Homebuyer’s Guide
Buying a home and getting a mortgage can be a confusing and intimidating process, especially if you’re purchasing your first home. After all, your home is not just an important financial asset, it’s also the place where you raise your kids, celebrate milestones and make memories that last a lifetime. Here’s an overview of how the home buying process works and the things you should consider before you buy a home.
Step 1: Learn about mortgages
If you aren’t sure how mortgages work or what kind of loan is best for you, take a look at Demystifying Mortgages. There are many factors to consider when looking for a home and a mortgage, and you’ll need to understand the terminology, as well as how different types of mortgages work.
Step 2: Figure out what you can afford
Before you start shopping for your dream home, decide on your budget. Many experts recommend that your housing costs — including mortgage, taxes and insurance — should be no more than 28% of your monthly income. Others say that your home should cost three to five times your annual household income. These guidelines can be useful, but you need to look at all your whole financial picture to decide what will work for you.
Use our Mortgage Qualifier Calculator to figure out the loan amount that makes sense for your situation and break down all the costs of buying a home.
Talk with a VyStar Mortgage Loan Officer to find out how much you could qualify for, as well as the pros and cons of different types of mortgages.
Set up an appointment for free financial counseling if you want to discuss your budget and financial plan with a personal finance expert.
Step 3: Check your credit report
A good credit score can help you get better terms for a mortgage, so it’s important to make sure your report is accurate, complete and up to date before you apply for a loan. If there are any errors or inaccuracies that affect your credit score, you can correct them before you apply. Learn how to check your credit report for free and get reports from all three nationwide reporting agencies: Equifax, Experian, and TransUnion.
Step 4: Find a real estate agent
A good real estate agent does more than just find you the right home. They are also experts on the home buying process, and with their knowledge and skill, they can help you navigate the current housing market and put in a strong offer on the home you want. Having an experienced real estate agent on your side can make all the difference, especially when you’re competing with other buyers in a hot real estate market.
Step 5: Gather your documents and information
When you apply for a mortgage, we may need documents like tax returns and bank statements, as well as basic information about you, before we can approve the loan. See our Mortgage Application Checklist to find out what we need from you.
Step 6: Get preapproved
Getting a preapproval improves your buying power and lets you know how much home you can afford. And, sellers are more likely to accept your offer if you are already preapproved. Apply here to get started.
Step 7: Find your dream home and make an offer
You can do research online to see what’s available, and your real estate agent can show you homes in your price range and advise you about neighborhoods that might be appealing to you. Buying a home can be an emotional process, so make sure you shop around and consider the following factors before you make an offer.
What is the neighborhood like? You can change a lot of things about a home, but the location isn’t one of them. If you’re not comfortable living on a busy street or in a densely populated area, then keep looking. To learn more about the neighborhood, you can visit at different times of day or talk with your real estate agent about their impressions.
Does the home require any major repairs or renovations? You may be able to do some work yourself but be sure you have enough money in your budget to call in a licensed expert if you need to. If you’re envisioning major renovations, it makes sense to get a contractor’s estimate for both the time and cost required before you put in an offer on the home.
What’s happening in the real estate market? If homes are selling fast in a competitive market, you may be tempted to put in an offer on the first home that appeals to you. Or you may be inclined to look at all the available homes in your preferred neighborhood before you decide. No matter what your decision-making style, it’s important to get advice from your agent about your local real estate market so you know how quickly you’ll need to act. You don’t want to miss out on a great opportunity by moving too slowly, but you also want to avoid rushing into a decision that you’ll regret later.
Step 8: Get a home inspection
It’s not required, but it’s a good idea to get a home inspection before you finalize the purchase of your home. A home inspector determines if the home is up to code and inspects it inside and out. This identifies any obvious issues that need to be fixed, as well as past renovations that may not be up to code.
Since the buyer usually pays for the home inspection, it can be tempting to skip it and save some money, especially in a hot market where sellers are getting multiple offers. However, if there is a problem with the home, a home inspection contingency allows you to renegotiate the price based on the repairs that need to be made, which could save you thousands of dollars in the long run. The last thing you want is to find out that your new home needs an expensive new foundation after the purchase is complete.
Step 9: Finalize your mortgage
Whatever type of mortgage you choose, your Mortgage Loan Officer will help you finalize it. As part of that process, we’ll arrange for the home appraisal, which ensures that the home is worth the price that you’re paying for it. We can help you with title insurance, which covers you against losses and legal expenses if there are problems with the title to the property. You’ll also need to get homeowners insurance so that you’re covered if anything happens to your home.
Step 10: Close on your home
At closing, you’ll sign all the paperwork for the home sale and your mortgage. Be sure to bring your ID so the title company can verify your identity. After you sign all the documents, your purchase is complete. Your VyStar Mortgage Loan Officer can give you all the details about the timing of the transaction.
Step 11: You’re a homeowner!
It’s time to pick up your keys and start packing so you can move into your new home. Buying real estate is exciting, and at the end of it all, you’ll be right at home.
All loans subject to credit approval. All credit union programs, services, rates, terms and conditions are subject to change at any time without notice.
