Purchasing a home can be exciting, but sometimes may be a little overwhelming, too. Knowing how to best prepare for homeownership can help relieve some of that stress.
Our loan advisors can lead you through each of the steps below, tailoring a path to homeownership that’s specific to you.
Buying a house is a big investment. One that can help build financial stability for your future. Yet, it also requires financial responsibility. Before choosing to become a homeowner, make sure that it's right for you. Consider how long you plan to live in your new home and if you're financially prepared to manage unexpected home repairs or expenses. Reach out to one of our loan advisors early in the process to help evaluate if this is a good time to start planning for homeownership.
To see if you can truly afford a home right now, build out a sample budget of what your monthly expenses will look like after adding a mortgage. Our helpful and easy-to-use mortgage calculators below can help provide you with a rough estimate of what your monthly mortgage payment may look like and what you may be able to afford. When you're ready to take the next step, reach out to your Acopia loan advisor to determine just how much home you could qualify for.
Knowing how much to save for a down payment can be tricky as there are several loan options available. You can opt to put 20% down and avoid paying Private Mortgage Insurance (PMI). Otherwise, 3.5-5% down works for many loan programs. There are also down payment assistance programs for some first time home buyers and there are even a few programs that don’t require a down payment at all. Your loan advisor can review all of your options with you.
When buying a home, plan to save for other expenses, too, such as closing costs, appraisal fees, homeowners insurance and possible HOA fees. Closing costs often include things like taxes, attorney, and transfer fees, depending on the type of loan you choose, and can average between 2-7% of the total home price. Keep minor home repairs and updates in mind, too. If you need help determining how much you might want to set aside, contact your loan advisor.
Everyone knows good credit is needed in order to qualify for a mortgage. Many factors play into good credit. Paying down debt, for example, especially large student loans and high-interest credit cards, will benefit your overall financial health and may also help you when applying for a home loan. Your debt-to-income (DTI) ratio (total monthly debt payments divided by gross monthly income) also plays an important role when lenders review your ability to qualify for a loan.
Now that you know your budget, use that as a basis to make a wish list, detailing important features of your ideal, yet affordable home. You probably can’t get exactly everything on your wish list, however, if you prioritize the list ahead of time, you may find something pretty close that's within your budget. Make sure to prioritize certain features and amenities of your new home, so you know what are must-haves and like-to-haves, and share that information with your real estate agent.
Prioritize items that are important to you and your family's lifestyle. Consider area conveniences that would be valuable, then take a drive and look around to see what makes certain communities attractive to you. Would you prefer a home in the city, closer to work, near a park, or maybe one with a community pool? Research school districts if you have school-aged children. Or, find out where area lakes, bike routes or hiking trails can be found.
An experienced real estate agent can guide you through each step of the home search and home buying process. They are community experts and usually have the inside scoop, regardless of if you are buying an existing or new construction home. Realtors know your area's real estate market inside-and-out and can help you find the best deals possible, and help you negotiate to get them. Ask your loan advisor for an agent referral.
There are many advantages to owning your own home. You can enjoy tax benefits while building equity in your future. Run the numbers on our Rent vs. Own calculator to get a general idea if now could be the right time to take that first step toward homeownership. Your loan advisor can also run a cost-benefit analysis to help you determine if buying a house makes more sense than continuing to rent.
How much house you can afford is closely linked with what payment you’re comfortable making each month. A quick conversation with your loan advisor about your income, assets and down payment is all it takes to get prequalified. Then, you’ll know what price range to shop for. Then, when you find the home you love, being prequalified will show the seller you’re serious.
You don't need an agent to buy a home – but you may want one. A seasoned real estate pro can help find homes in your price range, share insights when touring them, and may have access to more properties than what you’ll see online. It helps to have someone in your corner when scheduling home inspections, negotiating and making offers, too. Ask your loan advisor for a referral to a good local agent.
Buying a house may seem daunting, but knowing what to expect can help. First, determine how much house you can afford by getting prequalified. Next, call a good agent to help find your dream home. Then, set up an inspection/appraisal to verify its value. From there, you'll negotiate an offer, go under contract, lock in your rate, submit your documentation, and once approved, close on your new home.
Getting approved for the mortgage you want is all about staying within certain ratios lenders use to determine how much you can afford for a mortgage payment. Once your loan process gets started, be prepared to provide proof of the following: where you work, your income, assets, any debt you have, and how much you plan to put down on your home.
