Congratulations! You’ve decided to buy a house, one of the largest purchases you will ever make. It’s an exciting but potentially stressful process and TCU has many free resources including its Financial Empowerment Homebuying Guide to assist you through the process. Here are a few tips to get started.
First, determine your budget and estimate your ideal monthly mortgage payment. Determining the home you can afford goes beyond the list price. Assess your budget and familiarize yourself with the key factors that will help you get approved for a mortgage.
To estimate an affordable monthly mortgage payment, use the 28/36 rule, which states that a household should spend a maximum of 28 percent of its gross monthly income on total housing expenses and no more than 36 percent on total debt payments, including housing and other debts. Use TCU’s Mortgage Calculator to estimate a monthly payment suitable for you.
For more personalized advice and support in navigating the complexities of the homebuying process, don’t hesitate to contact a TCU Mortgage Professional for help.
The path to a new home starts with a pre-approval. Getting pre-approved for a mortgage helps you search for homes in your price range, shows real estate agents and sellers that you’re qualified for a mortgage — and lets you shop for a home with confidence knowing you have a firm commitment from a lender. Some sellers won’t even consider an offer from a buyer who hasn’t been pre-approved.
TCU makes it easy to get pre-approved online on any device. To get pre-approved, you’ll need to provide information about you and your co-borrower, if applicable. You’ll also be asked to provide details about your borrowing needs such as how much you’d like to borrow and your down payment amount.
It’s important to keep in mind that getting a mortgage is like buying a pair of shoes — one size does not fit all. When you’re comparing different types of mortgages, you should look at borrower requirements and how mortgage payments are structured.
Not all types of home loans will work for all buyers, so it’s helpful to talk to a TCU Mortgage Professional and learn more about the TCU mortgage loan products available to determine the best option. To get started, here are some things to consider.
The matter of fixed-rate versus adjustable-rate mortgages will come into play with nearly all types of mortgage programs. As the name suggests, a fixed-rate mortgage is one that maintains the same interest rate throughout the life of the loan and are designed for people who plan to stay in a home for a long period of time.
Although the most popular mortgage is the 30-year fixed-rate mortgage, it’s not your only choice. To save on interest, many go for a 15-year fixed-rate mortgage, since you’re paying on it for only half as long.
While a 15-year mortgage minimizes your total borrowing costs and allows you to eliminate your mortgage debt relatively quickly, a 30-year loan has lower monthly payments — allowing you to save for other goals and pay unexpected expenses. TCU’s 15 vs. 30 Year Mortgage Comparison Calculator is a great place to start weighing the pros and cons and can help you make the decision.
With an adjustable-rate mortgage (ARM) the interest rate will change after a period of time, and in some cases it may rise significantly. Yet over the short to medium term, ARMs can save borrowers a lot of money in interest rates.
And whether you’re thinking of buying a home, are in the process of applying for a mortgage, or already have a home loan, TCU Mortgage’s Resources Page can help you every step of the way.
If you’re ready to learn more about mortgages and have questions about the current market, TCU is here to help. Contact us today to discuss your situation with a TCU Mortgage Loan Professional.
This article is for educational purposes only and doesn’t constitute tax, legal or accounting advice. No material here is a recommendation to purchase or refinance a house or constitutes a loan approval. Please consult with an attorney or tax professional for guidance.