Are you ready to buy your first home?

Apartment living seems pretty great when you move out of your parents’ house for the first time. That is, until the little things start getting to you:

  • the drippy faucet that you’ve asked your landlord four times to fix but they never do
  • you wish you could paint your rooms but your lease doesn’t allow it
  • the walls are so thin, you can hear your neighbors sneeze

Soon you may find that those little things start turning into bigger deals and you realize that you’re ready to live somewhere you can call your own.

Not to the mention that rent prices have gone up AND financial experts predict that mortgages rates will likely continue to fluctuate. If you’re contemplating on buying your first home, now is a great time to start your journey. Read on to learn how to prepare yourself for the first-time homebuying process.

First Time Home Ownership: Where do you begin?

THE FIRST THING YOU NEED TO FIND OUT IS IF IT MAKES FINANCIAL SENSE FOR YOU TO OWN YOUR OWN HOME.

Use our handy Home Buying Calculators to help determine if buying a home is a good financial decision. How do your calculations stack up? Does it make more financial sense for you to buy a home rather than renting?

ARE YOU EMOTIONALLY READY TO BE A HOMEOWNER?

Along with the financial aspect goes the emotional aspect. Do you have the emotional stamina it takes to deal with emergency home repairs, home maintenance, insurance costs, city assessments, etc.? Murphy’s Law has no bounds when it comes to homeownership, so be prepared!

IS YOUR CREDIT IN GOOD STANDING?
Check your credit report for free at annualcreditreport.com. Be sure there are no delinquencies you’re unaware of. Get those taken care of as soon as possible before you apply for pre-qualification.

Also, find out what your credit score is. Get your true credit score from myfico.com. You’ll pay around $20 but it’s the most accurate way to know your score.

DO YOU HAVE A DOWN PAYMENT?

The amount you need for a down payment will depend on the type of mortgage you end up with. But here’s the deal: the more you put down towards your loan, the better. If you can put 20% down, you’ll avoid paying private mortgage insurance (also known as PMI) which will save you big in the long run. Why is that? Because it’s an additional cost on your loan payments.

If you’re not prepared to put 20% down and are a first-time homebuyer, Fox can help get you into your new home with as little as 3% down.

Another fantastic option is a federal grant program called Down Payment Plus. With the Down Payment Plus® Program, up to $10,000 may be available to eligible first-time home buyers. These funds can be used towards your down payment AND closing costs.

Need help saving for a down payment? Create a sub-savings account and transfer money into it on an automatic, recurring basis. If you’d like to open a sub-savings account, please send us a secure message while logged into your digital banking. Have more questions? Ask us and we’re more than happy to help.

And if this all seems like too much, remember that we’ve got products and services tailored to support first-time homebuyers thanks to reduced closing costs and reduced rates based on your credit standing. Truth be told, our mortgage experts get no greater joy than what comes with helping someone find their first home. So, come on in and see what we can do for you.

MORTGAGE PRE-QUALIFICATION– WILL THE LENDERS LOAN YOU MONEY?

If you don’t have heaps of money at your disposal to purchase a home outright, you want to be sure you can get a loan. This is where pre-qualification comes in.

Getting pre-qualified for a mortgage gives you a huge leg up when it comes to making an offer. It shows the seller that you’re serious about purchasing their home. If you’re bidding against another buyer who isn’t pre-qualified, it could mean the difference in getting your offer accepted.

Items you may need to be pre-qualified from Fox Communities Credit Union:

  • Your current residence address, or addresses, for the past two years.
  • Social security numbers for all borrowers.
  • Your employment history for the past two years. You’ll need your employer(s) name, address and phone number.
  • Income information for all borrowers. You’ll be asked to include salary, overtime, bonuses, commissions, interest/dividend, retirement income and any other regular source of income.
  • If known, the price of the home you are buying, and how much you’d like to borrow toward the purchase.
  • The address of the property you are planning to purchase (if known).
  • Bank and brokerage account information, including the institution name and current balances.
  • Information about your current debts (name of each creditor, the account number, the current balance owing and the amount of your monthly payment).

MORE ABOUT THE PRE-QUALIFICATION PROCESS:
Know that you can get pre-qualified by multiple financial institutions at once. This is highly recommended to ensure that you get the best mortgage rate possible.

Tip: Get all mortgage quotes/pre-qualifications within a 14-day period. Each time your credit is pulled for a quote, it gets dinged slightly. Getting all quotes within a 14-day period minimizes the potential damage to your credit rating.

Article Summary

Consider the following when deciding if you should pursue home ownership for the first time:

  • Does it make financial sense?
  • Are you emotionally ready to be a homeowner?
  • Is your credit in good standing?
  • Do you have a down payment?
  • Get pre-approved for a mortgage and shop around for the best rates.

When you have your pre-qualification, it’s officially time to start the fun stuff – looking at homes.

Are you interested in learning more about the home buying process? Let us know!

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                Loan approval is subject to credit approval and program guidelines. Interest rates and program terms are subject to change without notice. Membership eligibility. Deposit products are Federally Insured by NCUA.