, pets, and rentals
- Special assessments and violation fines are possible
COA · Condos and condo-style homes
Condominium association
Covers: the building exterior, roof, structure, shared systems, grounds, and a master insurance policy.
Pros
- Exterior, roof, and structure maintained for you
- Master insurance on the building
- Amenities with little hands-on upkeep
- Great for lock-and-leave living
Cons
- Higher monthly dues
- Project must be lender-approved to finance
- Bigger assessments for building repairs; less control
Either way, ask for the association's budget, reserves, and CC&Rs before you sign. Weak finances, low reserves, or a high delinquency rate can cost you money, or your financing.
Whose name is on it?
"Title" is how ownership is legally held. The right choice depends on your situation, so it's worth deciding on purpose.
- Sole ownership
- One person holds title alone, with full control. Best when you're buying solo and want no shared claims on title.
- Joint tenancy
- Equal co-owners with right of survivorship. A share passes automatically. Best when co-owners want the home to pass directly and skip probate.
- Tenancy in common
- Owners hold shares, often unequal. They can sell or leave their share to heirs. Best when partners invest unequally or want to name their own heirs.
- Tenancy by the entirety
- Married-couple ownership with survivorship and creditor protection. Best when married Florida couples want to shield the home from one spouse's creditors.
- Community property
- Marital ownership split equally under community-property law. Best when you're in a community-property state. Florida is not, so it rarely applies here.
- Living trust
- Title is held in a revocable living trust you control. Best when you want to avoid probate and set how the home passes on.
This isn't legal advice. How you hold title affects taxes, inheritance, and liability, so talk it through with an attorney or your title company.
Mortgage jargon, decoded
A quick reference for the terms you'll hear along the way. When in doubt, ask your loan officer to walk you through it. That's what we're here for.
The short answers
The questions first-time buyers ask us most, answered in a few lines. Each one points to a topic you can read in full above.
What is a mortgage?
A mortgage is a loan you use to buy a home, secured by the home itself. You put some money down, borrow the rest, and repay it with interest over time, usually over 15 or 30 years.
How far ahead should I start preparing to buy a home?
About twelve months gives you room to move without rushing. This guide breaks the year into five phases: take stock, build the foundation, get your paperwork ready, get pre-approved, and hold steady until you close.
What credit score do I need to buy a home?
Loan programs start at different credit scores. Typical minimums are 580 for FHA, 600 for VA, 620 for USDA, 620 for Conventional (with the best pricing at 780 and above), and 660 or higher for Non-QM. Your qualifying score is based on the lowest middle score of any applicant on the loan.
How much cash do I need to close on a home?
Cash to close is your down payment plus your closing costs. Typical down payment minimums are 3 to 5% for Conventional, 3.5% for FHA, and 0% for VA and USDA. Closing costs are separate, and a good budget is 2 to 5% of the purchase price on top of your down payment.
What is debt-to-income ratio (DTI)?
DTI compares what you owe each month to what you earn before taxes: total monthly debt divided by gross monthly income. As general guidelines, the typical maximum total DTI is about 50% for Conventional, about 57% for FHA, and about 43% for USDA. The housing payment alone, the front-end ratio, is typically capped at about 50% for Conventional, about 47% for FHA, and about 33% for USDA. VA has no set cap and looks at residual income instead. These caps flex with approval, credit, and cash reserves.
Can I use cash saved at home for my down payment?
Physical cash cannot be counted until it is seasoned. Deposit it into a bank account at least two months (60 days) before you seek pre-approval so it counts as usable funds.
Does the workbook save my progress?
Yes. Your entries save automatically in the browser and on the device you are using. They stay private, and Matek does not see them. To keep a copy or share it with your loan officer, use Print or save as PDF. Clearing your browser data removes what you saved.
Put the plan to work
Seven worksheets to track your progress, gather what you need, and walk into your first conversation already ahead. Fill them in here, or print them.
Your entries save automatically as you type, right here on this device. They stay private, and Matek does not see them. To keep a copy or share it with your loan officer, use the button below to save a PDF. Clearing your browser data removes what you saved.
Your readiness scorecard
Rate where you stand on each of the four pillars today. A low score isn't a problem. It shows where the next twelve months go to work.
For each pillar, choose a rating from 1 to 5. A 1 means you are just starting, and a 5 means you feel strong. Then write one small action you could take next, such as "pull my credit reports."
You don't need all four pillars to be perfect to start. Bring this page to your first conversation and we'll build the plan together.
Credit snapshot and builder log
Write down your three credit scores and set a goal. If you are building credit from scratch, use the log to track your monthly payments. Lenders qualify you on the middle of your three scores.
My current scores
Enter the score from each of the three credit bureaus. We will find the middle one for you.
My goal
Choose the score you are aiming for and the date you would like to reach it.
Credit-builder loop log
This log tracks the credit-builder loop from section 04. If you already have a score, you can skip it. Here is how to use it:
- Each month, enter what you paid on your secured loan and on your secured card.
- Choose Yes if both payments were made on time.
