What First-Time Home Buyers Need to Know Today

Jocelyn Retz, 1st Vice President—Home Loans jretz

There’s a first time for everything. When it comes to home buying, having a resource who can show you the ropes and guide you through your financing options isn’t just helpful—it can save you money.

You Have Options…Lots of Options

First-timers have choices. Each of the mortgage programs serving first-time home buyers in our area have different terms, benefits and uses. Some are more appropriate for new construction, while others can provide added benefits if you are buying a fixer-upper.

Probably the most familiar option is the Federal Housing Administration FHA mortgage. These often have less stringent standards than most conventional lending programs. However, not all homes will qualify. While FHA-insured loans used to be the choice for those seeking to make a low down payment (with a 3.5 percent minimum), some conventional loans now offer an even lower down payment option for borrowers with good credit at just 3 percent.

Veterans have access to even more flexible programs with no down payment requirement. The further away you are from the Chicago Metropolitan area, the likelihood increases that you may be able to borrow through the United States Department of Agriculture (USDA), which offers another zero percent down payment program with attractive terms for those settling down in rural areas.

The State of Illinois, through the Illinois Housing Development Authority (IHDA), is another source of financing for first-time home buyers who work with Old Second. Its 1ST Home Illinois mortgage offers generous down payment assistance to working class families.

While a lot of buyers today look to their friends and family members for advice, the features and requirements of some of the better known mortgage programs have changed recently. By working directly with a community-based lender who participates in a wide variety of programs—not every lender does—you can make a more informed decision about what would be most advantageous for your financial situation. In particular, you can find out how much it will cost you over time.

Don’t Just Get a Mortgage—Get Advice

While many lenders now take applications online and communicate via text and email—Old Second included—having a person to talk to as your application makes its way through the review process can help you understand how it works and what additional requests for information mean. That said, the mortgage process isn’t as complicated as most people think. Compared to what borrowers go through to receive and repay a student loan, for instance, this can be much simpler.

Many of the conventional mortgages Old Second makes continue to be serviced by us after they close. Some clients find it reassuring that after the effort they make to choose the right lender, they will have an ongoing relationship with that same lender over the life of their loan. That is not typical outside of a community-based bank. However, the way we see it, our reputation as a bank, as employees and your neighbors is on the line when we work with you. We want to be there for you from the beginning of the process through your closing—and for the party to celebrate your paid-off mortgage!

For more information on how we work with our first-time home buyers, visit us here or call 1-877-966-0202. We can’t wait to talk to you about what we can do to help you succeed with your first big move.

 

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