First Time Home Buyer in Bloomington MN

Buying your first home in Bloomington MN is one of the biggest financial decisions you’ll ever make. Most people go into it not knowing what they don’t know — and that gap between what they think the process looks like and what it actually looks like is where things go sideways. My job is to close that gap before you ever make an offer.

I’m Ken Graczak. I’ve been a mortgage broker for over 24 years, I’m based right here in Bloomington, and I wrote a book on this. I also built an 18-module online course that walks you through the entire home buying process in under 30 minutes. Education first, always. That’s not a tagline — it’s how I’ve run my business since day one.

If you’re a first time home buyer in Bloomington MN, you’re in the right place.

Start Here: The Blueprint to Homeownership

Before we talk loan programs, rates, or pre-approval, I want you to have a foundation. That’s why I created two resources specifically for first-time buyers:

The Book. Blueprint to Homeownership is a plain-language guide to the entire home buying process. No jargon, no fluff. Just a clear picture of what to expect from start to close. You can grab a copy on Amazon or find it at kengraczak.com.

The Online Course. 18 modules. Under 30 minutes. Covers everything a first-time buyer needs to understand before they start shopping for a home — credit, pre-approval, loan programs, the offer process, closing costs, and more. It’s free and it’s built specifically for buyers who want to walk into this process feeling confident instead of confused. Start the course here.

You don’t have to read the book or finish the course before we talk. But buyers who do show up to that first conversation ready to make decisions instead of just asking basic questions. That’s a better experience for everyone.

What Does It Actually Mean to Be a First Time Home Buyer?

Most people assume “first time home buyer” means you’ve never owned a home before. That’s the most common definition, but it’s not always the only one. Some loan programs define a first time buyer as someone who hasn’t owned a primary residence in the past three years. If you owned a home before but it’s been a few years, you might qualify for programs you didn’t expect.

Worth mentioning early so you don’t count yourself out before we’ve had the conversation.

Understanding Your Credit Score Before You Start

Your credit score is one of the most important factors in determining what loan programs you qualify for and what rate you’ll get. Here’s a quick baseline:

• 740 and above: excellent — best rates available across all programs
• 700 to 739: good — strong options across conventional and government programs
• 660 to 699: fair — FHA and some conventional programs available
• 580 to 659: limited but not stuck — FHA with 3.5% down is typically available
• Below 580: harder but not impossible — let’s talk before you assume the answer is no

If your credit isn’t where you want it, that’s not a reason to wait. It’s a reason to have the conversation now so we can build a plan. I’ve helped buyers improve their credit and get into a home faster than they thought possible. I’ve also helped buyers who assumed they needed to wait realize they were already ready.

Pre-Qualification vs Pre-Approval: Know the Difference

These two terms get used interchangeably but they’re not the same thing and the difference matters when you’re making offers in a competitive market.

Pre-qualification is a quick estimate based on information you provide — income, debts, assets. Nothing is verified. It gives you a ballpark but it doesn’t carry much weight with sellers.

Pre-approval means your income, credit, and assets have been reviewed and verified. A pre-approval letter tells sellers you’re a serious buyer who has already been through underwriting review. In a competitive market, showing up without one puts you at a real disadvantage.

We do pre-approvals, not just pre-qualifications. When you make an offer, you want to be backed by something real.

Loan Programs for the First Time Home Buyer in Bloomington MN

There’s no single “first time buyer loan.” There are several programs that tend to work well for first-time buyers depending on your situation. Here’s a quick overview with links to the dedicated pages for each:

Conventional 3% Down. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs both allow 3% down for qualifying buyers. Strong credit, flexible income guidelines, and mortgage insurance that drops off automatically once you reach 20% equity. A good fit if your credit is solid and you want to minimize upfront costs without going the FHA route. Learn more on our low down payment page.

FHA Loan. 3.5% down with a credit score of 580 or higher. More flexible qualification standards than conventional. The trade-off is mortgage insurance that stays for the life of the loan if you put less than 10% down. A strong option for buyers with lower credit scores or limited savings. Learn more on our FHA loan page.

VA Loan. If you’ve served in the U.S. military, the VA loan is one of the best home buying benefits available. Zero down payment, no private mortgage insurance, competitive rates. If this applies to you, it should be the first program we look at. Learn more on our VA home loan page.

Fixed Rate Mortgage. Most first-time buyers end up in a 30-year fixed rate loan. Predictable payment, long-term stability, and the flexibility to refinance later if rates drop. Learn more on our fixed rate mortgage page.

