What Every First Time Homebuyer Should Know

If you’re thinking about buying your first home, you might have a lot of questions. That’s completely normal! Learn the knowledge you need to take your first steps towards becoming a homeowner.

Buying vs. Renting

Choosing to buy a home instead of renting comes with numerous benefits. When you pay interest on your home, you could qualify for a tax deduction, providing significant savings. Unlike renting, where you’re essentially helping someone else build equity, purchasing a home allows you to accumulate equity for yourself. Plus, becoming a homeowner gives you a sense of pride and achievement!

Your Budget

While determining your budget, consider speaking with a loan officer. They’ll sit down with you, talk about your options, assist you in filling out an application, and review your income and credit history. This way, you’ll quickly know which homes fit your budget. Without a clear budget in mind, you might end up really liking a home that costs more than you can afford.

Mortgage Payments

You might be wondering what is included in a mortgage payment. Your monthly mortgage payment has two main parts:

1. Principal: This is the money that goes toward paying off the actual loan amount.
2. Interest: Interest is the cost of borrowing money and is also part of your monthly payment.

In addition to these, your payment might also include:

• Escrow for real estate taxes: This is money set aside each month to cover your property taxes, which you pay once a year.

Consult your tax advisor

• Escrow for homeowners insurance: You save money each month to pay your home insurance, which you typically pay once a year.
• Private mortgage insurance (PMI): If you’re buying a home with less than a 20% down payment, you might need PMI to protect your lender.

Interest Rate Programs

As a first-time homebuyer, there are special interest rate programs that can make it more affordable. These include:

• Home Turf Assistance Program: If you never thought it was possible to own a home, you could benefit from this program.
• US Federal Housing Administration (FHA): This is a good option for first-time homebuyers because it requires a small down payment and offers a competitive interest rate.
  Be sure to talk with a loan officer to find out which programs you qualify for and which one is best fit for you.

Helpful Tips

1. Pick a home within your budget
   Remember, when you’re buying your first home, pick something that fits within your budget. Just because you’re approved for a certain amount, doesn’t mean you have to borrow it all. Taking on too much debt can cause unexpected financial strain.
   
   
2. Start an emergency fund
   It’s important to have some extra money saved for unexpected repairs, like fixing your water heater or roof.
   
   
3. Download the ‘You’re Home’ App
   Download the ‘You’re Home’ App to make your mortgage process simple and hassle-free!

When you’re ready, visit any Bank Central location to talk to a loan officer. Good luck finding your home!