Buying Your First Home in Springfield — We Make It Simple

All right. Hey everybody, I'm Zac Albers with Albers Real Estate Group and today I brought one of my favorite local lenders to answer some questions about first-time home buying. questions I get all the time from people when they call me. How much do you need for a down payment? What the firsttime home buyer loan actually is? Whether you can get help with closing costs, how family gift money works, how debt factors in kind of the whole process a toz. So, let's get into it. Before we dive in, Adam, uh, do you want to introduce yourself and tell people what you do and and who you work for and what you do in the Springfield area? Yeah, I would love to. So, my name is Adam Schwanka.

I work for Flat Branch Home Loans. We've been very fortunate to be ranked as one of the top mortgage lenders in the state of Missouri by the Department of Finance. I've been doing this for almost 20 years, believe it or not. I always I mean at a young age had a passion for finance. Grew up on a farm in Iowa at the age of six. I made my dad, who was a farmer, take me into local financial institutions so I could ask them questions because I was just fascinated with how banks could help the local community or financial institutions could help the local community.

Um, so I've also over the years, especially the last probably decade, I've been consistently ranked in the top 1% of loan officers in the country based on how many families that we help. And that's a it's a magazine that does those rankings each year. Um, yeah. So, that's that's a little bit about me. It's not just me. I have an amazing team. I've got Ivy and Kathy and Britney. Um, Ivy and Kathy and I have been together for getting close to 10 years. Long time. Long time. And I had to bring them on because, you know, just like anyone that's good at their craft, you get busier.

I I help a lot of uh previous clients, a lot of referrals from previous clients, of course, uh business partners like yourself. And in order to serve them at a high level, get back to them quickly. And I know we're going to jump into pre-qualification, doing that accurately so that there's not fires later on in the process. And we I know we'll get into that more, but there's a lot that goes into all of that. And in order to do that and pull that off and close on time and communicate well, I believe that a loan officer has to have a team. And so that's Ivy, Kathy, Britney. They're they're really what helps me make everything run as smooth as it does. Yeah. So, you you kind of mentioned it.

This is the introduction and closing of the full conversation. Topic-by-topic transcripts are available with each segment video on our guide pages covering preapproval, down payments, assistance programs, closing costs, seller concessions, gift funds, debt-to-income, and the buying timeline.

Yeah. And something we didn't hit on that was intentional on my part because I'm I'm gonna probably dedicate a whole video to it is credit scores. Y because there's there is a massive amount to that. And and what I will say just as a kind of ending part of this video is most people that contact me that say their credit's not good enough aren't correct. Yes. So, you know, Sure. And even if they are correct, but your goal is to buy a house, one of the easiest ways to start is to go get pre-qualified, have them pull your credit, and they can tell you exactly what to do to raise that score to the point where you are eligible to purchase using one of these loan programs.

But I don't want to get again too far into that because there's a there's a lot to that. It's one of the most common questions I get. It's one of the most common confusion points of contention or points of confusion that people have. So, we'll we'll do a whole video on credit scores and and how that works with real estate. But, uh, that being said, Adam, I appreciate you coming on. Thank you for all that information. Kind of the the overall takeaway is don't disqualify yourself. If you are interested in buying a home, the first step is just a free conversation. You can reach out to me. You can reach out to Adam.

Honestly, probably reach out to Adam because that's where I'm going to send you after I talk to you at first because I'm not I'm not pulling your financials and I don't need to know that. I don't I don't really want to know all your financials. And so Adam can do that and kind of get you down the right path. And you know, here at my brokerage, we work with first-time home buyers in Springfield, Ozark, Nixa, Republic, all over Southwest Missouri, Branson, Marshfield, everywhere you can think of. Uh when you call us, you know, a live real person, a real licensed agent answers the phone.

