5 Article continued on Pg 2 Buying a Home Thinking about buying your first home? Before you can unlock the door to homeownership, you have to take some im- portant first steps. From finding the perfect locaon to financing your purchase, shopping for your first home has challenges that go beyond curb appeal and interior features. Here are 5 important steps to take before buying your home. 1. Plan for the OTHER expenses: Many first-me homebuyers decide to buy when they feel ready for a mortgage. But just because they can afford the mortgage payments doesn’t mean they can afford to own a home. Property insurance, taxes, homeowners associaon dues, maintenance, and higher electric and water bills are some of the costs that first-me homebuyers tend to overlook when shopping for a place. Keep in mind property taxes and insurance have a tendency of going up every year. Even if you can afford it now, ask yourself if you’ll be able to afford the increased costs later. Even though it’s your first home, you must think of it as a long-term commitment. If you have to switch jobs in a year or two, and may have to move for the job, you should think twice. Ideally, you should picture yourself living in that house for 5 to 7 years. 2. Mortgage Prequalificaon: Homebuying doesn’t begin with home searching. It begins with a mortgage prequalificaon — unless you’re lucky to have enough money to pay cash for your first house. Don’t be afraid to get prequalified. Don’t fear the lender may tell you that you don’t qualify for a mortgage or they qualify for a loan smaller than expected. It is beer to know then pick a price range out of the sky and say, ‘Let’s go look for a house’. First things first- you get preapproved, and then you find a home. That way, you’ll make a finan- cial decision versus an emoonal decision. 3. Get References: New to the homebuying game? You’ll need a reputable real estate agent, a good loan officer or broker, and perhaps a lawyer. Venturing into this process alone, without professional help, is not a good idea. While every rule has its excepon, generally, first-me homebuyers should not try to deal directly with the lisng agent. If you hire an agent without a referral from friends or family, ask the agent to provide references from previous buyers. The same goes for loan officers or mortgage brokers. It’s crucial to find a professional who will give you truly independent advice. Somemes that means hiring a lawyer. 4. It’s risky to deplete savings: Spending all or most of their savings on the down payment and closing costs is one of the biggest mistakes first-me homebuyers make. Some people scrape all their money together to make the 20% down payment so they don’t have to pay for mortgage insurance, but they are picking the wrong poison because they are leſt with no savings at all. Homebuyers who put 20% or more down don’t have to pay for mortgage insurance when geng a convenonal mortgage. That’s usually translated into substanal savings on the monthly mortgage payment. But it’s not worth the risk of living on the edge. I’d take paying for mortgage insurance any day over not having Steps to take before News Community June 2017 issue
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Article continued on Pg 2
Buying a HomeThinking about buying your first home? Before you can
unlock the door to homeownership, you have to take some im-portant first steps. From finding the perfect location to financing your
purchase, shopping for your first home has challenges that go beyond curb appeal and interior features.
Here are 5 important steps to take before buying your home.
1. Plan for the OTHER expenses:Many first-time homebuyers decide to buy when they feel ready for a mortgage. But
just because they can afford the mortgage payments doesn’t mean they can afford to own a home. Property insurance, taxes, homeowners association dues, maintenance, and
higher electric and water bills are some of the costs that first-time homebuyers tend to overlook when shopping for a place.
Keep in mind property taxes and insurance have a tendency of going up every year. Even if you can afford it now, ask yourself if you’ll be able to afford the increased costs later. Even
though it’s your first home, you must think of it as a long-term commitment. If you have to switch jobs in a year or two, and may have to move for the job, you should think twice. Ideally, you should picture yourself living in that house for 5 to 7 years.
2. Mortgage Prequalification:Homebuying doesn’t begin with home searching. It begins with a mortgage prequalification — unless you’re lucky to have enough money to pay cash for your first house.
Don’t be afraid to get prequalified. Don’t fear the lender may tell you that you don’t qualify for a mortgage or they qualify for a loan smaller than expected. It is better to know then pick a price range out of the sky and say, ‘Let’s go look for a house’.
First things first- you get preapproved, and then you find a home. That way, you’ll make a finan-cial decision versus an emotional decision.
3. Get References:New to the homebuying game? You’ll need a reputable real estate agent, a good loan officer or broker, and perhaps a lawyer. Venturing into this process alone, without professional help, is not a good idea. While every rule has its exception, generally, first-time homebuyers should not try to deal directly with the listing agent.
If you hire an agent without a referral from friends or family, ask the agent to provide references from previous buyers. The same goes for loan officers or mortgage brokers. It’s crucial to find a professional who will give you truly independent advice. Sometimes that
means hiring a lawyer.
4. It’s risky to deplete savings:Spending all or most of their savings on the down payment and closing costs is one
of the biggest mistakes first-time homebuyers make. Some people scrape all their money together to make the 20% down payment so they don’t have to pay for
mortgage insurance, but they are picking the wrong poison because they are left with no savings at all.
Homebuyers who put 20% or more down don’t have to pay for mortgage insurance when getting a conventional mortgage. That’s usually translated
into substantial savings on the monthly mortgage payment. But it’s not worth the risk of living on the edge.
I’d take paying for mortgage insurance any day over not having
Steps to take beforeNews
CommunityJune 2017 issue
Article continued from Pg 1
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money for rainy days. Everyone — especially homeowners — needs to have a rainy-day fund.
5. Keep Your Wallet Shut:You have prequalified for a loan. You found the house you wanted. The contract is signed and the closing is in 30 days. Don’t celebrate by financing another big purchase.
Lenders pull credit reports before the closing to make sure the borrowers financial situation has not changed since the loan was approved. Any new loans on your credit report can jeop-
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ardize the closing. Buyers, especially first-timers, often learn this lesson the hard way. They sign the contract then they want to go buy furniture for the house or a new car.
Buying a home is possibly the largest single investment of your lifetime. You want to make sure it’s done right.
Contact WCCU today to get started. Our mortgage professionals will prequalify you and help you
determine the best mortgage to fit your needs!
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Article adapted from Bankrate.com, ‘5 First-Time Homebuyer Mistakes’; Polyana Da Costs 5.9.17.
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WCCU in the NewsNHS attends WCCU CU4Reality Fair
WCCU Cares: In May, over 100 students from Narragan-sett High School attended our WCCU CU4Reality Financial Literacy Fair. Armed with a career/salary- students secured
housing, food, transportation,& more to complete a real-life budget. Those same students also completed a 9-course on-line financial literacy program, also sponsored by WCCU, & received their Certificates of Completion. Congratulations!
A special thanks to our Staff and our local businesses who helped man tables at the fair. We appreciate your
commitment to financial literacy.
Members Financial Services- Wayne LaGasse u Ocean Roads Realty- Maria Theriault u Rose and Kiernan
Insurance- Dawn Pater u Total Look Salon- Michelle Waterman u Traveling Gypsy- Lisa Roy u Verizon- Dave
Moone/Kelcey Marks u Walmart- Brenda Richmond.
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