8 Things to Consider During the Home Buying Process
Whether you’re a first-time homebuyer or experienced homeowner, purchasing a home can be an exciting and stressful time. Developing a better understanding of the home buying process can help you navigate many of the pitfalls that can put a strain on your time, energy, and bank account. BHFCU’s mortgage experts have some recommendations to help you get started on the right foot.
Know your credit:
Understand your needs:
- Before you even think about house hunting, be sure to request and review your credit report. If needed, take the necessary steps to improve your score. The decision to offer you a mortgage and at what rate often depends on what’s found in your credit report. Learn more in our blog, “Five Reasons to Check your Credit Report Today”.
- Pro Tip: When applying for a mortgage, avoid opening up a new credit card or loan. Both could negatively impact your credit report for about 12 months. The same goes for closing an old account or credit card.
Take Advantage of Pre-Qualification:
- Save time and money by evaluating your wants and needs before you start the home buying process. Remember that location, size, the number of bedrooms/bathrooms, and finishing touches can all add to your bottom line. Be sure to research properties in your area to better understand what you can reasonably afford based on your budget. Use the mortgage payment calculator at bhfcu.com to form a better picture of your financial situation.
- Pro Tip: A real estate agent can help find homes in your area that fit your needs and budget. They can also provide helpful information about the housing market, schedule viewings, help with negotiations, handle contracts, and so much more. BHFCU’s mortgage team is happy to connect you with a real estate agent.
The Down Payment:
- Be sure to talk with one of BHFCU’s friendly and knowledgeable mortgage lenders about getting pre-qualified for a mortgage early in the home buying process. Our lenders will work with you to examine your budget and help determine how much you can realistically afford. Be prepared to provide pay stubs, W-2s, bank statements, tax returns, relevant loan documents, and more. In a competitive market, being pre-qualified can make all the difference when it comes to closing on your dream home.
Find the Right Mortgage:
- Building up your savings and making a large down payment could help increase your chances of getting approved for a loan, earning a better mortgage interest rate, and lowering your monthly payment. While many lenders require a 20% down payment, BHFCU understands your down payment should be reflective of your needs and financial situation. Many of our mortgage options only require a 3% down payment, which gives you more power to buy the home you’ve always wanted.
- Research your mortgage options early in the home buying process to avoid any unnecessary surprises later. BHFCU offers a variety of financing options for a diverse range of needs, including conventional mortgages, adjustable and fixed rates, various terms, and VA/FHA/Rural Development mortgages. We also underwrite, process, originate, and service mortgages in-house, as well as provide secondary market options. Be sure to consider your needs carefully and then work with one of our expert mortgage lenders to plan accordingly. Learn more about our home loan options and rates at bhfcu.com/mortgage.
- Pro Tip: As you shop around for the best mortgage, remember that interest rates and loan terms may be similar, but final costs and fees at each lender could vary.
The Home Inspection
- As you calculate your total monthly costs, make sure to account for potential maintenance costs, HOA fees, and other miscellaneous homeownership expenses. This includes everything from electricity, gas, and water to cable and internet. We recommend that you ask the seller about the average cost of these items before you buy. Also, keep in mind that some homeowners association often charge an average of $200 to $400 per month.
- Additionally, don’t forget about insurance costs and property taxes, which are typically paid out of an escrow account. Property taxes can often reach over $3,500 per year depending on where you live; adding about $300 per month to your mortgage payment.
Understanding your contract:
- A formality with any BHFCU mortgage, a home inspection is an inexpensive way to discover the overall condition of a house before you buy. A certified home inspector will evaluate a home’s electrical wiring, plumbing, roofing, and insulation, as well as its structural features. You should consider addressing any issues found by the home inspector with the seller of the home. As the buyer, you may be able to negotiate with the seller to fix any issues before you finalize the paperwork. Our mortgage experts are happy to connect you with a certified home inspector in your area.
- As one of the largest commitments you’ll likely ever make, it’s important to fully understand the terms of a mortgage before you sign. Because we specialize in in-house mortgages, you get the peace of mind that comes from doing business directly with BHFCU for the life of the loan. Our mortgage experts will work with you to ensure you fully understand the terms of your mortgage and total loan costs, including early repayment penalties, additional fees, and penalties for defaulting.
- Pro Tip: At closing, you’ll be presented with a stack of documents that will need multiple initials and signatures. While you may feel rushed to sign, be sure to verify that the final closing documents line up with your understanding and expectations. Our mortgage experts will be by your side to answer any questions or concern throughout the process.
Like all major life decisions, purchasing a home can feel a little overwhelming at times. From scoping out prospective homes to weighing your financial options, you’ll have a lot of factors to consider before you can think about moving into your new house. BHFCU’s mortgage team is ready to help you every step of the way. We’re dedicated to providing you with the products and services you need to achieve your home ownership goals. Click the button below to contact our mortgage department and to apply online.