A Letter From a Young Loan Officer to a Young Home Buyer

young home buyerDear Young Home Buyer,

A few weeks back, I posted a quick little video on Facebook promoting a home loan program for First Time Home Buyers. A number of people commented, and many of them went like this:

“My husband and I would love to stop renting, but home ownership seemed so far away. I had no idea we didn’t have to put 20% down. I will definitely have to look into this!”

That was almost a direct quote from a young woman who has wanted to buy a house for the last few years, but thought she had to put 10% – 20% down.


Let’s take a closer look at this…

If you’re reading this, and you’re in your 20’s or early 30’s, the chances of you having $15k – $30k, (which is 10% – 20% down on a $150,000 house) to put down on a house is pretty slim.

You might have that money, but do you really want to empty your bank account to buy a house?

Maybe you do, and maybe you don’t, but that’s not what I want you to learn today.

What I want you to understand is…

You have options as a young home buyer, and you don’t have to drain your entire life’s savings to buy your first house.

Let me tell you a little story about my experience buying my first house, in hopes that it will shed a little light on your options…

As I am writing this letter, I am 28 years old.

I bought my first house a couple years back, on April 15, 2015. I remember how it felt at closing, after my agents slid 2 keys across the table to me. It was a “Holy (Insert Poop Emoji), these are MY house keys!” kind of feeling.

But let’s take a step back for a minute…

Just a few short months before receiving my keys, I had no idea what I was going to do.

I found myself asking myself…

Should I keep renting, or should I pull the trigger and buy my own place?


I remember sitting at my Dad’s house on a freezing February day in St. Louis, trying to figure out my “next move” (literally, I had to move out of my Dad’s house!). The only reason buying a house even entered my mind, was the fact that my Dad is a loan officer, and he told me about this program for first time home buyers.

Since he was my Dad, I knew he would shoot me straight.

A couple days later, I drove up to my Dad’s office, and sat down to run some numbers. Since I had only a few thousand bucks in the bank, my options were slim, BUT, I had options none the less.

He asked me a few simple questions:


  1. What is your credit score? (We ran it to confirm)
    • My Answer: 720
  2. Where are you looking to buy? (For tax purposes)
    • My Answer: South St. Louis City
  3. How much are you comfortable paying each month (To help estimate the purchase price)
    • My Answer: Around $950/mo
  4. How much can you bring to closing? (To help estimate total out of pocket expenses)
    • My Answe: No more that $1,500 (I thought I would get laughed at. Not the case!)


Based off of this information, he created a loan scenario, and began to explain it to me.

He showed me, that if I bought a house for $150,000, my monthly payment (including taxes and insurance) would be roughly $1,060 and I would only have to put 3.5% down.

Not the 10 – 20% most people think.

What’s even better, since I was a first time home buyer, the MHDC (Missouri Housing Development Commission) would pay that 3.5%, on my behalf. That is money that never has to be repaid.

The final step was to get pre-approved, and I would officially know if I could buy a house, and how much house I would qualify to buy.

NOTE: I did not say how much house I could afford. More on that in a moment.

Less than 24 hours later, I got a call from my dad, who was excited to tell me that I was pre-approved to buy a house for $150,000! Needless to say, I was a little shocked, excited, and overwhelmed all at the same time.

$150,000 sounded like a lot of money to me, and someone was willing to just hand it over to me?

I immediately hit the internet, and started looking for houses. I found a great realtor who was also young, and super willing to help.

Even though I was pre-approved for $150k, I felt that it was going to be a stretch, so I ultimately found a property that I loved in South City, and my agent made an offer.

After a little back and forth, we agreed on $132,500, and our final offer was approved!

All that was left was a couple inspections, appraisals, and a final walk through, and the house would be all mine.

Everything checked out, a few minor repairs were made, and on April 15, 2015 I closed on my very first house! It was a pretty incredible feeling to own my very own home.

So…let’s get back to the numbers. While I could have bought a house for $150,000 on paper, I would have been stretching myself super thin.

Like I said, I did not have a ton of money in the bank, and did not want to put myself in an uncomfortable situation.

Just because you have the money to spend, doesn’t mean you have to. That is important to understand.

With that said, the $132,500 purchase price brought my monthly payment down to $970, and I only had to bring $1,000 to the table to cover a small portion of the closing costs, and that was it!

The house was mine for $1,000 out of pocket, and $970 a month!

I thought that was pretty crazy…

Considering, just 2 months prior, I was looking at renting an apartment in the city for about $900 per month. I was also going to have to pay my first and last month’s rent, plus a $500 security deposit ($2,300) just to move in to that apartment. That is money I would most likely never see again!

I felt extremely lucky to have my dad as my loan officer. I knew he wouldn’t steer me in the wrong direction, and I could use him as a guide through the complex process of buying my first home.

I obviously never felt pressured to make a decision, and he laid everything out to me in plain English. So I felt comfortable with MY decision, at the end of the day.

Even though I had a ton of help from him, it was still a nerve racking process. I knew that I qualified on paper, but…

I also knew that “$hit happens”, and boy did it!

Within 6 weeks of moving in, I found bats in my attic ($800 to get them removed) and my basement sewer line backed up ($300 plus the cost to refinish my basement over the next 12 months). I can’t tell you how many people said the exact same thing.

“Welcome to home ownership” or “Oh, the joys of owning your own home”

Ha! And it is so true.

I don’t tell you this to scare you away from buying your first house. After all, I don’t get paid to convince people not to buy houses.

I tell you this because you need to go into home ownership with your eyes wide open.

I am dedicating myself to providing young home buyers (and all home buyers for that matter) with the same level of service my dad provided me.

You deserve, just as I did, to feel comfortable with your decision to buy a home, and the process leading up to it.

Like I said at the beginning of this post, I hear all to often that people felt like they were in the dark with their lender while buying their first house.

A little piece of advice when selecting a loan officer as a first time home buyer. Make sure they have worked with first time buyers in the past. It is crazy to me, but here in the state of Missouri, I have ran into loan officers that did not even know this program existed!

I never would have been able to buy my house without those first time home buyer funds, and if I would have talked to an inexperience loan officer, I would probably still be renting. I can’t guarantee that a program like this exists in the state you live in, but make sure your loan officer walks you through all of your options in great detail.

If they can’t do that, then they are not a good fit for you. I want to wish you the best of luck in your search for your first home, and if you have any questions, don’t hesitate to reach out.

Josh Arras

Josh Arras is a loan officer in St. Louis, MO who focuses on educating home buyers so they can feel confident when buying their next house. There are many moving parts in the home buying process. Josh can make the process simple.

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