Ready to start hunting for your first home? Congratulations! If you’re looking for your local lending experts, the friendly Lake Region Bank home loan team is here to support you. In the meantime, learn a little bit about the home loan process with our tips for first-time home buyers.
Be Prepared to Get Personal
During the home buying process, lenders will need to scrutinize your finances. Be prepared to share some basic personal financial information with your lender (this is why it pays to work with a lending team you trust). It’s common for first-time buyers to be surprised by how much financial information is required to secure a home loan, from incomes and work histories to credit scores and histories. However, collecting this information is a normal part of the loan process because it helps lenders decide if and how much they will lend to you.
Don’t Sweat Your Short Credit History
Many first-time home buyers think they won’t qualify for financing if they don’t have a lengthy credit history. However, there are some circumstances where you can qualify without having traditional credit. Some mortgage programs will allow non-traditional credit references. These can be things like rent, utilities, insurance, or medical bills. If we can verify you have paid these bills on time for the past 12 months, then you may qualify. If this is something you want your lender to pursue, it’s important to save copies your bills and bank statements so your loan officer can prove to potential lenders that you have made the payments on time (i.e., no more than 30 days late).
Getting preapproved for your home purchase is one of the most powerful things you can do as a first-time home buyer. Obtaining preapproval focuses your home search by giving you an idea of what you can afford. It also streamlines the offer process, as it tells sellers that you are serious and will be able to move forward with financing if your offer is accepted. All it takes is a conversation with your Lake Region Bank lender.
Work with a Local Realtor
The Realtor you work with can be very important, especially if you are a first-time homebuyer. It’s always a good idea to use a local Realtor. A local Realtor knows the area, neighborhoods, title companies, and other resources that will make the process go much more smoothly. This can save you money as well as time. A local Realtor will be more available to you since they don’t have to travel to meet with you. Your friends, family, or your loan officer may be able to make recommendations on whom to work with.
One note on how your Realtor gets paid: The seller typically pays your Realtor. That’s right, Realtor’s fees are rolled into the seller’s end of the purchase agreement. Then, your Realtor and the seller’s Realtor split the fee. You will only pay for your own closing costs.
If you are thinking about buying a home in the next year or so, reach out to your lending team now. This will give you time to prepare for the big investment you’re making. Your Lake Region Bank lender can run your credit report for you so you can work on any trouble spots before you apply for a home loan and prepare a preapproval letter. To work with your friendly, local home loan experts, reach out to Lake Region Bank today.