Buying a home is one of the biggest financial decisions you’ll make, but it doesn’t have to be overwhelming. Whether you’re a first-time home buyer, looking to upgrade or searching for your forever home, understanding the process can help you feel confident every step of the way. As healthcare professionals, your days are spent caring for others. Let us help make the home-buying process easier so you can focus on what matters most.
Step 1: Know your budget
Before you begin scrolling through listings or attending open houses, it’s important to understand how much home you can comfortably afford. A mortgage professional can review your income, debts and financial goals to determine a price range that fits your budget.
Keep in mind that home ownership includes more than just a mortgage payment. You’ll also want to budget for:
- Property taxes
- Homeowners insurance
- Utilities
- Maintenance and repairs
- HOA fees (if applicable)
Step 2: Build your home-buying team
A successful home purchase often involves a team of professionals working together, including:
- Trusted mortgage lender
- Knowledgeable real estate agent
- Title company
- Home inspectors
- Insurance professionals
Having experienced experts guiding you through the process can make your home-buying journey much smoother.
Step 3: Get pre-approved
One of the smartest things you can do before shopping for a home is obtain a mortgage pre-approval.
A pre-approval:
- Shows sellers you’re a serious buyer
- Helps you shop within your budget
- Strengthens your offer in competitive markets
- Gives you peace of mind before house hunting
Most sellers and real estate agents recommend having a pre-approval in hand before beginning your search.
Step 4: Understand options on down payment
Many buyers believe they need 20% down to purchase a home, but that’s often not the case.
Depending on the loan program, qualified buyers may be able to purchase a home with a down payment of at least 3% and generally between five and 20% of the home’s purchase price to qualify for a mortgage. If your down payment is less than 20%, you’ll typically be required to obtain PMI (Private Mortgage Insurance). PMI protects the lender, not the borrower in the event the loan goes into default. In many cases, PMI can be removed once your loan balance reaches 80% of your home’s value, as long as the lender requirements are met. While it does add to your monthly mortgage payment, it makes homeownership possible for the buyers that do not have the 20% for down payment.
There are also programs available for first-time home buyers that may provide additional assistance. In addition to the down payment, there are closing costs that include an appraisal fee, credit report fee, tax services fee and more. These costs will generally run between two and 5% of your purchase price.
Step 5: Protect your credit
Your credit score plays an important role in qualifying for a mortgage and securing a competitive interest rate.
If you’re planning to buy a home:
- Continue making payments on time
- Avoid opening new credit accounts
- Don’t make large purchases on credit
- Keep credit card balances low
- Consult your lender before making major financial changes
Small decisions can have a significant impact on your mortgage approval.
Step 6: Be prepared for closing
Once you’ve found the right home and your offer is accepted, your loan will move through the underwriting and approval process.
During this stage, your lender may request additional documentation. Responding quickly can help keep your closing on schedule.
Before closing, you’ll receive details regarding your loan terms, closing costs and final cash-to-close amount so there are no surprises on closing day.
Home ownership is within reach
The path to home ownership may seem complicated, but with the right guidance it can be an exciting and rewarding experience. Whether you’re purchasing your first home or your next home, planning ahead and working with a trusted mortgage professional can help make the process stress-free.
At KH Credit Union, we’re committed to helping Kettering Health employees achieve their home ownership goals. From pre-approval through closing, we’re here to answer your questions and guide you every step of the way.
Ready to buy your home?
Contact Ileana Poteet, Mortgage Loan Officer at KH Credit Union, to discuss your options and get pre-approved today.
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Ready to take advantage of one of your Kettering Health benefits?
Whether you’re looking to save more, borrow smarter, or simply improve your financial wellness, KHCU is here to help. Visit us online, stop by our office, or contact our team to learn more about becoming a member.
We look forward to helping you achieve your financial goals.