First-time homebuyer’s guide to getting a mortgage
Buying your first home can be a great experience with the right information and the right team in place. We're here to help as you prepare for the homebuying journey.
If you’re new to the homebuying process and just starting your research, it can be hard to know where to start, especially during uncertain times. How do you separate fact from fiction when it comes to securing a mortgage? We’re here to help dispel some mortgage myths and set you up for success.
Look beyond the interest rate
Contrary to what you might believe, your mortgage interest rate may not be the most important factor. There are plenty of numbers that go into your monthly mortgage amount and an interest rate is only one piece of the puzzle. Depending on the price of the house a small difference in mortgage interest rates could be manageable. For a home priced at $350k, for instance, you could be looking at a payment difference of $12 to $25 per month for every .125% increase in the interest rate. But note that these amounts do add up over the life of the loan.
Two other crucial factors are the size of the loan you plan to take out and how quickly you want to pay it off. Your costs will be greater the less money you put towards a down payment and the longer your loan term. Other factors that can impact your monthly mortgage payment include private mortgage insurance, property taxes, homeowner’s insurance and association fees.
Make your mortgage loan officer your ally
Don’t think you have to figure this all out on your own, either. Your mortgage loan officer can be your guide throughout the entire process, giving you options for real estate agents, builders, home inspectors and homeowner’s insurance agents.
Be sure to take full advantage of their experience. They can let you know which loans to consider, how to structure them and how much of a down payment you'll need. Above all else, don’t rule out a house you might want to buy before consulting with your mortgage loan officer.
Save for your down payment right away
It’s true that the down payment can be one of the biggest hurdles aspiring homeowners face, which is why you want to start saving as soon as possible.
Start saving what you can each month. For example, if you deposit $250 each month for twelve months into a savings account you will have saved up to $3,000 for a future down payment. Or deposit the difference between your current housing expense and your ideal future monthly mortgage payment. That way you can start building the cushion you need while getting used to the monthly expense.
Now that you know the basics, it’s time to put your plan into action.
7 steps to buying a house for the first time
From the spark of an idea to the moment you turn the key to your new home, here’s how to go about getting a mortgage:
If you’re ready to learn more about mortgages, we're here to help. Reach out to a mortgage loan officer to discuss your situation over the phone, via email or within a branch.