Mortgage Basics | What to Know Before Buying a Home
8.152018
Mortgage Basics | What to Know Before Buying a Home

Buying a house is exciting, and a little scary, but figuring out the financing will make things a little less overwhelming. Choosing a mortgage isn’t as difficult as you think. The first step is to nail down a budget that fits your lifestyle. From there, you can figure out which mortgage is best for you! At DEXSTA Federal Credit Union, we will help with the house loan process!

Get Pre-qualified and Pre-approved

Before looking at houses, you need to know how much you can afford and the best way to figure that out is to get pre-qualified for your house loan. Your real estate agent may even request you do that before they work with you so that they can show you houses in your price range. To get pre-qualified, you will need to provide financial information, such as your income, savings, and investments, to your loan officer. They will calculate how much you could get for a house loan. The next step should be getting pre-approved for your mortgage because it backs up your offer to the seller. The seller will see that your offer is serious with a pre-approved house loan.

House Loan Options

There are five main house loan options, and your house loan officer will help you find the one that fits your lifestyle.

Conventional Mortgages

Conventional loans are ideal for people with stable income and employment history, strong credit, and willing to put down a down payment of at least five percent.

Jumbo Mortgage

This loan is for buyers looking to purchase a high-end home. This loan requires the borrower to have excellent credit, high household income, and a significant down payment.

VA (Government-Insured) Mortgages

If you have low cash savings, low credit, and can’t obtain a conventional loan, a VA loan is probably for you. This house loan tends to offer the best terms and flexibility compared to other loan types.

Fixed-rate Mortgages

If you are planning to stay at the house you are looking to buy—for seven to ten years—a fixed-rate mortgage will most likely fit your lifestyle. This mortgage offers stability with monthly payments.

Adjustable-Rate Mortgages

Maybe you don’t want to stay in your home beyond a few years. Then the adjustable-rate mortgage could be your solution because it will save on interest payments.

Interest Rates

The interest rate is used to determine your monthly mortgage payment. The higher the percentage, the higher your monthly payment will be. When you have a fixed-rate house loan, the interest rate on your loan will never change. Be sure to ask about interest rates when looking at house loans, because this will make a big difference on your payments.

Rate Lock

One more note about the interest rate; it can change by the time it takes to complete a house loan application. To protect yourself, ask your lender to lock in the rate that you have been quoted for, for a certain amount of time.

DEXSTA Federal Credit Union | House Loans

Our goal is to provide the highest level of service with competitive rates. Whether you are purchasing a home or refinancing your current house loan, we make it easy. Contact us or stop into one of our DEXSTA Federal Credit Union branches. Our mortgage loan center makes it easy for pre-qualification, custom rates, and expert advice to guide you through the house loan process.

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