Are you ready to buy your first home?
Homeownership brings many benefits. When you buy your first home, you'll become part of a community and experience the security of owning the roof over your head.
As a homeowner, you may also be able to:
- Take control: Avoid rent increases and cancelled leases while creating a home that meets your needs and tastes.
- Build home equity: Grow your assets with the principal portion of your mortgage payments and with potential property value increases.
- Take advantage of tax benefits: Deduct mortgage interest and real estate property taxes on your income tax returns. (Consult a tax advisor regarding the deductibility of interest.)
- Build your credit: Create a strong credit history by making on-time mortgage payments.
If you're looking to buy a home, let Union Plus help! The Union Plus Mortgage program offers exclusive benefits, like special hardship assistance when times get tough. Union members can also save $1000s when they use a Union Plus Real Estate Rewards agent to buy or sell a home.
What you can do to prepare to buy your first home
Create a financial plan
- Understand your credit needs and borrowing ability
- Know your credit history, assess your ability to make payments, and determine whether you can borrow using collateral such as the equity in your home
- Make a plan to get your credit in shape if necessary and establish a budget
- Check your credit history
- Compare your income and expenses
- Total the amount of your savings and other down payment sources
Estimate what you can spend
- Calculate your monthly payment. Use a payment calculator to estimate payments for various mortgage amounts and interest rates.
- The total amount you need is the sum of your down payment and your closing costs.
- If you have less than 20%, you will need private mortgage insurance (PMI) which protects the lender if a borrower stops paying the mortgage.
- Closing costs and prepaid expenses are also a necessary part of getting a mortgage.
Set a time frame
- Determine when you'd like to buy your home. Take into consideration your credit, cash flow, and savings.
Things to consider with homeownership
Homeownership is a serious and long-term commitment: financially, geographically, emotionally, and more. Give careful thought to these factors as well:
- Financial responsibility: You'll need to pay for utilities, maintenance, and repairs - on top of your mortgage payments, property taxes, and homeowners insurance.
- Potential risk: Real estate often increases in value over time, but not always. Your property value can also go down.
- Tighter ties: As a renter, you can pick up and move with short notice. When you own a home, selling it before moving on is more complicated.
Learn more about preparing for homeownership, and the mortgage benefits available to union members, by clicking here >>