Fall Into Your First Home: 13 Essential Tips for First-Time Homebuyers

Buying your first home is both exciting and overwhelming. As the leaves change and the weather cools, let’s jump into some essential tips that will help prepare you for the homebuying journey:

1. Assess Your Readiness

Before diving into the homebuying process, ensure you're financially and emotionally ready. Ask yourself:

• Am I ready to commit to a mortgage? Most mortgage terms are 15 to 30 years, so consider your long-term plans.
• Do I have a stable income? Consistent income is crucial for mortgage approval and ongoing payments.
• Do I have an emergency fund? Aim to have at least three months of expenses saved to cover unexpected costs.

2. Understand Your Budget

Knowing how much you can afford is essential. Consider:

• Down Payment: Typically, you should save 3-20% of the home’s purchase price.
  • MidWestOne Bank offers a $500 credit toward closing costs when you save $1,000 in a new personal savings account.
• Closing Costs: These can range from 2-5% of the loan amount and include fees for appraisals, inspections, and legal services.
• Monthly Payments: Include mortgage, property taxes, insurance, and maintenance costs.

3. Improve Your Credit Score

A higher credit score can help you secure a better mortgage rate. To improve your score:

• Pay bills on time.
• Reduce debt.
• Avoid opening new credit accounts before applying for a mortgage.

4. Get Pre-Approved for a Mortgage

Pre-approval gives you a clear idea of your budget and shows sellers you're a serious buyer. Gather necessary documents like W-2s, bank statements, and credit reports to streamline the process. MidWestOne Bank makes the pre-approval process easy. Contact one of our mortgage experts today!

5. Explore Loan Options

Different loans cater to different needs. Common options include:

• Conventional Loans: These loans can provide a great rate without having to pay a lot of added costs. Fixed-rate loans offer rate and payment security, while adjustable-rate mortgage loans have more flexibility.
• FHA Loans: Backed by the Federal Housing Administration, these are ideal for buyers with lower credit scores and smaller down payments.
  • State Housing Finance Agency Loans in Iowa (IFA), Minnesota (MHFA), and Colorado (CHFA) are also available through MidWestOne Bank.
• VA Loans: Available to veterans and active-duty military, offering benefits like no down payment and no private mortgage insurance.

6. Find the Right Real Estate Agent

A knowledgeable agent can guide you through the homebuying process, from finding properties to negotiating offers. Look for someone with experience in your desired area and positive client reviews.

7. House Hunting Tips

When viewing homes, consider:

• Location: Proximity to work, schools, and amenities.
• Condition: Look beyond aesthetics to assess the home’s structural integrity.
  • Thinking about building a home instead, or updating one? We can help! Learn more about our lot and land loans and construction and renovation loans.
• Future Needs: Think about your long-term plans and how the home fits into them.

8. Make an Offer

Once you find the right home, work with your agent to make a competitive offer. Be prepared to negotiate on price, closing costs, and other terms.

9. Home Inspection

A thorough inspection can uncover potential issues. Focus on:

• Foundation and Structure: Look for cracks or signs of settling.
• Roof and Insulation: Ensure they are in good condition to avoid future repairs.
• Plumbing and Electrical Systems: Check for leaks, outdated wiring, and other issues.

10. Closing the Deal

During closing, you'll sign final documents and pay closing costs. Review all paperwork carefully and ask questions if anything is unclear.

11. Move In and Settle

Plan your move to minimize stress.

• Plan Your Move: Create a timeline and checklist to ensure a smooth moving process.
• Update Your Address: Don’t forget to update your address with your bank, insurance companies and any other important businesses.

12. MidwestOne Bank’s Support

MidWestOne Bank offers various resources to assist first-time homebuyers:

• Down Payment Assistance: Our experienced mortgage team can help you find and qualify for down payment assistance programs. Speak to an expert today to start your journey to a new home.
• Closing Cost Credit: Receive a $500 credit toward closing costs when you save $1,000 in a new personal savings account.

13. Learn More About First Home Now

First Home Now is for first-time homebuyers and is available only at MidWestOne!

• $0 down payment
• No private mortgage insurance
• 640 minimum credit score
• Don't have credit? We may be able to help!
• Up to 43% debt to income ratio
• No limits on gift, grant, or seller contributions

Learn more and start the application process today.

Start Your Homebuying Journey Today

Buying your first home is a journey filled with excitement and challenges. With the right preparation and support, you can confidently take the first step toward homeownership. Contact a MidWestOne mortgage expert today to learn more about how they can help you achieve your dream of owning a home.