How to buy your first home in Minnesota
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1. Before you start
- Check your credit. You can get your reports free at annualcreditreport.com.
- Save for two things: the down payment and closing costs.
- Start gathering your paperwork now. The list is below.
- Talk to a lender before you look at homes, not after.
2. Paperwork the lender will ask for
- Photo ID.
- Social Security number or ITIN.
- Recent pay stubs.
- Tax returns and W-2s from recent years.
- Bank statements from recent months.
- If you're self-employed: business tax returns and proof of income.
Every lender asks for slightly different things. This list gets you started.
3. What it really costs
- Down payment: depends on the loan. Some start at 3% or 3.5% of the price. ITIN loans usually ask for more.
- Closing costs: charged by the lender, the title company, and others. Usually 2% to 5% of the price.
- Earnest money: you put it down when your offer is accepted and it goes toward your purchase.
- Inspection: an inspector checks the home before closing. It's worth it.
- Your monthly payment includes the loan, property taxes, and home insurance.
4. Help for buyers in Minnesota
- Minnesota Housing offers first-time buyer loans and help with the down payment and closing costs.
- Some cities and counties have their own programs.
- Almost all have income and home price limits.
- Many require a homebuyer class.
Programs change. We check together which ones fit you.
5. What not to do while buying
- Don't open new credit cards.
- Don't buy a car or furniture on credit.
- Don't change jobs without talking to your lender first.
- Don't deposit large amounts of cash you can't document.
- Don't miss any bill payments.