First-Time Homebuyer Guide

Your Options
Your Budget
Hire A Realtor
Make An Offer
Application Process

Buying Your First Home

Feel free to dream and leave the mortgage to us.
Brick Home

Finding the home of your dreams is the tough part. The mortgage process shouldn't be. That's why we've created a guide to make your first-time home buying experience easier.

This homebuyer guide will help you:

  • Identify the "perfect home" for you
  • Understand the costs associated with homeownership
  • Select a REALTOR®
  • Weigh your financial options
  • Prepare for closing

First-Time Homebuyer Tips

Mortgage And Payment Options

Calculate Mortgage Payments Apply For A Mortgage

Consider Your Options
The first step is to consider whether buying a home or renting makes better sense for you.

Reasons to Buy

Equity: Each time you make a payment, you're one step closer to paying off your home.

Tax Deductions: You can deduct mortgage interest and property taxes. Consult a tax advisor about your situation.

Control: When you own a home, you select your own contractor for repairs. You can also be more creative – you can paint the walls any color you would like and even add a room.

Value: Your home could increase in value, making it worth more than you paid for it.

Financial Predictability: Fixed-rate mortgages allow you to predict your monthly principal and interest payment, unlike monthly rent payments, which can increase over time.

See Associated Home Buying Fees


Reasons to Rent

Flexibility: Unsure of your career and income? Renting gives you time to figure things out without being tied to a mortgage.

No Maintenance: Pipe leaking? Don't worry about going to your local hardware store. Simply call the landlord to have it repaired.

Bad Credit: If you have bad credit, having a history of making on-time rental payments can help you qualify for a mortgage down the road.

Utilities included: Sometimes utilities like water, sewer, and garbage are all paid by the landlord when you rent.

Are You Better Off Renting?

Reasons to Build

Customization: The primary advantage of building a new home is that it can be built to your specifications.

New Materials: A new home will have new wiring, new plumbing and will be up-to-spec with building codes. They are also more energy-efficient than older homes.

Costs: Although purchasing a home may be less expensive upfront, once you include renovations, maintenance and upgrades, it could be more expensive than building.

Learn About Building


Reasons to Buy

Negotiation: Buyers often have more room for negotiating a price, something that is rare when building a home.

Move-In Ready: In many cases, homes come with appliances, and even have other features such as fences and landscaping.

Shorter Process: Buying can be less stressful than building and often takes only 4–6 weeks. Building a home could range from four months to over a year, and many things can go wrong during the construction process.

What Home Can I Afford?

Reasons to Buy

Equity: Each time you make a payment, you're one step closer to paying off your home.

Tax Deductions: You can deduct mortgage interest and property taxes. Consult a tax advisor about your situation.

Control: When you own a home, you select your own contractor for repairs. You can also be more creative – you can paint the walls any color you would like and even add a room.

Value: Your home could increase in value, making it worth more than you paid for it.

Financial Predictability: Fixed-rate mortgages allow you to predict your monthly principal and interest payment, unlike monthly rent payments, which can increase over time.

See Associated Home Buying Fees


Reasons to Rent

Flexibility: Unsure of your career and income? Renting gives you time to figure things out without being tied to a mortgage.

No Maintenance: Pipe leaking? Don't worry about going to your local hardware store. Simply call the landlord to have it repaired.

Bad Credit: If you have bad credit, having a history of making on-time rental payments can help you qualify for a mortgage down the road.

Utilities included: Sometimes utilities like water, sewer, and garbage are all paid by the landlord when you rent.

Are You Better Off Renting?

Reasons to Build

Customization: The primary advantage of building a new home is that it can be built to your specifications.

New Materials: A new home will have new wiring, new plumbing and will be up-to-spec with building codes. They are also more energy-efficient than older homes.

Costs: Although purchasing a home may be less expensive upfront, once you include renovations, maintenance and upgrades, it could be more expensive than building.

Learn About Building


Reasons to Buy

Negotiation: Buyers often have more room for negotiating a price, something that is rare when building a home.

Move-In Ready: In many cases, homes come with appliances, and even have other features such as fences and landscaping.

Shorter Process: Buying can be less stressful than building and often takes only 4–6 weeks. Building a home could range from four months to over a year, and many things can go wrong during the construction process.

What Home Can I Afford?

Consider Your Budget
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Perfect Payment

Understand the breakdown of your monthly mortgage and see how your income, credit scores, down payment, and debt affects your payment.

