If you are on this page, you are already considering buying your first home in Illinois.
Where to begin? Tips for First-Time Home Buyers in Illinois
There is a lot of information on the Internet about purchasing, but all of it is pretty inaccurate and vague. When it comes to buying a first home, many people feel uncertain. And this is quite logical! After all, you have never encountered this, but there are a lot of nuances. You need to understand mortgage programs for first time home buyers (FHA), the average cost of housing, and financing the purchase. Therefore, developing a clear action plan with a mortgage broker in Illinois is better. And it’s best to do this before you start looking for a home.
Buying a house should only cause pleasant experiences — you are purchasing a home where you will build your comfortable life and make your dream come true. To ensure everything goes well, keep a few essential things in mind before attending open houses in Illinois.
Buying a home starts with getting pre-approved from a local lender in Illinois.
With pre-approval, you can determine your financial situation and know what to expect when purchasing a home. The pre-approval letter tells you how much the lender will lend you to buy your house. This way, you can look at homes in a particular price range.
Once pre-approved, you can start looking for homes in Illinois and working with a real estate agent. Understanding your budget will help you look only at houses you can buy — depending on location, number of rooms, and availability of additional options.
Typically, a mortgage lender is found through friends, relatives, or colleagues who have already used their services. But choosing a lender that suits your goals is also worth researching.
Why should you choose a mortgage broker over an online lender?
You’ll work with a mortgage broker to audit your finances, set your goals, and learn what Illinois real estate you can buy and what loans you qualify for. A mortgage broker will tell you all the details of the mortgage market:
- Interest rates
- Monthly payments
- The procedure for applying for a mortgage
- Financing programs for which you can qualify
What financial assistance can first-time home buyers receive?
Any first-time home buyer may qualify for financial assistance from the US government. The most critical program in this process is the FHA. Banks, mortgage lenders, and the federal government offer loans under this program.
FHA Home Loan
Federal Housing Administration loans are for borrowers with lower credit scores and down payments. At the same time, the numbers could be completely different. For example, borrowers with a credit score of 580 and a 3.5% down payment can apply for such a loan — and also borrowers with a score of 500 or more but a higher down payment of 10%.
VA loans
These loans come from various lenders and are insured by the Department of Veterans Affairs. Veterans, active or retired military personnel, and their spouses are eligible for this loan. The VA does not set minimum credit rating requirements, but lenders do. In some cases, the minimum score is 580. In others, it may be 660. Therefore, consider this point before applying for a mortgage. Another important point is that VA loans do not require a down payment.
Conventional loans
Conventional loans can be obtained from traditional lenders such as mortgage companies or banks. Also, third parties, credit unions, creditors, and charitable organizations provide them. Loans made by federally regulated borrowers, Fannie Mae and Freddie Mac, are also considered ordinary loans.
There are also non-qm loans such as stated income, bank statement mortgage, investment property loans. We can also help non-us residents with mortgage as well as all others with cash out refinance, lowering cost of your current mortgage payment, reduce closing cost of the loan, hard money loans and jumbo mortgages.
There are two types of conventional loans:
- Confirmation loans — the name speaks for itself. Such loans meet the standards the Federal Housing Finance Agency (FHFA) sets for credit, debt, and loan size. In 2023, credit limits reach $726,000 in most areas and $1,000,000 in high-cost areas.
- Non-confirmation loans — do not meet the standards of the FHFA. Such loans are suitable for borrowers determined to buy more expensive homes or buyers with an unusual credit history.
Other types of financial assistance for first-time home buyers in Illinois
If you want to buy a home but are experiencing financial difficulties, there are still plenty of options to consider. After all, whoever seeks will always find!
You can ask your employer about a company-sponsored home loan. Also, check with your bank or credit union to see what options are available to you. Many government programs can also benefit you — they are often aimed at people who don’t have savings or a lot of income. Try visiting the HUD website for Illinois for more information.
Contact LBC Mortgage for support throughout the mortgage process | Mortgage Broker in Illinois
Contact an Illinois mortgage broker to find the right financing programs for your individual needs. You can prepare for buying your first property and plan the entire process together.
Applying for a mortgage can be fun. After all, in the end, you will be purchasing your dream home.