There comes a point in the life of most Americans’ lives when they consider making the switch from renter to homeowner. Maybe the rental market is exorbitant, or you’re tired of annoying landlords, or maybe you just want the freedom to modify your living space into the ideal layout. Regardless, it’s time to buy your first home.
The decision to start looking is easy, but there are many factors to consider and questions to ask. We’ve consolidated some basic tips for first time buyers using Navy Federal’s decades of experience helping put service members and their families into a forever home.
What’s my credit score?
A credit score is like a report card for your financial reliability, and lets a bank know how likely you are to pay back a loan. The higher your score, the better chance they’ll make money from the interest payments on your loan. This reliability is in turn rewarded with a more favorable rate, which means less money paid overall through the lifetime of the loan.
If your score isn’t as good as it could be, no worries. There are plenty of ways to get that number back into a competitive range. While a few percentage points one way or another may not seem like much, over the lifetime of a fixed-rate 30-year loan it could mean a massive difference in overall interest payments.
How much house can I afford?
There’s nothing worse than closing on your dream home, only to find a few months later that you’re spending more than your income is bringing.
The simplest 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 enormous. The small daily expenses we never bother to track can quickly pile up. If you’re getting coffee that costs $7 on the way to work every day, that’s $140 a month. That doesn’t mean you have to give up your daily caffeine infusion, but you need to realize it’s a recurring expense and track it accordingly. Every little bit helps, and one of the biggest mistakes people make when creating a budget is not to be honest with themselves about where their money is being spent. It’s tempting to ignore those little purchases, but it can all add up fast. Anything you’re buying or paying out regularly should be tracked and accounted for in a well-managed budget.
Securing a great rate on a mortgage loan from Navy Federal Credit Union is another major part of the process in budgeting for your new home. You’ll need an understanding of your 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!
After you’ve found a loan that meets your budget, get pre-approved so you’ll have a good idea of what your total home budget is. Navy Federal offers a 60-day Special Freedom Lock1 on special loans, 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, you can request a lower rate twice before the offer expires. Plus, with NFCU’s HomeSquad loan program, you’ll receive step-by-step guidance, along with the support of a dedicated team of professionals and a personal loan advisor to help make the process as easy as possible.
How do I find the house I want?
The 2nd best part (in our opinion) of the homebuying 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 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 RealtyPlus 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 providing the peace of mind that comes with 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 RealtyPlus agent, you can get up to $9,000 cash back based on the total value of the property purchased.2 A win-win scenario for everyone.
Your new home
Without question the best part of the homebuying process is the day you finish signing the last mountain of documents, get handed the keys, and step through the door of your new house for the first time. It only happens once, so enjoy it, and the entire world of possibilities open in front of you as a homeowner. The only limit is how big you can dream!
This article was sponsored by Navy Federal Credit Union. Navy Federal Credit Union is federally insured by NCUA.
1 Special Freedom Lock is available for new applications on purchase and refinance loans at no additional fee for a 60-day lock. You must request the Special Freedom Lock option during the initial lock request. You may request a lower rate no more than two (2) times, with a maximum cumulative interest rate reduction of 0.50%. You must monitor rates to decide when to exercise the option to lower the rate. All requests for a lower rate must occur at least seven (7) calendar days before closing.
2 The program is only available for individual home purchases/sales in the contiguous US, Alaska, and Hawaii, excluding Iowa and all employer-sponsored relocations. You are not required to receive financing through Navy Federal Credit Union in order to receive the benefits of this program. The cash back is only available with the purchase or sale of your home through the use of a program-referred and -approved real estate agent, and is offered in most states, with the exception of Iowa, Alaska, and Oklahoma, and is not available in certain transactions with restricted agent commissions (including many new constructions, For Sale by Owner, or For Sale by iBuyer transactions). Your assigned agent can help you identify any transactions where the cash back would not be available. The amount of your cash back depends on the value of the property you are buying or selling. Obtaining the full $9,000 cash back requires transacting in a property valued at $3 million or greater. To calculate your potential cash-back amount, please visit the RealtyPlus website: https://navyfederalrealtyplus.com/. The cash-back offer is limited to one cash back per property with no limit on the number of times you may use the program. In some states, a gift card or commission credit at closing may be provided in lieu of the cash back. In Kansas and Tennessee, a Mastercard® MAX gift card will be issued with preloaded points that are ready for spending at specified retail establishments after closing. State regulations in Kansas limit the dollar amounts and the type of incentive. In Mississippi, New Jersey, and Oregon, a commission reduction may be available at closing in lieu of cash back. Please check with the program coordinator for details. All real estate commissions are negotiable. Contact RealtyPlus for terms and conditions. Seller listing fees apply. This program is offered, in part, by Anywhere Leads Inc., which may receive a co-operative brokerage fee as a result of a referral to any affiliated real estate companies, including Better Homes and Gardens® Real Estate, Coldwell Banker®, Century 21®, ERA® Real Estate, and Corcoran. Program terms and conditions are subject to change at any time without notice. Additional terms, conditions, and restrictions apply. This is an advertisement and not a solicitation for agent representation if your property is currently listed with an agent. Anywhere Leads Inc., 175 Park Avenue, Madison, NJ 07940. Licensed broker in the state of Texas. Broker license #9009191.