Home / First Time Home Buyers
Buying Your First Home in the Fox Valley
Nobody explains the middle part. You know you want a house and you know roughly what you earn. Between those two there are about nine steps nobody put in order for you.
This page puts them in order.
The Number That Matters
What You Can Afford and What You Are Approved For
A lender approves you for a maximum. That maximum is what you could pay if nothing else in your life changed and nothing broke.
Most lenders size a loan with the 28/36 rule. It puts housing at about 28 percent of your gross income and all your debt at about 36 percent.
That is a fine starting point. It also knows nothing about your car, your student loan or the fact that you want to eat out sometimes. Our how to buy a house guide goes deeper on the search itself.
Do This First
Work Out Your Own Number
Take what you pay in rent today. Add what you save each month. That total, minus a cushion, is closer to your working budget than a preapproval letter.
The Surprise
Taxes Move the Payment Most
Two houses in the same price band, five minutes apart, can differ by hundreds a month because they are in different school districts.
Step by Step
Your First Purchase, Step by Step
Five moves, in order. Most of the stress comes from doing them out of order.
Step 01
Talk to a Lender
Do this before you look at anything. You want a preapproval, not a prequalification, and you want to know what the monthly payment looks like at the top of your range.
Step 02
Work Out the Cash You Need
The down payment is one part. Closing costs, the inspection and the first year of insurance are the rest. Ask your lender for the full figure in writing.
Step 03
Look With an Agent, Not Alone
The listing agent works for the seller. Dale works for you, and on a purchase the seller usually pays the buyer side.
Step 04
Make the Offer and Get It Inspected
An inspection is yours to schedule and yours to read. Anything it finds becomes something you ask for or walk away from.
Step 05
Close
You sign, the money moves, you get keys. Between the offer and that day is about thirty to forty five days on a normal loan.
What Is Available
Starter Homes Around the Fox Valley
First purchases here tend to land in Elgin, South Elgin, Batavia and the older parts of Aurora, where entry prices are below Geneva and St. Charles.
The Cash
What Comes Out of Your Pocket
Three buckets, and the third one is the one people forget until it arrives.
One
The Down Payment
Ask your lender what programs you qualify for before you assume a number. The size of it changes your monthly payment and whether you pay mortgage insurance.
Two
The Closing Costs
Title work, transfer stamps, lender fees, the appraisal and prepaid taxes. Your lender gives you an estimate in writing early, and you should ask for it early.
Three
The First Year
A house you own needs money you did not spend as a tenant. Budget one percent of the price a year for repairs and maintenance.
In Your Favor
The Credit That Lands at Closing
Illinois property taxes are paid a year behind, so at closing the seller credits you for the months they owned the house. On a Fox Valley purchase that credit is often four figures. It is money you do not have to bring. Ask your lender to show you where it appears on the closing statement, because it changes the cash you need on the day.
Who This Page Is For
This Page Is for You If
No question is too basic on a first purchase. That is the whole point of the page.
- You are renting and cannot work out whether buying is cheaper
- You have a preapproval letter and no idea what to do next
- You are looking at two towns and the taxes are different
- Somebody told you to bring your own agent and you are not sure why
- You want the whole thing explained once, in order, without a sales pitch
First Step
Work Out the Monthly Payment First
A price is not a payment. Put the price, the down payment and the term in, add the taxes and the insurance, and see the number you would send every month.
Common Questions
First Time Buyer Questions
How much do I need for a down payment?
It depends on the loan. Ask a lender which programs you qualify for before you assume you need twenty percent, because many buyers here put down far less.
Do I pay my agent?
On most purchases the seller pays the buyer side. Dale will tell you up front if a listing is an exception, before you see it.
Should I buy or should I wait?
That depends on what you pay in rent, how long you plan to be here, and what your payment would be. Bring all three numbers and we will work it through with you.
What is the inspection for?
It tells you what you are buying. You choose the inspector, you get the report, and what it finds becomes something you negotiate or walk away from.
How long does the whole thing take?
From preapproval to keys, most first purchases take about two to three months. The looking is the part that varies.
Still Wondering?
Ask Dale Directly
No question is too basic on a first purchase. Send it over and get a straight answer, with nothing attached.
One Conversation
Start With a Conversation, Not a Listing
Twenty minutes on the phone before you look at anything saves months of looking at the wrong houses.