Reviewed by: Cindy Hatcher
Are you “ready” to buy your first home? one Birmingham expert explains
Reading time: 5 minutes
Sponsored
Between rising home prices and even higher rents, buying your first home can feel… intimidating.
That’s exactly why Bham Now teamed up with local experts at AmFirst to break down confusing terminology into plain English—and maybe help potential first-time buyers feel a little less overwhelmed.
We spoke with Jessica Riddell, Director of Mortgage Services at AmFirst, about what you actually need to know before getting started.
Check these 3 boxes before you dive in
As someone in my mid-20’s, I’ve been starting to wonder if buying a home is realistic for me. According to Jessica, there are three key steps to start out with before you even start thinking about things like down payments and loans.
- Narrow down a location: First, find an area or neighborhood you like! Maybe it’s near work, close to family or simply within budget.
- Set a realistic budget: Use an online calculator (like this) that estimate your monthly payment based on income. They’re pretty accurate—but remember, your mortgage payment isn’t the only cost.
- Find a local realtor you trust: A good realtor will help you navigate property taxes, insurance estimates + the fine print.
And if you’re already paying high-end rent, you may be able to afford a house payment.
“Renting has become the norm, but rents are so high. Frankly, if you can afford the rent, you can likely afford a home.
However, a lot of rentals include things like utilities and water. Just be mindful of where you want to buy and what costs are not included.”
Your mortgage payment isn’t the only cost. For example, here are some things to factor into your budget:
- Property taxes
- Homeowners insurance
- Utilities
Fun fact (or not-so-fun): Property taxes can vary widely depending on where you buy. Homes inside certain city limits in Jefferson County, for example, often carry higher taxes than those outside city limits. A realtor can help you look up exact numbers before you make an offer.
As for insurance? It’s influenced by things like your credit score, location and even how close you are to a fire station.
Jessica’s rule of thumb when estimating:
- $150/month for homeowners insurance
- $150–$200/month for property taxes (until exact figures are confirmed)
What is “pre-qualification,” anyway?
If you’re like me, you’ve probably heard the term pre-qualification and thought “what does that even mean?“
Jessica spelled it out for me: Pre-qualification is when a lender checks your credit and reviews your income to estimate how much home you can afford.
At AmFirst, that includes:
- Pulling your credit report
- Reviewing your monthly income
- Calculating your debt-to-income ratio (DTI)
Your DTI compares your total monthly obligations (car payments, credit cards, student loans plus your estimated house payment, taxes and insurance) to your gross monthly income. For AmFirst’s first-time homebuyer product, that ratio must be 40% or less.
Translation? You don’t want to be in extreme debt, and they don’t either. Some lenders allow higher ratios, but AmFirst keeps it conservative to help members stay financially comfortable long-term.
Bonus: Many realtors won’t start showing homes until you’re prequalified. It shows you’re serious—and ready.
Let’s talk down payments + PMI
One of the biggest myths about homeownership? You have to put 20% down. But that’s not necessarily true.
AmFirst offers 100% financing for qualified first-time buyers (up to $350,000). That means if the home costs $100,000, they can finance the full $100,000.
And here’s the kicker: They don’t charge private mortgage insurance (PMI) on their loan products.
PMI is typically required when you finance more than 80% of a home’s value. It protects the lender (not you) and can add $100–$250+ per month to your payment. It also sticks around until you reach 80% loan-to-value.
That can make a major difference in monthly affordability.
Benefits for first-time buyers
Not sure if it’s the right time? Jessica says that’s okay.
“We’ll help you figure out if this is the right time. And if it’s not, we’ll go through the steps of what you need to do to make it the right time.”
AmFirst’s First-Time Homebuyer* program offers qualifying members the opportunity to own a home at an early age, with no PMI required and personalized support from start to finish.
To qualify as a first-time homebuyer under Fannie Mae guidelines (a leading source of mortgage financing in the United States), you simply must not have owned a home in the past three years.
You do need to become an AmFirst member to close on the loan—but you don’t have to be one to start the process. The team will even walk you through membership during the loan journey.
Ready to see what’s possible? Connect with AmFirst + take the first step toward owning your first home.
Sponsored by:
*The interest rate, Annual Percentage Rate (APR) and origination fees are subject to change without notice and will depend on creditworthiness and loan-to-value ratio. This program is available to consumer members only and the subject property must be a member’s intended primary residence. Members must meet underwriting criteria and are subject to approval and verification of income, credit and availability of funds for closing costs. Title insurance and property insurance are required. Applicants must complete home-buyer’s education class prior to closing. Program may be discontinued at any time. Maximum loan amount up to $350,000.
