Smart Tips for First-Time Homebuyers

June marks the beginning of summer—and for many, the start of homeownership. If you're a first-time buyer, closing on your new home is a huge milestone worth celebrating. But before you get too comfortable in your new space, it’s essential to prepare for what comes next: your first mortgage payment.

Unlike rent, a mortgage payment includes more than just the loan itself. To avoid surprises and start strong financially, here’s a breakdown of what to expect—and how to budget smartly.

1. Understand What’s Included in Your Mortgage Payment

Your monthly mortgage payment often covers more than just principal and interest. Here’s what’s typically included:

• Principal – The portion of your payment that goes toward paying down the loan balance.
• Interest – What you pay your lender for borrowing the money.
• Escrow – An account your lender uses to pay property taxes and homeowners' insurance on your behalf.
• Taxes and Insurance – These vary depending on your home’s location and value, but can significantly impact your monthly payment.

At Consumers National Bank, we help you understand your full monthly payment estimate before you close, so you can plan ahead with confidence.

2. Don’t Forget About Upfront Costs

Many first-time buyers focus on the down payment and closing costs, but your first mortgage payment usually comes due one full month after closing. This gap can be helpful, giving you time to adjust your budget.

Use that first month to:

• Set aside funds for your mortgage and other bills.
• Build a cushion for unexpected homeownership costs (like utilities, maintenance, or HOA fees).
• Review your escrow account details and adjust your savings strategy if needed.

3. Set Up a New Monthly Budget

Homeownership often brings new expenses, and it’s wise to plan ahead. Try this simple budgeting approach:

• 50% Needs: Mortgage payment, utilities, groceries, insurance.
• 30% Wants: Dining out, entertainment, travel.
• 20% Savings & Debt Repayment: Emergency fund, retirement, student loans, or extra mortgage payments.

Apps and budgeting tools can help you automate tracking, so you always know where your money is going.

4. Monitor Escrow and Tax Changes Annually

Escrow accounts aren’t “set it and forget it.” Property taxes and insurance premiums can rise over time, which might increase your monthly payment during annual escrow reviews.

Consumers National Bank sends clear annual statements to keep you informed. Still, it’s a good idea to review your county’s tax updates and homeowners insurance renewal notices to avoid surprises.

5. Talk to a Mortgage Specialist Early

If you’re still in the planning stages of homebuying, talking to a mortgage expert early can help you build a realistic monthly budget from day one. We'll walk you through estimated payments, escrow details, and explain how different loan programs might impact your costs.

Ready to Buy with Confidence?

Your first mortgage payment is a big step, and with the right plan, you’ll be ready. At Consumers National Bank, our mortgage team is here to guide you every step of the way, from pre-approval through your first payment and beyond.

Connect with a local mortgage lender today to start your homeownership journey on the right foot!