SURVIVING YOUR FIRST HOME PURCHASE

18 May 2009 5:30 p.m. Eastern
Credit Union National Association, Edited by Resa Hodnett

Buying your first home is a big step, but it doesn't have to be a scary one. The more you know about the home-buying process, the more confident you'll feel about making these important decisions that will shape your future. Here are some simple steps to follow in the home-buying process:

Get pre-qualified before you shop. A pre-qualification is a quick and no-cost analysis to ensure you have sufficient assets to purchase a house. Pre-qualification does not take into account your credit history. It is only a tool used to give an estimate of your purchasing power based on income and other debts. By being pre-qualified before you start shopping, you'll know in what price range to shop.

Shop with confidence. Hiring a real estate agent can be a big benefit. Real estate agents will discuss your housing preferences, create a shopping strategy, and bring insight about local market conditions. They also know lots of tips about the home-search process including purchase agreements and other forms needed in the process.

Get pre-approved before you make an offer. Credit is one of the main concerns that most homebuyers have. Although your credit history is an important part of your ability to qualify for a home loan many other factors are considered including down payment amount. In a pre-approval, the lender will formally assess your credit history, employment history, debts, gross income before taxes, and any property or assets you own through the underwriting process. The lender will then present you with a 'pre-approved' loan document, showing that you are not only serious about buying a house, but also have been pre-approved for financing.

Know what type of mortgage loan to choose. When selecting a product you should not only think about your current plans, but also your future plans: How long do you plan on living in the home? How long do you plan on staying in the area where you are purchasing? Your lender can explain the features of different mortgages (fixed- or adjustable-rate, for example) and help you decide which is best for your situation.

With PEFCU's easy online applications and loan calculators, all the information you need is at your fingertips. Visit us on the Web, call 800.627.3328 or 765.497.3328, or stop by a branch today for answers to your questions.