First-time home buyer guide for Minnesota

Start with a financing review before you tour homes. Understanding an estimated payment range, your likely program options and the funds you will need at closing changes how you shop, what you offer and how confidently you negotiate.

A financing review is also the point where fixable issues surface: a credit item worth addressing, documentation that needs organizing, or a down payment source that requires a paper trail. Finding those before you are under contract is far less stressful than finding them afterward.

There is no single required down payment. The amount depends on the loan program, occupancy, property type and borrower qualification. Down payment options may start as low as 3% for qualifying conventional borrowers, and eligible borrowers may qualify for FHA financing with down payments starting as low as 3.5%, subject to FHA requirements and borrower qualification.

Eligible VA borrowers may qualify with no down payment, subject to VA eligibility, lender requirements, property eligibility and borrower qualification. Minnesota Housing and other down payment assistance programs may help qualified buyers with down payment or closing costs, subject to income limits, purchase price limits and program guidelines.

Gift funds from an acceptable donor are allowed on many programs, with documentation requirements. Larger down payments can reduce the loan amount and may affect mortgage insurance and pricing, but a larger down payment is not automatically the better decision if it drains your reserves.

Closing costs are the fees and prepaid items required to complete the loan and the transfer of the property. They are separate from your down payment and typically include items such as lender fees, title and settlement charges, recording fees, appraisal cost, prepaid interest, homeowners insurance and property tax escrow deposits.

You receive a written Loan Estimate within three business days of a completed application, which itemizes these costs so you can review them line by line. In some transactions, sellers agree to contribute toward buyer closing costs; program and lender limits apply to how much of a contribution can be used.

Timelines vary by transaction, but most purchase contracts allow several weeks between an accepted offer and closing so inspections, the appraisal, title work and final loan review can be completed. Your contract dates, not the lender alone, drive the schedule.

Responsiveness matters more than most first-time buyers expect. When requested documentation is returned quickly, the file keeps moving. Delays in providing updated statements or explanations are one of the most common reasons a closing date gets pushed.

Most avoidable issues trace back to changes made after a pre-approval is issued. Financing decisions are based on a snapshot of your income, assets, credit and debts, and altering that snapshot mid-transaction can change qualification.

The other common category is skipping the planning step. Shopping without a clear payment target, ignoring insurance and property tax costs, or leaving no cushion for post-closing expenses can turn a workable purchase into a strained one.

As an independent mortgage loan officer, Andrea can compare options across a broad network of wholesale lenders and loan programs rather than relying on a single institution's lending menu. For first-time buyers, that usually matters most when a file has a nuance: self-employment income, limited credit history, a condo, a multi-unit property or down payment assistance layered with a first mortgage.

Andrea also brings experience spanning mortgage lending, residential real estate and real estate closings, which helps in evaluating how financing interacts with inspections, appraisals, seller concessions and closing timelines.