Home Loan Truths for First Time Home Buyers

January 22nd, 2016

Our friends Katie Lindquist and John Schroder from the Madison branch of Great Midwest Bank have graciously shared with us their expert tips for first time home buyers in search of a loan. It’s likely you have more options than you realized when it comes to financing the purchase of a home or condo in Madison. Read on for the good news. . .

The home buying process can seem overwhelming, time-consuming, and just plain confusing, especially when it comes to getting a loan. First time home buyers can sometimes find themselves misinformed and misguided. At Great Midwest Bank, we help our customers navigate the process smoothly, confidently, and armed with the right (and correct!) information. Here’s a snapshot into some “Home Loan Truths” that might just put you into the home of your dreams.

Truth #1: There are low down payment options available, and in many cases part or all of your down payment can be provided by a relative, fiancé, or partner. You don’t necessarily need a lot of savings to buy a home! Many loan options these days have minimal down payment requirements and depending on your credit and debt-to-income situation, it’s possible all of your down payment can be gifted by a family member for your purchase.

Truth #2: In certain cases you can qualify for a home loan even though you’ve just started your career. Are you a recent college graduate entering a career related to your degree? Your new income may qualify you for home ownership. You may have been told you need at least two years in your current job to qualify for a home loan, but this doesn’t have to apply if you’re about to start a career in the field in which you recently received a degree.

Truth #3: Non-traditional credit doesn’t need to be a roadblock to getting a home loan. Not everyone has traditional credit scores from the three major credit bureaus in the United States (typically requiring at least three credit lines, each with a minimum 12-month payment history), but many do have rental, utility, and other payment histories that can help establish credit worthiness. In the right scenario, we can qualify a loan applicant using such non-traditional credit sources.

Truth #4: The income of a willing co-applicant can help you qualify for a home. If you are limited by your income, debt load, or both, there are guidelines that will allow for another individual to co-sign on your loan with you. This would enable us to use the income, debt, and credit information of your “co-applicant” along with your information for home loan qualification.

Truth #5: Some of the expenses of owning a home may actually save you money when filing your taxes! The costs of home ownership can seem high, but some of them are actually tax-deductible. These deductible expenses can include real estate taxes, home mortgage interest, and mortgage insurance premiums. A tax professional can verify your deduction options and show you how to correctly file your taxes for these benefits.

Truth #6: Getting preapproved for a home loan is simple, free, and fast! At Great Midwest Bank we tailor the preapproval process to you, meaning you can apply online, in person, via email, fax, or over the phone. Whatever your preferred method, we’ll give you a speedy preapproval response (often within 24 hours!). We’ll also make sure you understand the process, give you upfront cost estimates, and offer you the best-suited loan options for your situation. Give us a call at 608-833-4400 and ask for John or Katie, or visit us atwww.greatmidwestbank.com!  

[John Schroder NMLS ID #967896, Katie Lindquist NMLS ID #1123785.]

Note: The information above is based on current underwriting standards, subject to change. Items considered for home loan preapproval include but are not limited to income/employment, credit scores/history, and debt/liability information.