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Buying your first home is an exciting milestone, but it can feel overwhelming without the right guidance. We’re here to help make the process easier by offering practical advice, financial tools, and expert support.

Getting Started

The path to owning a home starts with preparation. By following these key steps, you’ll be in a stronger position when it comes time to apply for a mortgage.

  • Save for a down payment. Begin by setting aside savings for a down payment, which typically ranges from 3%-20% of the home’s purchase price. The more you can put down up front, the lower your monthly payment will be.
  • Build and maintain a good credit score. Your credit score is a crucial factor in determining your loan eligibility and interest rate. Regularly check your credit report, pay your bills on time, and aim for a score of 620 or higher to qualify for most mortgage options.
  • Pay your bills on time. Consistently paying your bills by the due date helps improve your credit score and shows lenders you’re financially responsible.
  • Avoid major purchases. While saving for your home, try to avoid making major purchases like new cars or large credit card expenses. Major purchases can increase your debt-to-income ratio, which may affect your mortgage application.
  • Clear up old debt. Addressing old or outstanding debts before applying for a mortgage can help improve your financial standing. If possible, work on paying off credit cards or other high-interest loans to reduce your debt load.

Down Payment Assistance Programs

For many first-time homebuyers, saving for a down payment can be a challenge. That’s why we offer a variety of down payment assistance programs to help make home ownership more accessible.

  • State and local programs. Many states and local governments offer assistance programs for first-time homebuyers. These programs can provide grants or low-interest loans to cover part or all of your down payment and closing costs.
  • Federal assistance. The Federal Housing Administration (FHA) also offers loan options for first-time home buyers with lower down payments, such as FHA loans, which require as little as 3.5% down.
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Alerus Aspire Program

The Alerus Aspire Program is designed to help make homeownership more affordable for qualified first-time buyers. Here’s how the program can assist you:

  • Up to $2,000 in assistance: Use this financial assistance to help cover your down payment or closing costs.
  • For eligible borrowers: Available to buyers whose income is below 50% (AMI), helping those who need it most.
  • Primary residence requirement: The program is available only for the purchase of your primary home.
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Frequently Asked Questions

How long does the home buying process take?

The timeline can vary, but the homebuying process typically takes 45-60 days from the time you make an offer to the closing date, depending on factors such as the mortgage pre-approval process and inspections.

How do I improve my chances of getting a mortgage?

To improve your chances, maintain a good credit score, save for a down-payment, pay down existing debts, and avoid taking on new debt before applying for a mortgage.

What’s the difference between being pre-qualified and pre-approved?

Pre-qualification is an estimate of what you can borrow based on self-reported information. Pre-approval is a more in-depth evaluation by a lender, which includes verification of your income, credit, and assets, and provides a clearer picture of how much you can borrow.

Can I buy a home with student loan debt?

Yes, having student loan debt doesn’t prevent you from buying a home. Lenders will look at your debt-to-income (DTI) ratio, including your student loan payments, to determine your ability to repay the mortgage. Keeping a low DTI improves your chances of qualifying.

What is escrow and how does it work?

Escrow is a third-party account where funds are held during the home buying process to cover expenses like property taxes and homeowner’s insurance. After closing, a portion of your monthly mortgage payment may go into escrow to pay these expenses on your behalf.