Purchase Tips · January 15, 2025
First-Time Homebuyer Guide: From Pre-Approval to Closing
Buying your first home is one of the biggest financial decisions you will ever make. This step-by-step guide walks you through every stage — from pre-approval to picking up your keys.
Before you tour a single home, get pre-approved. Pre-approval means a lender has verified your income, credit, and assets and issued a formal letter stating your approved amount. Sellers will not take your offer seriously without one.
Step 1: Assess Your Finances
Check your credit score — 720+ gets the best rates, 580+ qualifies for FHA. Calculate your debt-to-income ratio (keep it under 43-50% depending on program). Tally your down payment savings: most programs require 3-20%, but VA and USDA offer $0 down.
Step 2: Get Pre-Approved Through a Broker
Working with HMS means we submit your application across 15+ wholesale lenders simultaneously — one credit pull, multiple rate comparisons. This often results in rates 0.25-0.50% below what a single bank can offer.
Step 3: Find Your Real Estate Agent and Home
Choose a buyer's agent with local expertise (costs you nothing — seller pays commission). Before touring, list your must-haves vs. nice-to-haves.
Step 4: Make an Offer
Your agent guides the offer strategy. Include: purchase price, earnest money (1-3%), contingencies for inspection and financing, and a proposed closing date.
Step 5: Navigate the Contract Period
Schedule a home inspection ($300-$500) immediately. The lender orders an appraisal. Stay responsive — document delays cause closing delays.
Step 6: Close
Review your Closing Disclosure 3 days before closing. Bring your down payment plus closing costs (typically 2-5%). Sign the paperwork, get the keys.
HMS guides first-time buyers through every step. Call 309-222-8286 or apply online.