- Enter how much of your card limit you used, as a percentage. Aim to stay under about 10 to 30%.
| Month | Secured loan payment | Secured card payment | On time? | Card use % |
|---|
How much home can you afford?
A simple way to estimate how much home you may be able to afford. Work through the eight steps in order. Each one explains what to enter, and your results build at the bottom. The estimate uses a maximum total debt-to-income ratio of 43%.
Actual qualification varies with your loan program, credit, down payment, property taxes, insurance, HOA dues, mortgage insurance, and underwriting requirements.
An example first
Here is how the numbers flow for a household earning $96,000 a year. Your own steps below work the same way.
- Annual gross income
- $96,000
- Gross monthly income ($96,000 ÷ 12)
- $8,000
- Max total monthly debt ($8,000 × 43%)
- $3,440
- Current monthly debts
- $600
- Max housing payment ($3,440 − $600)
- $2,840
- Taxes, insurance, HOA, MI
- $750
- Available P&I ($2,840 − $750)
- $2,090
- Interest rate 7% → multiplier
- 150
- Estimated loan ($2,090 × 150)
- $313,500
- Down payment
- 5%
- Estimated home price ($313,500 ÷ 95%)
- ≈ $330,000
What you earn each month
Gross income is your pay before taxes and other deductions come out. It is the bigger number on your pay stub. Enter each yearly amount, and we will work out the monthly figure for you.
The most you can spend on debt
Lenders generally want all of your monthly debt payments, including your future home payment, to stay at or below 43% of your monthly income. This step shows that limit in dollars.
What you already pay each month
List the minimum monthly payment on each debt you have today. Use the payment, not the balance you owe. Leave out utilities, groceries, phone bills, and other living costs unless they are a loan.
What is left for housing
Take the most you can spend on debt and subtract what you already pay. What remains is the most your future home could cost each month. That amount has to cover the whole monthly housing cost, not just the loan payment.
Your current monthly debts are above the 43% planning ceiling, so the estimate shows $0. That is a starting point, not an answer. A loan officer can look at which debts to pay down first.
Other home costs
A home payment includes more than the loan. Enter your best estimate for each monthly cost below. If you do not know yet, leave it blank and ask your loan officer to help you estimate it.
What is left for the loan payment
Subtract the other home costs from your housing budget. What remains is the monthly payment available for the loan itself. Lenders call this principal and interest, or P&I: the part of your payment that repays what you borrowed, plus the interest.
How much you could borrow
Enter the interest rate you expect to get. We use it to turn your monthly loan payment into a loan amount. The multiplier below does that conversion. It is filled in for you, and it assumes a 30-year fixed loan.
Your estimated home price
The loan is only part of the price. Add the down payment you plan to make, and you have an estimated home price.
What payment feels comfortable to you?
A lender may approve a payment higher than the one you would personally feel comfortable with. Your budget should also account for utilities, maintenance, childcare, transportation, savings, and lifestyle expenses.
Final results summary
This worksheet is for educational and estimation purposes only. It is not a loan approval, prequalification, preapproval, or commitment to lend. Interest rates, taxes, insurance, HOA dues, mortgage insurance, credit requirements, and underwriting guidelines may vary. Consult a licensed mortgage professional for a complete qualification review.
Cash to close and savings
Two buckets make up the cash you'll need: your down payment and your closing costs. Set your targets, then log your savings toward them.
Monthly savings log
| Month | Amount saved | Running total |
|---|
Physical cash can't be counted until it is seasoned. Deposit it into a bank account at least two months (60 days) before you seek pre-approval so it counts as usable funds.
Document checklist
Gathering these early keeps your approval moving. Check them off as you collect them, and keep digital copies in one folder.
Keep bank statements clean and avoid large, unexplained deposits in the months before you apply. Every big deposit has to be sourced and documented.
12-month action tracker
Work the plan phase by phase. Check each task as you finish it and add a target date to keep yourself on track. Adjust the pace to your own situation.
Home wish list and comparison
Get clear on what you need before you fall for what you want. Then score up to three homes side by side so the decision stays grounded.
Part 1 · Your wish list
Write what matters to you in each box. Start with the must-haves, so they guide your search before you fall in love with a particular house.
Needs: the must-haves
Things the home has to have. If one is missing, the home is not an option.
Wants: the nice-to-haves
Things you would like, but could live without.
Dealbreakers
Anything that would make you say no, no matter what else the home offers.
Target areas
The neighborhoods or cities you want to search.
Property types I would consider
Check all that apply.
Part 2 · Compare up to three homes
After you tour homes, fill in one column for each home. Seeing them side by side, next to your wish list, helps keep the decision grounded.
| Home A | Home B | Home C |
|---|
Ready for the next step?
Wherever you are on the roadmap, a quick conversation goes a long way. We'll look at your situation, talk through your options, and help you build a plan that fits. No pressure, just clarity.
Maitland, FL 32751
This guide is for general educational purposes only and is not a commitment to lend or an offer of credit. Rates, programs, and guidelines are subject to change and vary by borrower. Figures shown are typical industry ranges, not guaranteed terms. Consult a licensed loan officer, attorney, and tax professional about your specific situation. Last reviewed November 2026.