Learn More

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Pre-Approval

We offer fast and free pre-approvals that will help you and your REALTOR® shop for the right home to fit your needs.

Learn More

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Checkpoint

Before shopping for your first home, take a look at our checklist to make sure you know what you’re looking for.

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Choose A Real Estate Agent
Once you know how much you can spend, it’s time to select a partner for your home buying process – a REALTOR®. It doesn’t cost anything – compensation comes from the commission paid by the seller of the house.

What To Expect From Your REALTOR®

A REALTOR® will:

  • Help you narrow your choices based on preferences and budget
  • Educate you on current market conditions
  • Handle preparation and submission of necessary forms when making an offer
  • Help you negotiate a price
  • Answer questions

REALTOR® Research Tips

  • Ask people you trust for recommendations.
  • Do some research! Many real estate websites have online reviews.
  • Find a REALTOR® who specializes in what you’re trying to accomplish.
  • Select a REALTOR® who is familiar with your area
  • Don’t be afraid to conduct an interview
Man with booklet
Make An Offer
Your REALTOR® will help you prepare your offer to the seller. The offer may be based on the selling prices of similar homes in the neighborhood and/or the condition of the home. You can strengthen your offer by attaching your pre-approval. This pre-approval can help determine an offer you can comfortably afford.
Woman with pad of paper

Your REALTOR® will help you prepare your offer to the seller. You can strengthen your offer by attaching your pre-approval.

Determine your offer on:

  • What you can comfortably afford based on pre-approval
  • Prices of similar homes in the same neighborhood
  • Condition of the home

Don't be surprised if you receive a counteroffer. Your REALTOR® will help you decide whether you can accept that offer, or if you want to make a new one.

Your Offer Is Accepted. Now What?

If you haven't provided verification of your income and assets in the pre-approval process, you will need to provide those documents to your lender. Also, be prepared for paperwork and questions.

Here is a full list of documents you will need to make the process go smoothly.

Time To Lock In Your Rate

If you decide to lock your interest rate, it means the rate won't change even if rates go up or down while you're waiting for your loan to be approved. If you think interest rates will go down, consider waiting to see if you can lock a lower rate.

Once you've made the decision, your lender will submit your application and financial information to a loan processor.

Rate Calculator

The Application Process

Here’s a checklist of what should be done while your application is being reviewed by your lender.

You need to:

  • Shop for homeowner’s insurance
  • Proof of insurance coverage is needed before your loan can close

Your lender will:

  • Schedule a home appraisal
  • Order title insurance

Your REALTOR® will:

  • Schedule a home inspection to reveal any defects and/or major repairs needed
  • Schedule a pest inspection

Your Loan Is Approved. What’s Next?

That’s great! Now it’s time for your closing, which is the transfer of the title of the house from the seller to you.

Who will be there? The following people may be present at closing: your REALTOR®, the seller, the seller’s REALTOR®, the closing officer and possibly the mortgage broker.

Clipboard with checkmark

The Closing Process

Two hands, exchanging keys

The Final Numbers

 

During the mortgage process, you will receive a GFE (Good Faith Estimate) within 3 days of your initial loan application.

On the day of closing, you will be required to wire any funds due (down payment, closing costs and pre-paid items) to the title company if they are greater than $10,000. If less than $10,000, you can bring a certified bank-issued check in lieu of a wire transfer.

How Long Does It Take To Close?

Typically, you can close within 30 days. However, with a special First-Time Homebuyer program, it may take 35 to 45 days to close.

What documents will I need to make the closing process go smoothly?

Below are the most common documents an underwriter will request for review. If a borrower’s work history is less than two years (such as a recent college graduate), or if the borrower is self-employed, there may be additional documents requested during the process.

  • Valid Picture ID (such as a state driver’s license)
  • 2 Recent Paystubs – must show year-to-date (YTD) earnings
  • W-2 (from past 2 years)
  • Federal Tax Returns - Including All Schedules (from past 2 years)
  • 2 Recent Months’ Bank Statements (including all pages)
  • 2 Recent IRA/401K Statements (if applicable)

Download Mortgage Checklist

Enjoy Your New Home!

 

Once the closing is completed, you’ll have all your mortgage documents and officially have ownership of the property. You’ll receive your keys and be able to begin the moving process.

For even more information on the mortgage process and owning a home, visit our Resource Center.

Learn More

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