Dave and Kelly Davis
First Time Home Buyer Cheat Sheet and Guide
Dave and Kelly Davis
First Time Home Buyers:
You have questions??? We have the answers:
STEP 1: WHAT SPECIAL FINANCING OPTIONS CAN YOU GET?
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There are lots of financing options available for home ownership that we can get into in STEP 2. But lets highlight some of the benefits in this step
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$6,000 down payment program IHDA
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Illinois has a $7,500 down payment assistance program that is available to new home buyers. This loan is a great way to help with your down payment on a new house. The great side of this is that the loan does not need to be paid back if you stay in the house 5 years!!! How great is that? If you move before 5 years a portion of the loan may need to be paid back
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4.5% down payment grant
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There is another great program out there that allows home buyers to get up to 4.5% of the purchase price as a grant. On top of that you can also get a seller credit of up to 6%.
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$3,000 in lender paid closing credits
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Some lenders are willing to pay your lender fee's for you on a loan. Each lender has different programs, but most will give a credit towards your lender fee's or do a $0 cost program for you
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STEP 2: WHAT TYPE OF MORTGAGE SHOULD/CAN YOU GET?
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FHA Loan: FHA loans are get for first time buyers. They typically require as little at 3.5% down on a purchase. On top of that they do allow for seller closing credits to be used as well. So those who might not have a lot of money for a down payment are able to purchase with very little money out of pocket. Most FHA loans will have an extra PMI cost. It's also know as mortgage insurance. It will be an extra monthly expense added into the mortgage to protect the lender. Another benefit is that the credit score limits are typically lower than other loans.
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Conventional Loans: Conventional loans were typically 20% down loan programs. Recently there have been lower down payments allowed as low as 5% for conventional loans. Conventional loans typically require a higher credit score, but the PMI can be dropped when you have 20% equity in your house.
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VA Loans: Veterans can get some great 0% down no PMI loans through use a of a VA loan. If you were a service member ask us about getting in touch with a great VA lender to see your options.
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USDA loans: The USDA has loans available to help boost the population of rural areas. Usually defined at a population under 35,000. These loans are available with 0% down payment as well
STEP 3: TIPS TO GET MORE MONEY
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Did you know that you can ask the seller of a house for closing credits? So what does that mean?
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Most lenders will usually allow you to get up to 5% cash back from a seller at closing. This money can be used in one of two ways.
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You can use this to limit the amount of money you need to bring to closing. If you are doing an FHA loan that requires 3.5% down, you can use the seller credit to cover that cost
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You can also use the credit to update the house. Say you want to put in new flooring or update appliances. You can walk away from the closing table with a check in hand to use how ever you like. This option will increase your overall mortgage loan, but can use useful if you would like to update the house and roll the costs into your overall loan.
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STEP 4: HOW TO GET STARTED
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Get Pre-Approved: Ask us for a list of our favorite lenders who utilize the programs mentioned above. You can choose the lender you feel most comfortable with and start the lending process.
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Get our list of lenders:
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Start searching for your house! This is the fun part. We can also set up a custom search to help you find all the houses that fit what you are looking for.
Use this button to get a feel for the home buying process and what you can expect
STEP 5: CONTACT US:
We know you will probably have more questions so we are here for you. Call us anytime to ask questions. We love first time home buyers are happy to work with you.
Call/Text: (815) 546-7621
Email dave@daveandkellydavis.com
