Thinking about buying your first home in Illinois? Our guide to the home-buying process in the Prairie State will make every step a little easier.
Step 1: Consider Current Illinois Mortgage Rates
One of the first things you’ll need to think about when you decide to buy a home is the best time to lock into your interest rate. Every mortgage lender charges interest on the amount of principal you borrow to buy your home. Just half a percentage difference in interest can mean saving thousands of dollars by the time you pay off your mortgage. It’s worth the time and effort to monitor how rates are changing before you buy.
Mortgage rates change frequently — you might even notice them changing on a daily basis on occasion. The current state of the economy, bond interest rates and even your local housing demand can all play a role in what you’ll pay for your loan.
Below, you can learn more about what you might expect to pay for your loan in Illinois if you took it out today. We update this information on a regular basis to keep the data you see current.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.792% | 7.019% |
| 15-year fixed | 6.062% | 6.596% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
Step 2: Pick a Mortgage Lender in Illinois
The best mortgage lender will vary depending on the type of loan you need, the preapproval process you prefer and where you live. If you don’t already have a lender in mind, consider a few of our favorites below.
- Online Service
1. Best Overall: Quicken Loans®
Quicken Loans® is one of the largest online lenders in the United States and it’s one of the best lenders for first-time buyers. Buyers who purchase their first home love Quicken Loans’ fast, straightforward preapproval application process. Simply answer a few questions about your income, where you want to buy a home and the type of loan you need on your desktop, smartphone or tablet. Most people will receive a decision instantly.
Quicken Loans is also a popular lender for first-time homeowners because it offers a very wide selection of government-backed and conventional loans. Whether you want to buy a home with no money down through a USDA loan or you want a short-term conventional loan, Quicken Loans has a solution for you.
2. Best for Veterans: Veterans United
If you’re thinking about buying a home with a VA loan, be sure to consider Veterans United. Veterans United is a servicemember-focused lender that specializes in providing VA loans with no down payment requirement.
Veterans United employs a full team of veterans from every branch of the military to ensure that you don’t run into any trouble getting your Certificate of Eligibility required to apply.
Veterans United is also one of the most consistently highly rated lenders as well. Almost 200,000 veterans have rated Veterans United, on average, 4.7 out of 5.0 stars.
Don’t know if you qualify for a VA loan? No worries — Veterans United can also help you get a conventional loan.
- Self-employed Borrowers
3. Best for Self-Employed Buyers: CrossCountry Mortgage
Self-employed individuals often underestimate how difficult it can be to find a mortgage loan. Lenders need to know that you’ll be able to afford your mortgage payments for up to 15 years. This can be difficult to prove if you don’t have a set salary or W-2s to prove your income.
CrossCountry Mortgage is Illinois residents’ premier lender for flexible qualification mortgages. CrossCountry Mortgage’s Asset Qualifier loan can allow you to borrow up to $6 million with no income verification required. You can even use business assets for your loan preapproval — something that isn’t typically allowed with standard lenders.
Step 3: Find a House
After you apply for your loan, your lender will send you a preapproval if its team believes that you’re a good candidate for a loan. Your preapproval letter will tell you about how much money you can afford to take out in a loan, which is a great place to begin shopping for a home.
When you consider which properties to visit, consider the following:
- Neighborhoods: The neighborhood where you buy your home will determine your property taxes, which schools your children attend, how much home you can afford, your commute and more.
- Ideal size: You probably already have an idea of the number of bedrooms and bathrooms you’d like in your ideal home. But do you know how many square feet you’d like to own? Be sure to consider both the size of the home and the lot size before you buy.
- Condition: Unless you’re buying a newly constructed home, the house you purchase likely won’t be in perfect condition when you move in. Think about what types of repairs you’re comfortable making after closing — and which ones are dealbreakers.
You might also want to hire a real estate agent or realtor to assist you in finding and buying the right property at this time. A real estate agent can help you access listings that may not be available on online databases and they can assist you in submitting your offer letter when you do find the right home for your family.
Step 4: Make an Offer
When you find a property that you think is “the one,” you’ll announce your intention to purchase it with an offer letter. Your offer letter is a letter submitted to the seller of the property or the seller’s agent that tells them that you’re serious about buying their home. Your offer letter includes your personal information, the price you want to buy the home for and any contingencies and conditions you want on the home sale (for example, that the home must pass an inspection before you buy). You should also include a deadline for your seller to respond to the sale in your offer letter.
Most buyers allow their agents to write their offer letter for them. Agents understand how to use legally binding language and how to write an offer letter that keeps your interests at the forefront. Your agent can also help you determine what you should offer for the home and what type of contingencies are reasonable to request.
After you submit your letter, wait for the seller to respond. The seller might reply in one of 3 ways:
- Accept the offer. If your seller accepts the offer, your job is finished. You can proceed to closing.
- Reject the offer. If the seller rejects the offer, it means that he or she has denied every part of your offer. You might choose to submit another offer or move onto a different property.
- Make a counteroffer. A counteroffer is a new offer with an adjusted set of terms. If your seller offers you a counteroffer, it’s up to you to accept it, reject it or create a new counteroffer.
It’s normal for home sales to go through multiple rounds of counteroffers before an agreement is reached. Your agent can assist you in determining how to respond to each offer.
Step 5: Closing Time
When you prepare to close on your loan, you’ll go through each of your lender’s closing steps. Though this process can vary depending on the lender you choose, most closings include 3 steps:
- Appraisal: During an appraisal, an appraiser will visit your property to get a feel of the overall condition of your home. After the appraisal, you’ll receive a report with an official estimate of how much your home is worth. Lenders require appraisals because they cannot loan out more money than your home is worth.
- Inspection: When you schedule an inspection, a home condition expert called an inspector will visit your home. This person will test all of your systems and appliances, making notes on any place where a repair or replacement is needed. At the end of the inspection, you’ll receive a report that gives you a more in-depth look at your home. Though most lenders don’t require you to get an inspection before you buy a home, you should still schedule one so you don’t purchase a “fixer-upper” by mistake.
- Underwriting: The underwriting stage is when your lender prepares your loan paperwork and verifies the financial and credit information you put down on your preapproval application.
When all steps of closing conclude, your lender will send you a document called a Closing Disclosure with the final terms of your loan. After you acknowledge that you’ve received your disclosure, your lender will schedule your closing meeting.
At the closing meeting, you’ll sign on your new loan, pay your down payment and closing costs and walk away as the newest homeowner in Illinois!
Move-in Day in Illinois
After you close on your mortgage loan, the only thing you need to do is manage your mortgage payments. But owning a home is about much more than simply paying off your principal and interest each month and choosing furniture. You’ll also need to put aside money for any repairs or maintenance issues that come up, property taxes and your homeowners insurance premiums. Staying organized and thoroughly understanding your loan will help you be prepared for homeownership.
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.
You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.
About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.