And if we don't answer and you leave a message, we will call you back immediately as soon as we are able to. Um and I know Adam's team is the same way. Actually, I think I don't know that I've ever called your guys' business line and not had the phone answered. But it's there's not automated. You don't get AI. You don't you don't get any of that. You get a real human being that that knows what they're doing and and can walk you through it. So, if that helped, uh, subscribe to the channel and we'll be breaking down we'll be doing a ton of these videos breaking down buying and selling just one piece at a time. Thanks for watching. Absolutely. Thank you.

One of the things I get asked a lot is how much money do I need to purchase a house, right? And very loaded question cuz there's again a lot of factors into that that you need a really good lender to help you determine, a good agent that can walk you through different options. But you know, I don't hear it as much anymore. I think in today's day and age most people realize you don't need 20% down to purchase a house. But that was something especially early

on in my career I I did hear some. But realistically with let's just kind of break this up by down payment, what are [clears throat] What are the different loan programs and and how much money do you need really need to be able to put down on a house? There are several zero down or low down programs. Usually people are surprised that there's actually often times, depending on their situation, more than one of them. So, you have VA financing, which you're familiar with

being a veteran. Yep. And do it as little as 0% down. And we can get into closing costs and prepaid. You can often times ask the seller for that, but I always refer that back to my realtor partner because you know, based on the price point, if there's room there, you know, to ask for closing costs and prepaid to be covered. Um yeah. You have MHDC, which is through the state of Missouri. That's uh for a first-time home buyer where they can get down

payment assistance for the 3 and 1/2% and do an FHA loan. Um you have uh we have another program called Essex. So, if you're not a first-time home buyer or you make too much for MHDC, which that is a thing, believe it or not. There are programs. MHDC, I haven't talked about USDA, which is zero down. But those have income thresholds where you actually are can be over qualified depending on what your family household income is. And in which case, you just it doesn't mean you

you can't get financing, you just can't use those particular programs. and I'm specifically referring to MHDC and USDA, where if you make over a certain amount as a household, you don't qualify for those programs anymore. You have to look at other programs. And then there's a lot of low down, you know, FHA is a very common not just first-time home buyer, you don't That That's a misconception. A lot of people think the only time you can do an FHA loan is if you're first-time home buyer,

and that's not true at all. And And with that program, that's 3 and 1/2% down. That's typically when people say, "Well, uh I want to do a first-time home buyer loan." Typically, they're they're meaning an FHA loan. Is Is what they've heard, right? Because there's no singular first-time home buyer loan anymore. Yes. I mean, there's not a government loan that says, "This is just for first-time home buyers only." And that You know, I think in the past there was, but that that That has

not existed in quite some time. It's more of the FHA is Is what most people are Yeah. And even, you know, USDA, you don't have to be a first-time home buyer. That's another misconception. I've heard that before. Yeah. One really quick thing on the down payment assistance programs. So, if there's a reason you need to do MHDC or Essex, one thing that my team really carefully goes through is we ask you, "Is there a family member that could maybe give you a gift?

Is there an old 401k that's just sitting there that you haven't touched in a while? You know, are you sure that you don't have a down payment somewhere?" And I bring that up because those are really good programs. But, a lot of times, if you do have the ability to either get a gift from family or maybe to tap into an old retirement account, or maybe there's an another source that you have, I would just encourage you to run a buy me before you liquidate or

transfer anything. Yeah, yeah. Doing the normal FHA program compared to some of the down payment assistance program, depending on the person's situation, can actually be a better deal. Yeah. If they just don't have the down payment, then those programs are a blessing. Yeah, one other thing I want to mention um that I see a lot conventional loans, kind of your standard boiler plate loan, you can do as little it used to be as little as five, but I see a lot

of 3% now. Yes. Yes. I know there are programs you can kind of stack on top of that to cover Yes. even the 3% and so there's there's a lot of ways to get into a home with very little cash out of Conventional now allows you to do as little as 3% down as long as one of the borrowers, so it's got to be one of at least one of the borrowers on the loan has not owned a house in

the last 36 months. And the general definition for most first time home buyer programs is that if you are a borrower on the loan and have not owned or had interest in real estate in the last 36 months, you're often times defined now as a first time home buyer.