Not sure which one fits? That’s exactly what the conversation with me is for. I run your numbers through multiple programs and show you the real difference in monthly payment, total cost, and long-term impact before you decide.

The Home Buying Process: What to Expect

Here’s the basic sequence so you know what’s coming:

Step 1: Get pre-approved. Before you start looking at homes, know what you qualify for. This shapes your search, your offer strategy, and how seriously sellers take you.

Step 2: Find a home and make an offer. Once you’re pre-approved, you work with a real estate agent to find the right home. When you find it, your pre-approval letter goes with the offer.

Step 3: Loan processing and underwriting. After the offer is accepted, we move into full loan processing. Appraisal, title work, final income and asset verification, underwriting review. This is where staying in close contact and responding quickly to document requests keeps things moving.

Step 4: Clear to close. Underwriting approves the loan, you receive your closing disclosure with the final numbers, and we schedule closing.

Step 5: Close and get the keys. You sign, the funds transfer, and you own a home.

The full course at kengraczak.com/blueprint-to-homeownership goes through each of these steps in detail so you know exactly what to expect before it happens.

Why Work With a Broker as a First Time Buyer

This matters more than most first-time buyers realize.

When you go to a bank, they show you their programs at their rates. One lender, one set of options. If their guidelines don’t fit your situation, they say no and you’re back to square one.

I’m a broker. I work with multiple lenders and I shop your file to find the best fit for your credit profile, your down payment, and your goals. For a first-time buyer, that flexibility is especially valuable because your situation might be a perfect fit for one lender’s program and a bad fit for another’s.

I’ve been doing this for over 24 years. Stephanie and I are right here in Bloomington. We work with first-time buyers across the Twin Cities every day. A lot of our clients come in thinking the process is going to be overwhelming and leave the first conversation surprised by how manageable it actually is once someone walks them through it clearly.

Use our mortgage calculator to run some scenarios before we talk, and check out current rates to get a feel for where payments land right now.

If you’ve talked to another lender and aren’t sure about what you were told, a second opinion costs you nothing.

What to Expect When You Work With Us

No pressure. No rushing you toward a decision before you’re ready. Education first, always.

Most first-time buyers come in with a list of questions. Good. Bring them all. My job is to make sure you leave every conversation knowing more than when you walked in. By the time you close, you should understand exactly what loan you got, why it was the right fit, and what your payment covers every month.

That’s the standard I hold myself to. It’s also why I wrote the book and built the course. The more you understand going in, the better the outcome for everyone.

First Time Home Buyer FAQs — Bloomington MN

How much do I need to save before buying my first home in Bloomington MN? Less than most people think. With FHA you can buy with 3.5% down. With conventional HomeReady or Home Possible programs, 3% down is possible. On a $350,000 home that’s $10,500 to $12,250 for the down payment plus closing costs, which typically run 2% to 3% of the loan amount. We run the exact numbers for your situation so you know what to plan for.

What credit score do I need to buy my first home? FHA loans allow down to 580 with 3.5% down. Conventional 3% down programs typically require 620 or higher. VA loans have their own requirements. If your score is below 580, don’t assume the answer is no — let’s talk first and build a plan.

How long does the home buying process take? From pre-approval to closing, most purchases take 30 to 45 days once you have an accepted offer. Getting pre-approved before you start shopping is the single most important step to keeping that timeline on track.

Do I need a real estate agent? Yes. A buyer’s agent represents your interests in the transaction and typically costs you nothing since the seller pays the commission. I can refer you to agents I trust in the Bloomington and Twin Cities market if you don’t already have someone.

What are closing costs and how much should I expect to pay? Closing costs typically run 2% to 3% of the loan amount and cover things like appraisal, title insurance, lender fees, prepaid taxes and insurance, and more. We go through the full loan estimate together so there are no surprises at closing.

Can I buy a home if I’m self-employed? Yes. Self-employed buyers typically need two years of tax returns and may face more documentation requirements than W-2 employees, but it’s absolutely doable. If your tax returns don’t reflect your actual income, a bank statement loan may also be worth exploring. Learn more on our bank statement home loan page.

What’s the difference between a mortgage broker and a bank? A bank offers their products at their rates. A broker shops your file across multiple lenders to find the best fit for your situation. For a first-time buyer, having someone in your corner who isn’t limited to one institution’s guidelines can make a real difference in what programs are available and what rate you get.

Ready to Take the First Step?

Whether you want to start with the course, grab the book, or just have a conversation about where you stand, I’m here. No pressure, no obligation. Just a straight answer on what you qualify for and what the process looks like for your specific situation.

Schedule a call with Ken · Apply online · Start the free course · Grab the book on Amazon