Before you begin your loan search, take some time to gather and organize essential documents. Having all the information listed below in one place will streamline the next steps.

Here's what you'll need:

• Full name, current address, and social security number
• Names and work numbers of employers for the past two years
• Monthly income for you and your co-borrower, including bonuses, commissions, and overtime (use the most recent pay stub(s) with year-to-date income, which should reflect on your tax return)

If you're self-employed, gather the last two years' tax returns for your business type (Sole Proprietorship - Schedule C, Partnership - Form 1065, or Corporation - Form 1120 or 1120S). Additionally, collect the last two years' personal tax returns, including K-1s.

Documentation supporting any credit history issues such as late payments, bankruptcy (petition and discharge papers), defaults, judgments, or liens.

As part of the closing process, we'll need to verify all funds received. Be sure to gather any documents that confirm the proof of receipt or deposit for funds, such as gifts or trust accounts.
 

Once you have a good sense of what you can comfortably afford on a monthly basis, it’s time to look at your savings and determine how much you can afford for a down payment.
 

1. Start by gathering your savings and investment statements and adding up your total available funds. 
2. Decide how much you want to set aside for other savings goals, moving costs, and any renovations for your new home. Subtract these amounts.
3. Now, subtract an additional amount for an emergency cushion. A good rule of thumb is at least three to six months' worth of expenses.
4. The result is your maximum available cash at closing — how much you can contribute out of pocket at the time you close on your loan for both your down payment and closing costs.
5. Now estimate your closing costs. These are costs that come along with finalizing your loan and home purchase in addition to your down payment, such as lender, title and appraisal fees. Closing costs depend on a lot of things, such as the price of the home you buy, your down payment amount, the lender costs, the kind of loan you choose, and the location of your new home. Typically, they range from 2-5% of the home purchase price. For now, make a rough estimate by using a home price that is typical for the neighborhoods you’d like to live in. As you get further along in the mortgage and home buying process, you can come back and refine your estimate.
6. Finally, determine your maximum down payment by subtracting your closing costs estimate (step 5) from your total available cash for closing (step 4).

Keep in mind: 

• Your down payment amount affects the type of loan you can get, your interest rate, and your loan costs. In general, the higher your down payment, the less your loan is likely to cost. You can often save money if you put down at least 10 percent of the home price, and you’ll save the most if you put down at least 20 percent.
• When a lender decides the interest rate and loan costs to offer you, they typically look at your down payment in increments of 5 percent. There are usually no savings for putting down “almost” the required amount. For example, if you have enough saved for a down payment of, say, 8 percent of your target home price, think about whether you could save up a little more before buying or choose a slightly cheaper home so you can hit the 10 percent mark. If you’re unsure about what to do, consider talking to a HUD-certified housing counselor.
• Low- or no-down payment options may be available to you. For example, Frontwave’s First-Time Homebuyer Program allows qualified buyers to put as little as 3% down. Our VA Loans and No Down Payment Mortgage offer 100% financing with no down payment required for qualified buyers. 
• When deciding how much money to put down, keep in mind that once you put money into your home, it’s not easy to get it back out again. If you need the money for another major expense, like paying for college or medical expenses, you may find that there is no way for you to access this money. While home equity loans or lines of credit allow homeowners to borrow against their equity, you usually need to have owned your home for several years and built up significant equity in order to qualify. Borrowing against your equity also isn’t free — you pay interest on the loan.
• It’s also a good idea to set aside some money to cover initial home expenses. New homeowners often find things that need fixing, or discover that they need an extra piece of furniture or two to make the new home work for their family. Moving expenses and utility set-up fees can also add up. When thinking about how much you can afford for a down payment, make sure to set aside some money to cover these expenses.
• At this stage, none of the numbers you are working with are precise, so try to give yourself a cushion in your estimates. That way if your costs turn out to be higher than expected, you’re not left scrambling for money. Also, when considering how much savings you have available for your down payment, don’t forget your retirement and other savings goals.

Speak to one of our loan representatives for other available loan options. At Frontwave Credit Union, we're committed to helping you achieve your dreams!
 

Once you know your estimated down payment amount, one of your credit scores, and a few other details, you can start to figure out what interest rate you might expect to pay for a mortgage. This lets you get a realistic estimate of the home price range that you can comfortably afford. 