There are many loan products available. The amount you’ll be required to put down on a home depends on the type of loan you and your loan advisor decide is best for you. Many home buyers, especially first time buyers, put as little down as 3.5%, depending on the program. However, a down payment of at least 20% allows you to avoid private mortgage insurance (PMI), which adds to your monthly payment.
On fixed rates, the interest rate is set when you take out the loan and stays locked during the life of the loan. With an adjustable rate mortgage, the interest rate may start out lower, but can then reset over time. Adjustable-rate mortgages most often appeal to first-time homebuyers because lower rates boost buying power. Talk to your loan advisor to determine what option may be best for you.
Private mortgage insurance, or PMI is a type of mortgage insurance for conventional and government-backed loans, such as FHA and USDA loans. It is arranged with a private company and typically required when homebuyers put down less than 20 percent of the home’s purchase price. It can increase the cost of your loan and is generally included in your total monthly payment.
Mortgage points, or discount points, are fees paid at closing in exchange for a reduced interest rate. This is also called “buying down the rate,” which can lower your monthly mortgage payment. One point costs 1% of your mortgage amount. Essentially, you can pay some interest up front in exchange for a lower interest rate over the life of your loan.
Closing costs are fees and expenses you pay when you close on your home, beyond the down payment. They can run 3-5% of the loan amount and include items like title insurance, attorney fees, pre-paid interest, documentation fees, and taxes, depending on your type of mortgage, property location, and other factors. You will receive a good faith estimate of all costs in advance of your closing date.
There are many advantages to owning your own home. You can enjoy tax benefits while building equity in your future. Run the numbers on our Rent vs. Own calculator to get a general idea if now could be the right time to take that first step toward homeownership. Your loan advisor can also run a cost-benefit analysis to help you determine if buying a house makes more sense than continuing to rent.
How much house you can afford is closely linked with what payment you’re comfortable making each month. A quick conversation with your loan advisor about your income, assets and down payment is all it takes to get prequalified. Then, you’ll know what price range to shop for. Then, when you find the home you love, being prequalified will show the seller you’re serious.
You don't need an agent to buy a home – but you may want one. A seasoned real estate pro can help find homes in your price range, share insights when touring them, and may have access to more properties than what you’ll see online. It helps to have someone in your corner when scheduling home inspections, negotiating and making offers, too. Ask your loan advisor for a referral to a good local agent.
Buying a house may seem daunting, but knowing what to expect can help. First, determine how much house you can afford by getting prequalified. Next, call a good agent to help find your dream home. Then, set up an inspection/appraisal to verify its value. From there, you'll negotiate an offer, go under contract, lock in your rate, submit your documentation, and once approved, close on your new home.
Getting approved for the mortgage you want is all about staying within certain ratios lenders use to determine how much you can afford for a mortgage payment. Once your loan process gets started, be prepared to provide proof of the following: where you work, your income, assets, any debt you have, and how much you plan to put down on your home.
There are many loan products available. The amount you’ll be required to put down on a home depends on the type of loan you and your loan advisor decide is best for you. Many home buyers, especially first time buyers, put as little down as 3.5%, depending on the program. However, a down payment of at least 20% allows you to avoid private mortgage insurance (PMI), which adds to your monthly payment.
On fixed rates, the interest rate is set when you take out the loan and stays locked during the life of the loan. With an adjustable rate mortgage, the interest rate may start out lower, but can then reset over time. Adjustable-rate mortgages most often appeal to first-time homebuyers because lower rates boost buying power. Talk to your loan advisor to determine what option may be best for you.
Private mortgage insurance, or PMI is a type of mortgage insurance for conventional and government-backed loans, such as FHA and USDA loans. It is arranged with a private company and typically required when homebuyers put down less than 20 percent of the home’s purchase price. It can increase the cost of your loan and is generally included in your total monthly payment.
Mortgage points, or discount points, are fees paid at closing in exchange for a reduced interest rate. This is also called “buying down the rate,” which can lower your monthly mortgage payment. One point costs 1% of your mortgage amount. Essentially, you can pay some interest up front in exchange for a lower interest rate over the life of your loan.
Closing costs are fees and expenses you pay when you close on your home, beyond the down payment. They can run 3-5% of the loan amount and include items like title insurance, attorney fees, pre-paid interest, documentation fees, and taxes, depending on your type of mortgage, property location, and other factors. You will receive a good faith estimate of all costs in advance of your closing date.