Life Events - Buying a Home

Buying a home is a big decision and an even bigger investment. It takes a lot of hard work and understanding, but it’s a smart — and satisfying — choice. Careful planning before you take the plunge into homeownership will help ensure that you’ve made all the right decisions.

Whether you decide on a fixed rate or adjustable mortgage, our rates are tough to beat. We have Real Estate Loan Representatives who will assist you every step of the way. Be sure to look at our handy amortization calculator, loan comparison calculator, and mortgage glossary for even more help.

The Road to Homeownership - Let BalanceTrack help you understand the process of buying your dream home.

Rent Vs. Buy:

Whether to buy a house or to continue renting is a decision that requires a lot of thought – and it mostly comes down to the money involved. However, there are a few questions you can ask yourself to help you come to the right conclusion.

1. Can you afford to buy?
   Being able to afford a house means that you’ve saved enough money to make a proper down payment and that your monthly income can cover your mortgage payments based on the interest rate you qualify for.  Using the Rent Vs. Buy calculator can help you figure this out.
2. What are the true costs?
   Buying a house isn’t just about the mortgage amount. You’ll also need to consider other costs such as property taxes, agent fees, maintenance and renovation costs, insurance, home owners association fees and so on. On the other hand, a house is a long-term investment, and the resulting tax breaks and equity may make buying a better choice.
3. Is this a buyer’s market? Homes can be bought at any time, but there are certainly periods that are better than others for house hunting. Low interest rates and low (but stable or rising) home prices are good signs that it’s the right time to buy.
   
   Consider also if you will be able to buy the house you really want. If you have to significantly downgrade your space, or increase your monthly living costs, perhaps renting is the better choice for the time being.
4. Where do you truly want to be?
   Where you live is just as important a consideration as what you can afford. If your budget requires you to buy a home in the suburbs, but you prefer the city, you’ll need to consider the cost of commuting (both financially and mentally), and decide if a smaller place in a central location is more fitting. Or if you want to live farther from the city, but don’t want to deal with lawn care and landscaping, perhaps a condo is right for you.
   
   Each buyer needs to carefully identify and consider his or her own individual needs. Because if you don’t like where you’ll live, there’s almost no point in buying it.

How much can you afford?

This is a somewhat complicated question, which can be boiled down to the following: what you can afford is a matter of how much you make and how much of that you spend. To help calculate this, you’ll need to take your net income and subtract from it all of your monthly expenses including the added costs of owning a home (taxes, maintenance, insurance, etc.). Use this number to help you figure out a reasonable monthly payment within your budget. Then use our mortgage calculators to get a better idea of how much house you can afford.

Remember, your final mortgage costs will be a combination of the price of the house, the closing fees, the loan terms and your interest rate — all of which can vary.

Use the “How much house can I afford?” calculator to help figure out some more solid numbers.

The Home Buying Process

Buying a home takes patience, but homeownership is very rewarding. Essentially, there are five steps to the process.

1. Get Pre-Approved.
   Talk with us! The amount you’ve saved for a down payment, plus what you’ve calculated as your comfortable monthly payment and the interest rate you qualify for will determine how much house you can afford. Having this information means that you’ll know exactly which houses are in your budget and which aren’t worth viewing. It will also get a lot of paperwork out of the way beforehand, so you can make an offer quickly and easily. Our Real Estate Loan Representatives are standing by to help.
2. Find Your Dream Home.
   Get out there and start looking! Searching for a home is fun and exciting. Think about the area, the distance from the places you go most often (work, school, family and friends), the school systems, etc. And remember that even if a house you like isn’t perfect, a little TLC might get it there some day.
3. Make Your Offer.
   Either on your own, or with the help of your realtor, consider the condition of the house, recent comparable sales in the area and your budget. Also consider if it’s currently a buyer’s or seller’s market. Use these factors to determine your offering price. And remember, if the house has a lot of interest, your offer should be enticing, as you may not get a second chance.
4. Inspect The Home.
   If your offer is accepted, your contract will likely allow you to have the home inspected before the sale closes. Hire a licensed inspector to thoroughly check for potential problems that the sellers may not have known about or disclosed.
5. Seal The Deal.
   Get your pen ready because it’s time to sign some paperwork – okay, a lot of paperwork. At this point, you’ll also need to pay any third-party or lender costs. But once the deal is done, those keys are yours and you can move in!
6. Insure your Home.
   Protect your big investment. Our insurance specialists at CUNA can help you find the coverage you need.

Refinancing

Homeowners tend to refinance either because interest rates are now lower than the rate of their current loan and they wish to lower their monthly payments, or because there is a positive difference between what they owe and the value of the house and they’d like to take out that money in cash. Either way, refinancing your home essentially means taking out a new loan to pay off the old one.

Refinancing for the second reason is called a “cash-out” refinance and is typically limited to 75-80% of your home’s current appraised value. This is often used as a method for consolidating other high-interest debt (such as credit cards or car loans), or for freeing up cash to make renovations or repairs on the house. Alternatively, a “no-cash-out” refinance can be up to 95% of the home’s value, but is assumed to be covering only the amount you still owe on the house.

You can check out our rates here.

HELOCs

Instead of refinancing, homeowners can also tap into their home’s equity for access to cash. Simply, equity is the difference between what you owe on your loan and what your home is worth. And a Home Equity Line of Credit is a revolving line of credit (up to a certain amount) borrowed from that equity and paid back at a variable interest rate. You can use the money from a HELOC for whatever you please, from home remodels and repairs, debt consolidation, paying for education or a wedding, to even just treating yourself.

You can check out our rates here.

Additional Resources

• Payment Cancellation Protection - Help safeguard your loan with MEMBER'S CHOICE™ Borrower Security.
• Loan Comparison Calculator - View a comparison of monthly payments based on the loan amount and a range of rates
• Mortgage Glossary - Find definitions for some basic mortgage terminology.

For more information or to apply for a loan, please contact our Real Estate Department at: (415) 359-2977 or by e-mail at realestate@sanfranciscofcu.com.

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