The spring is a perfect time to start shopping for a new home. Whether you are purchasing your first home or getting ready to upgrade to a larger place, buying a home can be stressful. While you begin your journey toward finding your dream home, keep in mind the following tips:
Are you ready to purchase a new home?
There are costs involved in buying a home that will require a cash outlay up front. Typically the down payment and closing costs are the largest component of up-front costs. To avoid Private Mortgage Insurance (PMI), most lenders require a down payment of 20% of the purchase price of the home. In addition to the up-front costs, other costs of home ownership need to be kept in mind such as appliances, home décor, lawn equipment, and moving expenses.
Knowing and monitoring your credit score is essential since mortgage rates and eligibility is contingent upon your credit score. Most conventional loan programs require a score of 660 or higher. If there are errors on your credit report that are impacting your score, you should have them corrected prior to applying for a mortgage.
What can you afford to pay?
UECU provides online mortgage calculators that can help you determine how much you can afford to pay monthly for your home as well as the maximum loan amount that would fit your budget. To access the online mortgage calculators, visit uecu.org/mortgage. Typically your total debt ratio, all of your monthly debts as a percentage of monthly income, should be less than 42%. Your housing ratio, total housing debt including monthly principal, interest, taxes, and insurance as a percentage of monthly gross income should be less than 32%.
How do you get started?
Gather personal information on income and assets, such as current paystubs, W-2’s, tax returns, bank statements, and investment statements. Your level of income, assets available, and credit score are key factors that the lender will consider.
Once you have documented and gathered personal information, you should get pre-qualified. UECU offers mortgage loan pre-qualifications. This will enable you, as well as the realtor, to know the type of home that you can afford. If you have questions or would like to get pre-qualified for a UECU mortgage, contact a mortgage professional at 800-288-6423, ext. 4001. To apply online, visit uecu.org/mortgage.
Additional factors to consider when you are house hunting:
UECU Spring Mortgage Specials
The Credit Union is currently offering special mortgage discounts and financing options for UECU members. First-time homebuyers* can take advantage of our 97% loan to value program which requires a down payment of only 3%**. UECU is also waiving the loan origination fees for all qualifying homebuyers, saving members as much as $750 up front on closing costs^. Our staff is ready to help you, as soon as you are ready to take the next step toward home ownership.
To apply, visit uecu.org/mortgage or contact a Mortgage Specialist at 800-288-6423, ext. 4001.