1. Explore the range of interest rates you can expect, based on your information. Check out our rates to help you determine an affordable home price that works for you.
2. Figure out how much you can afford for monthly principal and interest. The loan amount you can afford depends on how much you can afford to pay back each month. Keep in mind, your total monthly home payment includes several costs of homeownership. Your principal and interest payment is just part of your total monthly payment that pays back your loan and is used to calculate your affordable loan amount. Make sure you understand the difference.
3. Estimate how much you expect to pay monthly in property taxes and homeowner’s insurance. Browsing for sale listings or talking with family, friends, or a real estate agent in your area is a good way to get a rough estimate.
4. Subtract your estimated taxes and insurance from your target total monthly home payment to get the amount you can afford to pay monthly for principal and interest.
5. Calculate your affordable loan amount using our handy mortgage calculator. Start with a ballpark estimate for the loan amount, and see whether the resulting principal and interest payment is more or less than the amount you can afford. Adjust the loan amount up or down until you find the loan amount that corresponds to your affordable principal and interest payment.
6. Estimate your affordable home price by adding your down payment amount to your calculated loan amount.

Keep in mind:

• Your home price estimate is not set in stone. Think about your home price estimate as a good starting place for deciding how much you can comfortably afford. You had to make some assumptions to get here. As you move forward and gather more information, you can go back and refine those assumptions. Try out different scenarios, such as different down payment amounts, and make adjustments.
• Your down payment amount affects how much you can afford. If your down payment amount is less than 20% of your target home price, you will likely need to pay for mortgage insurance (unless you qualify for a VA loan).  Mortgage insurance adds to your monthly costs. So you may need to reduce your target home price accordingly.
• Most mortgage calculators (including ours) start by showing you a standard 30-year fixed-rate loan. This is fine for estimating your home price at this stage. In the Explore loan choices phase, you'll learn more about different options for your loan and how to get the best overall deal for you.
• The home price you can afford depends on four key factors — how much you can pay monthly, how much you can pay up front in a down payment, the loan type (30-year fixed, 15-year adjustable, etc.), and the interest rate. Change any one of these four factors and you may be able to afford a more expensive or less expensive home.

Pre-Qualified

Getting pre-qualified is like getting an estimate from a mortgage institution detailing how much of a loan you can likely afford. It serves more as a guide to you of what a lender might require rather than as any official approval by them.

Pre-Approved

Pre-approval means that you fill out a loan application and provide all your income and credit information. The lender then checks your assets and pre-approves your capability to get a loan.

1. Start by narrowing down your search to areas where houses are within your price range. There are many ways to find them! You can work with a qualified real estate agent, check the real estate section of the newspaper, or search online at various real estate sites.
2. Consider what you want out of your neighborhood. You can easily find demographic, employment, and community information online on the same sites where you'll search for a home.
3. Drive through the neighborhoods you've chosen. Start with your top two and drive to your place of work, both in the morning and evening. How long is the commute? Is the time commitment reasonable? Are there alternative forms of transportation, like buses or trains, that you could use?
4. Visit the neighborhood you've chosen. Drive there at different times of the day and at night (especially late night if you're a light sleeper) to check traffic and noise levels. Listen for airplane noise, foot and train traffic, and car traffic. Be sure to check for nearby businesses that might be open at night that you wouldn't notice during the day, like dance clubs or late-night restaurants.
5. It's essential to think about your chances of staying in your current job for the length of time you'll be living in the house. If there's a possibility of changing work locations, you won't want to pick a house just because it's near your current job.

At Frontwave Credit Union, we're here to partner with you in your journey towards financial success. We understand that the process of buying a home can be complex, so let us help you make informed decisions. 
 

Where your children go to school can have a significant impact on their future. And, regardless of whether you have school-aged children in your home, living in a good school district can help with resale value down the road.  Before you start house hunting, consider gathering information about school districts in the neighborhoods you’re considering to help you make an informed decision.

Here are some key questions to consider:
 

• How do students perform on statewide and national tests?
• What percentage of students pursue higher education?
• Which colleges do graduates typically attend?
• What challenges do the schools in this area face?
• How prevalent are drug use and incidents of violence?
• What is the policy regarding weapons in schools? (Zero tolerance is ideal.)
• What is the student-to-teacher ratio?
• What opportunities are available for art, music, drama, and sports?
• Are the school facilities up-to-date or in need of renovations?
• What is the student-to-computer ratio?
• At what grade level do they begin teaching computer skills?
• How comprehensive is their language program?

Remember, your commitment to your children's education is commendable. By asking the right questions and taking an active role in their schooling, you're setting them up for a successful future.
 

