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What You Need to Know to Buy a House in Today's Market 
Thinking of buying a new home? Mortgage rates remain low, but loan qualification requirements have tightened. Putting Your Finances in Order Before you go shopping for a home, figure out what you can afford to spend. You'll need to plan for your monthly mortgage payment and other monthly expenses, the down payment, closing costs, and cash reserves. Requirements are typically more strict today than during the housing boom. Know your credit score and what is in your credit report. Your credit report and credit score help determine if you qualify for a mortgage and the terms of the mortgage. You can get your credit report for free at annualcreditreport.com. You can also purchase your credit score at the same time. If your credit score has slipped, as many have in today's troubled economy, you can take steps to improve it before you start shopping for a mortgage. Have a down payment. The days of little to no down payment are gone. Borrowers now need to have a down payment of at least 3.5% of the purchase price. That's the requirement for an FHA loan. With an FHA loan, you can receive help for the down payment such as gifts from family members and down payment assistance programs Conventional loans typically have higher down payment requirements in the range of 10% to 20%. Have cash reserves. Do you have enough money set aside so that you can pay your monthly expenses, including the mortgage, for several months? Lenders will want to see that you have cash reserves. Get preapproved with DCU. Getting preapproved for a mortgage will let you know the maximum amount that DCU (or another lender) will loan you for a home. To get preapproved, you will need to apply for a mortgage. Make sure that you are getting preapproved, not just prequalified. "Prequalification" is typically an opinion of what you might be able to borrow for a home. Check out DCU's First-Time Homebuyer Program. DCU offers a first-time homebuyer program that helps you get into your first home with less cash up front. The program is an FHA loan that offers low down payments and low closing costs. Looking for the Right House Once you know what you can afford, you can start looking for a house that that meets your needs and budget. The StreetWise Homebuying Guide can help you through the process of finding and buying a home. Today's housing market offers great opportunities for qualified homebuyers who invest the time and diligence it takes to get the information needed to make wise decisions. |
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| Digital Federal Credit Union PO Box 9130 Marlborough, MA 01752-9130 508.263.6700 • 800.328.8797 • dcu.org • dcu@dcu.org TTY 800.395.5146 (For hearing impaired only) Have you had a good experience with DCU that you want to share with others? Send us an email at dcu@dcu.org or mail it to: DCU Attn: Marketing Dept. PO Box 9130 Marlborough, MA 01752-9130 |
For direct deposit: routing and transit # ABA 211391825 Editor: James Paquette To apply for a Home Equity Loan, Consumer Loan, or Mortgage anytime, call 508.263.6700 or 800.328.8797 (select 3) or visit dcu.org. For a complete listing of DCU's rates, visit our web site at dcu.org or stop by your nearest DCU branch.  Images may be from one or more of these sources: ©Thinkstock, ©iStock, ©Fotolia. ©2010 Digital Federal Credit Union. |