It’s finally happened. The rental market is sky high, you’re tired of annoying landlords and want the ability to modify your home into the pad of your dreams, and you’re ready to buy your first home.
The decision to start looking is easy, but there are many factors to consider. We’ve consolidated some basic tips for first-time buyers using our decades of experience helping put servicemembers and their families into a forever home.
Understand your credit rating, and get it as high as possible
A credit score is like a report card for your ability to pay back loans. Essentially, it tells lenders how likely they are to get the money back that they lend you. The higher your score, the better chance they’ll make money from the interest payments on your loan. This reliability is rewarded with a more favorable loan rate, which means less money paid overall through the lifetime of the loan.
If your score isn’t the greatest, no worries. Navy Federal has plenty of ways for getting that number back into a competitive range. Like consolidating your debts into a single monthly payment, which will help get your bills under control and rebuild that rating. While a few percentage points one way or another may not seem like much, over the lifetime of a fixed-rate 30-year loan that could mean a difference of thousands of dollars in interest payments.
Get your finances in order with a balanced budget
There’s nothing worse than finally closing on your dream home, only to realize a few months later that you’re spending more than your income is bringing back in.
The simplest (not always easiest) way to avoid this is to make an honest budget beforehand. However, as anyone who’s ever tried to plan out their finances knows, the difference between making a budget and sticking to it can be huge. The daily expenses we never bother to track can carefully pile up. If you’re getting a $6 smoothie after your workouts that’s $120 a month if you’re hitting the gym Monday through Friday. We’re not saying you have to give up your daily acai blueberry sunrise, just that you need to realize it’s a recurring expense and track it accordingly. One of the biggest mistakes people make when creating a budget is not, to be honest with themselves about where their money is going. Anything you’re buying or paying off regularly should be tracked and accounted for.
Get pre-approved for a mortgage loan
Securing a great rate on a mortgage loan from Navy Federal Credit Union is just part of the process of budgeting for your new home. You’ll need an understanding of the local utility costs, property taxes, HOA fees (if applicable), and other expenses not directly tied to the home itself.
Once you’re satisfied with your credit score and have a solid handle on your budget, it’s time to find the right loan to fit your needs. Navy Federal has mortgage calculators to help you understand potential monthly payments, closing costs, income qualifiers, down payments, and more!
Once you’ve found a loan that meets your budget, get preapproved for a loan so you’ll have a good idea of what your total home is. Navy Federal offers a 60-day Freedom Lock on rates, so you’ll have plenty of time to close on your new home without worrying about an early expiration date. The best part is if the interest rates drop below your initial lock value, you can apply for the lower amount two additional times before the offer expires! We’re so confident in our amazing loan offers, that if you find a better rate through another lender, we’ll match it or give you $1,000. Plus, for qualifying loans, if the rate drops after you close we’ll lower it for only $250, with no need to refinance or pay out thousands more in closing costs.
Find the house of your dreams
The 2nd best part (in our opinion) of the home-buying process is shopping for the perfect property. Navy Federal makes the process even easier with the RealtyPlus program.
While most home-buyers have a general idea of what they’re looking for in a home, many are put off by the prospect of scouring the local market themselves. Unfortunately, with the over-saturation of real estate agents, finding someone to work with who is responsive, understands your needs, and is willing to put in the time for all of their clients equally can be just as difficult as finding the actual property. The RealtyPlus program solves this by giving you access to the profiles of all certified Navy Federal partnered real-estate agents to find the one that’s just right for you and your home-buying needs.
You’ll also be assigned a RealtyPlus Coordinator who will assist with agent coordination to ensure you’re involved in every step of the way and provide peace of mind, knowing that everything is being handled in the most efficient and timely way possible.
As an additional incentive, once you’ve closed on your home using a Navy Federal RealtyPlus agent, you can get up to $9,000 cashback based on the total value of the property purchased. A win-win scenario for everyone.
Your new home
The final (and best) part of the home-buying process is the day you finish signing the mountain of documents, are handed the keys, and step through the door for the first time. An entire world of possibilities lies in front of you as a new homeowner, and the only limit is your imagination and how far it will take you. Navy Federal even lets you choose the closing process that’s right for you, whether it be a traditional in-office signing or a hybrid e-closing where you can sign a large portion of the documents online before showing up in person, saving you time and getting you through the door of your new home even faster!
So if you’re ready to start your journey to home ownership, remember these tips, and let Navy Federal Credit Union help you achieve the milestone you’ve been dreaming of.
This article was sponsored by Navy Federal Credit Union