First-Time Homebuyer Guide for Elizabethtown, KY

Buying your first home is one of the biggest financial decisions you will make, and Elizabethtown is one of the best markets in Kentucky to do it. With a median home price around $250,000, low property taxes, and multiple down payment assistance programs available, homeownership is genuinely achievable here — even if you think you are not ready. This guide walks you through every step, from getting pre-approved to picking up the keys.

Step 1: Assess Your Financial Readiness

Before you start browsing listings, take an honest look at your financial picture:

• Credit score. Check your score through your bank or a free service. Most loan programs require 580-620 as a minimum. Higher scores (700+) unlock better interest rates.
• Debt-to-income ratio (DTI). Lenders want your total monthly debt payments (including the future mortgage) to stay below 43-45% of your gross monthly income. Calculate your current debts and estimate where a mortgage payment would put you.
• Savings. You will need money for a down payment (potentially zero with VA), closing costs (2-4% of purchase price), and a cash reserve for emergencies. Even with low-down-payment programs, having $3,000-$5,000 saved gives you a cushion.
• Employment stability. Lenders look for at least two years of steady employment or income history. Military service counts, and active-duty LES documentation satisfies lender requirements.

Step 2: Get Pre-Approved for a Mortgage

Pre-approval is not optional in today's market — it is essential. A pre-approval letter tells sellers you are a serious, qualified buyer. Here is how the process works:

1. Contact a mortgage lender (bank, credit union, or mortgage company). In the Elizabethtown area, several lenders specialize in VA and FHA loans.
2. Provide documentation: pay stubs, W-2s or tax returns, bank statements, and ID. For military buyers, your LES and orders are key documents.
3. The lender pulls your credit, reviews your income and debts, and issues a pre-approval letter stating the loan amount you qualify for.
4. Pre-approval is free and typically takes 1-2 weeks. It is valid for 60-90 days.

Get pre-approved before you start touring homes. In Elizabethtown's competitive market, sellers and listing agents take pre-approved buyers far more seriously than those still shopping without financing in place.

Step 3: Understand Your Down Payment Options

The down payment is often the biggest hurdle for first-time buyers. The good news: you likely have more options than you realize.

• VA loan (0% down). Available to active-duty service members, veterans, and eligible surviving spouses. No down payment, no PMI, competitive rates. If you are stationed at Fort Knox or are a veteran, this is almost always the best option. See our full VA loan guide.
• FHA loan (3.5% down). Popular with first-time buyers who do not have VA eligibility. More flexible credit requirements (580+ score). On a $250,000 home, 3.5% down is approximately $8,750. FHA loans require mortgage insurance (MIP), which adds to the monthly payment.
• Conventional loan (3-5% down). Some conventional programs allow as little as 3% down for first-time buyers. Conventional loans avoid FHA's upfront mortgage insurance premium but require PMI until you reach 20% equity.
• Kentucky Housing Corporation (KHC) programs. KHC offers several programs specifically for Kentucky homebuyers, including down payment assistance (DPA) in the form of forgivable loans or grants. KHC's programs can be combined with FHA, VA, or conventional loans. Income and purchase price limits apply, and most first-time buyers in the Elizabethtown price range qualify.
• USDA loan (0% down). Available for properties in USDA-eligible rural areas. Some areas surrounding Elizabethtown qualify. Income limits apply.

Step 4: Find Your Home

With pre-approval in hand, it is time to search. In Elizabethtown, first-time buyers typically focus on the $180,000-$260,000 range, which includes:

• Three-bedroom, two-bath homes in established neighborhoods like Helmwood, Valley Creek, and Pear Orchard.
• Newer townhomes and starter homes in developments along Ring Road and south of town.
• Entry-level new construction in communities like Foxwood and Cowley Farms (higher end of the range).

Work with a local real estate agent who knows the inventory, school districts, and neighborhood dynamics. A good agent will help you avoid overpaying and identify properties that match both your needs and your budget.

Step 5: Make an Offer and Close

Once you find the right home, your agent will help you submit an offer. In Elizabethtown, the process typically looks like this:

1. Submit your offer with your pre-approval letter. Your agent will advise on pricing strategy based on comparable sales and current competition.
2. Negotiate terms. In E-town, most transactions involve some negotiation. You can request seller concessions toward closing costs, ask for repairs after inspection, or negotiate on price.
3. Home inspection. Always get a professional inspection, even on newer homes. In Kentucky, pay attention to foundation drainage (clay soil is common), HVAC condition, and the roof. Inspections cost $350-$500 and are worth every dollar.
4. Appraisal. Your lender orders an appraisal to verify the home's value. In Elizabethtown, appraisals generally come in at or above the contract price due to steady appreciation and ample comparable sales data. See our appraisal guide for details.
5. Final underwriting and clear to close. The lender completes their review and issues a clear-to-close. You will receive a Closing Disclosure at least three days before closing.
6. Closing day. Sign your documents at a local title company, pay any remaining closing costs, and receive your keys. The entire closing appointment takes about an hour.

Elizabethtown-Specific Tips for First-Time Buyers

• Consider school districts early. Elizabethtown Independent Schools and Hardin County Schools serve different areas. If schools matter to you, confirm which district a property falls in before making an offer.
• Watch for PCS season. May through August brings a surge of military buyers and sellers. Inventory increases, but so does competition. The best time to buy may be spring or fall, just before or after the peak.
• Budget for Kentucky-specific costs. Property taxes are low (approximately $2,675/year on a median-priced home), but factor in homeowners insurance ($1,200-$1,800/year) and potential HOA fees in newer subdivisions ($200-$600/year).
• Ask about seller concessions. In the current market, many sellers are willing to contribute 2-3% toward buyer closing costs. This can save you thousands at the closing table.

Frequently Asked Questions