Buy A Home

When considering how much you can afford, remember a few guidelines. 

1. Start with your income and any existing debt obligations. Percentages vary, but a traditional rule of thumb has been housing payment + housing taxes + housing insurance shouldn’t exceed 28% of your gross monthly income.
2. Total monthly debt payments (including housing) should ideally stay below 36% of your gross monthly income. More conservative advice suggests limiting housing expenses to 25% of your take-home pay. Also, factor in how much you have saved for your down payment. 

Check Out Our Calculators about How much can I afford?

Traditionally, 3% of your mortgage as a down payment has been required, however more lenders are flexible now. To avoid paying for private mortgage insurance (PMI), you will want to pay 20% of your mortgage as a down payment. According to a National Association of Realtors report, “in 2024, the median down payment among all buyers was 18%, nine percent for first-time home buyers, and 23 percent for repeat buyers.” These metrics can change depending on the type of loan you are acquiring, see a loan professional for specific information about your situation.

Your down payment also depends on your loan type (Conventional, Government, Jumbo). We offer mortgage loan programs that allow up to 100% financing with a minimum down payment of $500 on 1-unit properties. Some buyers may also qualify for a Down Payment Assistance (DPA) Program that will help ease the upfront cost of the down payment. Check Out Our Home Affordability Calculator about How much do I need for a down payment?

The industry average for closing costs is approximately 2% to 3% of your loan amount. Typically, our closing costs are below this average. A mortgage loan expert will provide a loan estimate (LE) outlining your estimated closing costs. You will also receive a closing disclosure (CD) before closing to finalize the cash to close. Considering financing closing costs? Learn more on the Sunflower Bank website about How much cash will I need for closing costs?

• Pre-approval and pre-qualification are not the same thing. However, some lenders use them interchangeably, as every lender handles approval differently.
• Pre-qualification states that you will qualify for a mortgage. However, it might not accurately represent how much you will be approved for. Pre-qualification does not use your credit report; without this, a lender can only estimate your pre-approved amount.
• Pre-approval is a more official step where lenders look at your income, assets and credit score to determine the loan amount and interest rate that you will receive.

Learn More About Pre-Approval and Pre-Qualification on the Sunflower Bank website about What is the difference between pre-approval and pre-qualification?

To determine the right loan for your needs, consider the following:

• How much money have you saved for a down payment and closing costs?
• How long do you plan to own the home?
• Are there any issues with your credit history that may impact your loan approval or interest rates?
• What are your short-term and long-term financial goals?
• Ideally, how many years would pass before the home loan is paid off?
• Are there any upcoming financial obligations or events to consider, such as college tuition?
• Do you have a stable income stream (base salary), or does your income fluctuate (self-employed or commission income)?
• How comfortable are you with potential changes in interest rates for a lower rate upfront?

No single loan program is the right fit for everyone. Talk to a First National 1870 home loan professional to find the right solution for you. Find a Local Loan Expert about How do I select the right mortgage loan for my needs?