PDF BUYING YOUR FIRST HOME - FORUM Credit Union

BUYING YOUR FIRST HOME

Finding the home of your dreams is the tough part, the mortgage process shouldn't be. That's why we've created a guide to make your first-time home buying experience easier.

This homebuyer guide will help you: n Identify the "perfect home" n Understand the costs associated with homeownership n Select a REALTOR? n Weigh your financial options n Prepare for closing

Talk To Us

To apply for a mortgage or get answers to questions, call our Mortgage Specialists at 317.558.6160 or 866.367.8600 or email us at forummortgage@.

FORUM NMLS #469848

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BUYING VS. RENTING

The first step is to consider whether buying a home or renting makes better sense for you.

Reasons To Buy

Reasons To Rent

Equity: Each time you make a payment, you're one Flexibility: Unsure of your career and income?

step closer to paying off your home.

Renting gives you time to figure things out, without

being tied to a mortgage.

Tax Deductions: You can deduct mortgage interest

and property taxes. Consult a tax advisor for your No Maintenance: Pipe leaking? Don't worry about

situation.

going to your local hardware store. Simply call the

landlord to have it repaired.

Control: When you own a home, you select your

own contractor for repairs. When it comes to

Bad Credit: If you have bad credit, having a history

creativity, you can paint the walls any color you

of making on-time rental payments can help you

would like, and even add a room.

qualify for a mortgage down the road.

Value: Your home could increase in value, making it Utilities Included: Sometimes utilities like water,

worth more than you paid for it.

sewer, and garbage are all paid by the landlord

when you rent.

Financial Predictability: Fixed-rate mortgages

allow you to predict your monthly principal and

interest payment, unlike monthly rent payments,

which can increase over time.

See Appendix A for fees associated with buying a home.

Still interested in owning a home? Let's look at building vs. buying a home.

Talk To Us

To apply for a mortgage or get answers to questions, call our Mortgage Specialists at 317.558.6160 or 866.367.8600 or email us at forummortgage@.

FORUM NMLS #469848

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BUILDING VS. BUYING

What are your house plans? Here are some things to consider when it comes to building vs. buying a home.

Reasons To Build

Customization: The primary advantage to building a new home is that it can be built to your specifications.

Reasons To Buy

Negotiation: Buyers often have more room for negotiating a price, something that is rare when building a home.

New Materials: A new home will have new wiring, new plumbing, and will be up-to-spec with building codes. They are also more energy-efficient than older homes.

Costs: Although purchasing a home may be less expensive upfront, once you include renovations, maintenance, and upgrades, it could be more expensive than building.

Move-In Ready: In many cases, homes come with appliances, and even have other features such as fences and landscaping.

Shorter Process: Buying can be less stressful than building, and often takes only 4-6 weeks. Building a home could range from four months to over a year, and many things can go wrong during the construction process.

Still interested in buying a home? Let's talk about knowing what you can afford.

Talk To Us

To apply for a mortgage or get answers to questions, call our Mortgage Specialists at 317.558.6160 or 866.367.8600 or email us at forummortgage@.

FORUM NMLS #469848

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THE PERFECT PAYMENT

Your total monthly mortgage payment should be less than 30% of your gross monthly income. Depending on your income, credit scores, down payment, and any outstanding monthly debts that figure may go higher. It is important you feel comfortable paying this amount each month.

A monthly mortgage payment consists of the following: n Principal & Interest n Property Taxes n Homeowners Insurance n PMI (Private Mortgage Insurance) ? if applicable

Considering the Extras

It's important to make sure you'll be able to afford other expenses associated with your home. Estimate the following costs (if applicable): n Mortgage Insurance n County Taxes n Condo Fees n Homeowners Association (HOA) Dues n Utilities and Fees n Exterior and Interior Home Repairs n Maintenance (annual checks for water heater, heat pump, chimney, gutter, etc.)

See Appendix B for a list of expenses associated with owning a home.

Down Payment Options

Depending on your credit scores, your down payment can be as low as 3% of the purchase price of the home (Ex. $150,000 Purchase Price = $4,500). Acceptable sources of down payment money can come from your bank account, investment accounts, 401K, or even a gift from a family member.

See your mortgage consultant for details.

Talk To Us

To apply for a mortgage or get answers to questions, call our Mortgage Specialists at 317.558.6160 or 866.367.8600 or email us at forummortgage@.

FORUM NMLS #469848

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Private Mortgage Insurance

Your lender will require you to get mortgage insurance if your down payment is less than 20% of the appraised value or sale price of your home. A mortgage insurance policy protects your lender in case you default on the payments. As a borrower, you pay the premiums, and the lender is the beneficiary.

See your mortgage consultant for details.

Mortgage Pre-Approval

Once you're sure you want a house, it's time to find out how much you can actually spend. The best way to do this is to get pre-approved for a mortgage. We offer fast and free pre-approvals that will help you and your REALTOR? shop for the right home to fit your needs.

See Appendix C for information you should know before applying for a mortgage.

Talk To Us

To apply for a mortgage or get answers to questions, call our Mortgage Specialists at 317.558.6160 or 866.367.8600 or email us at forummortgage@.

FORUM NMLS #469848

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