Tips that Make for a Smooth Journey to Home Ownership
Whether it’s your first home purchase, or a comfortable “golden years” pad to enjoy hosting extended family in, buying your dream home is truly an exciting time.
While it is an incredibly exciting time, it can also be a stressful time. That’s because for many people, a mortgage loan is the single most expensive financial investment they will make in their lifetime. In addition, with all the legal jargon and paperwork, the home-buying process may seem quite daunting. Plus, with thousands of mortgage lenders to choose from, the deciding which one to work with can add to stress.
SDCCU is here to help ease the process. As San Diego’s largest locally-owned financial institution, SDCCU offers competitive and robust home loan programs. Customers experience competitive rates on mortgage products, a dedicated real estate certified expert and a philosophy that people come first and profits second. Voted Best Mortgage Provider six years in a row by the San Diego Union-Tribune Readers Poll, you can rest assured that you will receive outstanding support by local lenders who truly understand the market.
So, if you are thinking about purchasing a home or even refinancing an existing mortgage, SDCCU is happy to assist you from start to finish. Here are a few tips we hope will help get you started!
Check your credit
Since a mortgage loan might be the largest investment decision you will make in your lifetime, it is critical to ensure your credit will play a positive role in your approval process. If you have an active loan at SDCCU, you can see your FICO® score in Internet Branch online banking. Also, you can find access to your free credit report at sdccu.com/knowledge. Review your credit history to make sure there are no discrepancies. Should you discover any errors on your report, be sure to contact the credit bureau immediately to begin the corrective process. The process doesn’t have to be too complicated and correcting inaccuracies on your credit report can make a significant impact on your score.
Another opportunity to improve your credit score is to allow yourself adequate time to pay down existing credit balances, which may improve your overall score and thus, give you an opportunity to receive more favorable loan terms.
First step in home ownership begins long before purchase!
Home mortgage loans can require a sizeable down payment, so it is recommended to begin saving early in order to have the necessary funds available. Down payments on a home purchase can range from 3-20% of the overall loan amount. Consider leveraging assets such as your employer-sponsored 401(k) retirement plan; many allow first-time home owners to borrow against an existing retirement plan for the purpose of buying a home.
Another significant cost to consider are the closing costs, which are the costs associated with the mortgage itself, including but not limited to application fees, processing fees and title transfer fees. SDCCU offers a No Closing Costs 5/5 Adjustable Rate Mortgage¹ that allows borrowers to pay $0 closing costs and put as little as 10 percent down with SDCCU paying 100 percent of the mortgage insurance (90 percent Loan-To-Value). Be sure to prepare for your closing costs so you are not surprised during your loan closing. Review some savings tips to help you get that down payment in the bank quicker.
Apply for a pre-approval
How do you know what home you should be looking for? Start with SDCCU’s mortgage calculator to get a feel for what you can afford and then apply for a pre-approval.
Finding a home
After obtaining your pre-approval, the next typical step is to find a reliable real estate agent that adds value to your home search. Ask for referrals from your friends and family. Real estate agents often specialize in a particular part of town, so also consider what neighborhoods you want to live in and match that with agents who specialize in home sales in those neighborhoods. SDCCU can help pair you with an agent plus a 20% rebate on their commission.
Determine what type of property you want beforehand. Creating a detailed checklist of your negotiables and non-negotiables will make the selection process more manageable for you and your agent. Once you think you’ve found “your” home, visit the property more than once. Seeing a new home you are interested in at different times of the day will allow you to see multiple factors like traffic, noise variations, etc. Be sure it’s the home that you absolutely want before you buy.
This may be the biggest purchase you make during your lifetime, which is why we encourage you to be as prepared as possible for the process. SDCCU’s extensive history has helped us understand the depths of this decision-making, which is why it is our priority to help make the mortgage lending decision as easy as possible for our customers—and why we have been voted BEST Mortgage Provider for six years in a row in the San Diego Union-Tribune Readers Poll.
Ready to start a home loan application?
¹Offer available for owner occupied primary residential purchases and external refinance only. Subject to approval. SDCCU will pay your closing costs including but not limited to: lender’s title insurance, title services, appraisal, tax service, credit report, flood certification and recording fees. Paid closing costs do not include pre-paid interest, homeowners insurance, initial escrow deposit, owner’s title insurance, or city and/or county transfer tax. Borrower may select escrow and/or title company. Other restrictions may apply. There is an upfront $350 application fee that is non-refundable if your loan is denied or canceled. Reimbursement of closing costs: If the loan is paid off within 36 months of origination, a prorated amount of closing costs will be added to the loan payoff amount.