Preparing to buy a new house can be one of the most exciting times in your life. It can also be stressful, especially if it’s your first time and you’re unfamiliar with the process. Knowing as much as possible can help alleviate anxiety as you navigate the ins and outs of learning how to get ready to buy a house, applying for a mortgage, closing escrow and moving into your new home.
Read on to learn more about obtaining a mortgage and how to prepare to buy a house.
1. Budget Accordingly
When you’re getting ready to buy a house, it’s important to determine how much home you can afford. The truth is, there’s a lot more than just the monthly cost of your loan. In addition to paying your mortgage, don’t forget to factor in property taxes, utilities, repairs and maintenance, and Personal Mortgage Insurance (PMI) if you’re putting less than 20% down.
No idea what your total monthly payments might end up being? Take advantage of Island Federal’s Mortgage Calculator to run some numbers and determine your “all-in” monthly costs for your new home. Once you have a budget in mind, you can begin seriously looking for homes in your price range.
2. Get Your Credit Score Up!
Your credit score is one of the biggest factors that will determine your mortgage interest rate. Did you know a lower rate can save you over $100,000 over the life of your mortgage loan? To learn real, effective ways you can quickly improve your credit score, watch our Financial Literacy Videos or talk to a Member Service Representative at Island Federal today.
Having a good credit score is important on many fronts. It can not only help you get a reasonable interest rate on your mortgage loan, it can also result in raised credit limits, lower rates on personal and auto loans, and an improved debt-to-income ratio, which means additional future financing can be easier to get. Check out some tips to help improve your credit score.
3. Look for Local Grants and Funding Programs
Long Island can be an expensive place to live. To help keep young people here on the island, there are local and regional home buying grants and programs that can save home buyers thousands. Some of these programs have stipulations in terms of how long you need to live in the house, what your income levels are, and other factors. But for the right situation, it can be well-worth seeking out some assistance programs to help you pay for your new home.
If you’re preparing to buy a home, search around, talk to your local real estate agent, and read the fine print to select a program that might make sense for you.
4. First Time Home Buyer Programs
Often lenders have competitive first-time home buyer programs aimed at helping people as they figure out how to prepare to buy a house. Island Federal offers several mortgage programs that can alleviate some of the upfront costs for those buying their first home.
5. New York Star Tax benefits
New York State offers the “School Tax Relief Program.” If your combined household income is below $500,000 a year (as of 2022) and the home you’re applying for is your primary residence, you might be eligible to receive a check each year to help you cover the cost of your local school taxes. Enrollment is not automatic, though, so go to tax.ny.gov/star to learn more and enroll today.
Let Island Federal Help
If you’re looking for help and guidance regarding how to prepare for buying a house, Island Federal is there for you. Our resources have helped thousands of first-time home buyers achieve their goal of becoming homeowners. The process can seem daunting, but when you’re preparing to buy a home, having someone on your team who knows what it takes to get the job done can be priceless.
For anyone getting ready to buy a house for the first time, it’s definitely worth it to take the time to seek out any and all the financial resources they can. Doing your homework can save you a bundle, in some cases up to tens of thousands of dollars (or more!) over the life of your loan.
Reach out to Island Federal to learn more. We’re here to help you make your dreams of home ownership a reality.