We are committed to helping our members achieve their financial goals, and that includes finding a home that meets all of their needs. One important factor that often gets overlooked in the home-buying process is the convenience of access to essentials like grocery stores, healthcare and emergency services. Let us help you find the perfect home that not only meets your financial needs but also provides the convenience and support you deserve by following these steps:

1. Look at the local Chamber of Commerce website to get a feeling for the type of community you'll be joining.
2. Take a drive around the adjoining shopping areas and take notes on what you find. Will you have easy access to:
   • Grocery stores
   • Dry cleaners
   • Doctors
   • Hospital
   • Fire station
   • Police station
   • Dentists
   • Place of worship
   • Restaurants

1. Tax Rates. Check with your real estate agent about tax rates for your area.
2. Neighborhoods. Many neighborhoods may have covenants you will be required to follow. Here are some examples:
   • How may outbuildings you can have and/or build
   • House paint color guidelines
   • Maximum number of pets allowed
3. Crime rates. You want your family and your possessions to be safe, so be sure to check out the rate of personal and property crime in your area. Call the local police department and talk to the Public Information Officer.
4. Zoning. How is your new neighborhood zoned? Could you wake up one morning with an office building going up across the street? Ask your real estate agent or check with the local library for help in identifying any zoning issues.
5. Natural Hazards. Research natural hazards that may or may not be obvious. Is your neighborhood of choice:
   • On a flood plain
   • In a weather conversion zone
   • Over an earthquake fault
   • In a wetland area
   • In a potential wildfire zone
   • Near a:
     • Contamination site
     • Solid waste landfill
     • Leaking underground storage tanks

To check out these hazards and more, you may want to pay for a risk report.
 

When it comes to buying a home, it's important to know what you want. So, grab a pen and paper and start making a list! 

Think about what you want outside of your home. Do you want a big yard for your kids to play in? A garage to store your car and tools? Or maybe you're a gardening enthusiast and want to create your own oasis. Inside your home, consider how many bedrooms and bathrooms you need, not just for now, but for the future. And don't forget about a den or office, a guest room, or any other must-haves on your list. 

Once you have a clear idea of what you want, Our home loan consultants can help you find the perfect home.

 

Buyer's fees typically include:

• Credit Report: Determines your credit rating by an independent credit association.
• Appraisal: Establishes the value of the house by an independent appraiser.
• Inspection: Provides information about the house's integrity by an independent home inspector (not always required by the lender).
• Title: Discloses any liens and encumbrances.
• Recording Fees: Records property transfer with the County Recorders Office.
• Courier Fees: Transports documents between the escrow service and various entities.
• Loan Origination Fee: Imposed by the lender to cover processing expenses for making a real estate loan.
• Discount Points: Prepaid finance charges tied to an interest rate (higher rate = lower discount points).
• Escrow Services

Seller's fees typically include:

• Escrow Services (seller's portion)
• Title Insurance (based on purchase price)
• Transfer Tax fee (if applicable)
• Recording fee
• Real estate commissions

All mortgage loans include some costs that you pay upfront, at the time of closing, and some you pay over time, in your monthly payment. You have some choices for how much you pay, and when.

For example:

• If you want to lower your interest rate, and therefore your monthly payment, you can pay points. Points, also known as discount points, are money you pay upfront to your lender in exchange for a lower interest rate. In general, 1 point is equal to 1% of the loan amount. Points increase your closing costs.
• If you want to reduce your closing costs, you can ask to receive lender credits. Lender credits are money you receive from the lender to offset your closing costs. You agree to pay a higher interest rate, and therefore a higher monthly payment, in exchange for an upfront rebate that is applied to your closing costs.
• You can also choose neither to pay points nor to receive lender credits. This means you’ll pay all of your closing costs out-of-pocket up front, and get an unadjusted interest rate.

Keep in mind:
 

• What’s right for you depends on your situation, how long you expect to be in the home, how much cash you have available for closing, and a lender's specific rates. 
• You may be able to shop separately for some of your closing costs. Some lenders allow you to shop for certain closing services, such as the title search and title insurance. Comparison shopping for those services can help you save money.
• The Annual Percentage Rate (APR) is a helpful tool for comparing loan options with different interest rates and fees. It takes into account both the interest rate and fees, so you can see which loan is less expensive over the full loan term. 
• You may see a "no closing cost loan" advertised, but that doesn't mean the closing costs are free. In most cases, those costs are either rolled into the loan or the interest rate - meaning you’ll pay more interest over the life of the loan. Still, these loans may be a choice if you’re short on cash for closing.
• Sometimes, the seller may be willing to pay some or all of your closing costs – for example, if you’ve agreed to pay more for the home or if the home needs lots of repairs.