Getting Started in Homeownership

No matter what stage you’re in, homeownership can be stressful. That’s especially true in today’s market, which has been hampered by higher loan interest rates, low inventory and high-priced listings.

Whether you’re in the market for a new home or your first home, it’s easy to let yourself become intimidated by the prospect of homeownership. It doesn’t have to be scary. With a little knowledge and preparation, you can be prepared for the homebuying process.

“Homeownership is a strategic investment in your future, but doesn’t have to be a daunting venture,” said Angie Sprenger, Residential Loan Officer. “Even in today’s market, owning a home is an attainable goal that fosters stability, builds equity and unlocks a wealth of possibilities.”

Determine Your Homebuying Readiness

Before you even consider buying a home, it’s important to know how the homebuying process works. It starts with making sure you’re financially ready to make such a large purchase. Factors to consider include your total savings, total debt, and credit history. These factors will help determine your qualifying loan amount, interest rate, and how much you can afford as a down payment.

Speaking of down payments, the more you can pay up front, the lower your payments and the higher your equity. Typically, homebuyers try to put down 20%. This isn’t a requirement, but doing so could help reduce the interest rate on your mortgage. If you are able to pay 20% as a down payment, you won’t have to pay for private mortgage insurance, which will save you even more money. Luana Savings Bank also offers a 2nd mortgage option to avoid paying private mortgage insurance as well.

Once you determine you’re ready to buy a home, it’s a good idea to get pre-qualified for a mortgage. By getting pre-qualified, you will have a solid understanding of the amount of the home loan you qualify for, and it will eliminate that step when you are ready to make an offer.

Types of Loans

When you go through the pre-qualification process, talk to your mortgage loan officer about the different loan options available. A conventional loan is the most common type of mortgage and is generally available to buyers with good credit histories. There are also other loan options like adjustable rate mortgages.

Once you are pre-qualified and have an idea of what type of mortgage you need, it’s time to start home shopping. Be sure you stick to your budget as determined by the amount you were pre-qualified for. Look at as many houses as you can, to get a sense of the type of home you need.

Documents You’ll Need

Once you’re ready to apply for your mortgage or pre-qualification, you can make the process more efficient by having the following standard documents and information ready for your mortgage loan officer.

• W-2 forms from the past two years
• Pay stubs from the past 30 to 60 days
• Federal income tax returns from the past two years (if self-employed or have rental income)
• Bank statements from the last two months
• Driver’s license

Please check with us ahead of time in the event additional documents would be required due to any unique situations.

“Finding a new home may carry its share of stress, but it's equally a thrilling milestone,” said Angie Sprenger, Residential Loan Officer. “Being prepared for each stage of the homebuying process enables you to fully savor the excitement that comes with it."

More Information

Ready to achieve your goal of homeownership? Contact a Residential Loan Officer today at Luana Savings Bank by visiting www.luanasavingsbank.com/mortgages