Thinking about buying a home? There’s a lot you need to know, especially if you’re a first-timer. The process may seem nerve-wracking at first, but that’s because it is so important. If you follow the right process, you can feel confident you will purchase a home that is appropriate for you and your financial life.
Elements is here to break down the steps of buying a home for you, so you can be prepared for what is ahead.
Step 1: Get Pre-Approved
Receiving a pre-approval from a lender should be the first thing you do when beginning the home buying process.
Your credit score can play a large factor in a lender's decision and the terms that you qualify for.
- Your credit score is a way to track how you manage money over time.
- The data comes from creditors, public records, and debt collection agencies.
- There are three major credit bureaus and scores can range from 300 to 850.
There are various factors that make up your credit score. The chart below shows the criteria used by the FICO score generator and each factor’s importance to your credit score. Keep in mind, the higher your credit score, the better your mortgage rate will be.
Other factors that impact your rate:
- Type of Loan
- Length of Loan
- Property Type
- Loan Amount
Step 2: Choose the Right Loan
What mortgage product is right for you? The type of loan, down payment options, and loan terms should be considered when choosing a mortgage product.
What types of mortgages are available?
- Adjustable Rate
- VA and USDA
Elements Unique Programs
- First Time Homebuyer
- Professional Program
- Bridge/Swing Loans
- Land Loans-Construction Loans
Elements is able to offer lower loan rates and unique products as a credit union with a team of more than a dozen Mortgage Loan Originators, experienced with all types of loans.
Step 3: Find a Good Realtor
Once you find your Mortgage Loan Originator, they may put you in contact with a recommended real estate agent. Or, you can choose to pick a real estate agent based on a referral from family or friends.
It is important to get a real estate agent on your side because their expertise can help identify problems and solutions that you might miss. It costs you nothing to hire a real estate agent for a home purchase, as the seller pays the agent commissions.
Step 4: Find the Right Time
Things to consider:
- Think about what’s important to you now, and in the future.
- Find a house that matches your lifestyle.
- Research market conditions of the neighborhood.
- Work with your agent to extend an offer.
- Consider contingencies, such as an inspection and appraisal.
- Contact Elements before you contact a real estate agent.
- Locate important financial documents.
- Notify your Mortgage Loan Originator if you plan to receive gift funds for closing costs and/or your down payment.
- Keep a paper trail of all funds transferred or deposited to your accounts.
- Don't change jobs without inquiring about how this could affect your loan approval.
- Don't make major purchases.
- Don't obtain or deposit unusually large sums of money.
- Don't open, close, or transfer any asset accounts without speaking to your Mortgage Loan Originator.
Have questions or need trusted advice? Our credit union experts are always here for you. Contact Elements Financial for support in all aspects of your financial life.