17 Aug

Mortgage Tips for First-Time Homebuyers

first-time mortgage loan

If you’re reading this, you’re probably in the market for a new home and need a little mortgage guidance. Well lucky for you, we’ve got some great advice to make your first (or next) home-buying experience as simple as possible with some mortgage tips!

Prepare, Prepare, Prepare

Making the decision to buy a home is a big one and being fully prepared is crucial to the entire process going smoothly. If you’ve already done all of your research and know exactly what you want, be sure you have all the proper documentation ready and accessible when applying for a mortgage. You can find a complete list of all required documentation here. It is always a good idea to get pre-approved for a mortgage before you start shopping because it not only lets the seller know that you’re a serious buyer but also tells you what you can afford. Which bring us to our next point.

How Much Can You Afford?

You may think you can afford more house than you actually can. It’s important to factor in every detail from a down payment to interest when determining your budget for a home. Much like a credit card, mortgages can have high limits that can be tempting to max out but be careful. Just because you qualify for a high mortgage amount doesn’t mean you have to use that much. Be sure to carefully plan out your budget and determine what you can afford before committing to anything.

How is Your Credit?

A big factor in determining your mortgage interest rate is your credit score. If your credit score is lower, you will end up paying much more in interest over the life of the mortgage than someone with a higher credit score. It may be advantageous to work on building up your credit score before applying for a mortgage loan in order to save money in the long run.

Shop Around

A common mistake made by first-time homebuyers is to take the first mortgage they are offered. Be sure you shop around and get multiple quotes from various lenders before deciding and remember that even a small difference in interest rate can make a big financial difference over the life of a mortgage loan. As always, the best place to start is your credit union because we offer low, competitive mortgage rates exclusively for our members.