Looking to Buy Your First Home? Here’s Where to Start

Buying a home is one of the biggest decisions you’ll ever make. However, don’t let that scare you. While purchasing a home is a big deal that will ultimately help shape your future, it’s also an excellent investment. The value of most homes increases over time and may come along with helpful tax benefits too. As a potential new homeowner, there’s a lot to learn about the home buying process and we’re here to help! Here are some useful tips for first-time home buyers.

Figure out what you can afford

Before you start house hunting, you’ll need to know what your budget is. Our loan officers can help you determine a price range through a pre-qualification process, which involves using financial information to get an estimate of the maximum mortgage you should be able to obtain. As a rule of thumb, we recommend your monthly house payment be about 30% of your total monthly gross income. Our mortgage calculator can also help you determine your monthly payments as you plan out your budget.

Make a wish list for your dream home

Now, this is the fun part! Before creating a home wish list, ask yourself, “Where do I see myself in the next 5 to 10 years or longer?” Having a vision for you and your family will help put the details of your dream home into perspective. With this in mind, you’ll need to figure out the must-haves of your ideal home, including backyard requirements, size of the home, and neighborhood. All of these factors will have an impact on the overall cost of your home and whether or not it fits your budget.

Find the right mortgage

Many lenders offer a variety of home financing options to choose from. The type of mortgage you end up using will affect what you’ll need to qualify for the loan, and how you’ll pay it back. That’s why it’s important to understand your options before making a decision.

Here are the main types of mortgages that are out there:

  • Conventional: This mortgage is a typical home loan contract between the lender and the borrower, at the lender’s risk. The borrower’s property is security, which means the lender can take your home for non-payment of the mortgage. Conventional mortgages are the most common type of mortgage loan (averaging about three quarters of U.S. mortgages).
  • FHA (Federal Housing Administration): The FHA will insure the loan for the lender against loss, in case the buyer cannot make payments. This mortgage requires the buyer to carry mortgage insurance through the FHA.
  • VA (Veterans Administration): These home loans are backed by the federal government and offered by private lenders to qualified members of the armed forces, active military personnel, veterans, or their widows.
  • Adjustable Rate Mortgage (ARM): The interest on an ARM may vary up or down based on the market. ARMs often offer a lower beginning interest rate. However, this rate will go up over time.
  • Fixed Rate Mortgage: The interest rate on this agreement stays the same for as long as you hold your mortgage, no matter how interest rates change in the financial markets.

When it comes to understanding your financing options, we recommend consulting with one of our mortgage experts to learn more about the mortgage process.

Work with a realtor

The home buying process is already stressful enough, so why not take some of the work off your plate? A realtor can help you save time by pre-selecting homes within your price range and requirements. Not to mention – they’ll be fully immersed in market trends, tax information, and area considerations like school districts. As you get closer to purchasing a home, they will be your go-to for handling negotiations and arranging for a home inspection and appraisal. Once you’re ready to make an offer on a home, they can help with that too.

There are many important steps to the home buying process, even after your offer has been approved. Rest assured knowing a First Financial mortgage expert is here to help you along the way, should you be looking to purchase a home in Monmouth or Ocean Counties, NJ.*

Are you ready to get started? Apply for a mortgage loan today, call our Loan Department at 732.312.1500 Option 4, or visit a First Financial branch. Also be sure to check out our home buyer’s guide to help you through the research and application process.

Happy home buying!

*APR = Annual Percentage Rate. Subject to credit approval. Credit worthiness determines your APR. Rates quoted assume excellent borrower credit history and are for qualified borrowers. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. Higher rates may apply depending on terms of loan and credit worthiness. Available on primary residence only. The Interest Rates, Annual Percentage Rate (APR), and fees are based on current market rates, are for informational purposes only. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a Mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

Renting vs. Owning – What’s the Right Move?

There are many reasons why people may choose to rent rather than own a home. Some renters simply like the idea of living in a temporary place as they are still unsure if they want to settle down there permanently, while others want to avoid the many expenses of home ownership.

However, the major downside to renting is that you’re giving money to your landlord every month – money that you’ll unfortunately never get back and it won’t help you build equity.

In contrast, paying for a mortgage each month may be costly, but will slowly reduce your home loan balance over time. You’ll also get to own the house, which is an incredibly valuable asset nowadays.

If you’re deciding if you should continue renting or if now would be the best time to start owning a home, then you’ve come to the right place. With the way rent continues to increase each year, you might find the latter option is better for you.

Rent Prices Continue to Increase

According to a report by Realtor.com, the official website of the National Association of Realtors – the median rent amount in the 50 biggest metro areas was $1,575 per month. The data suggests that rent amounts rose by 8.1% from the previous year, translating to an extra $118 to pay each month.

Realtor.com also revealed that rent amounts for all unit sizes are currently at an all-time high. Renting a studio apartment increased by 4%, while 1-bedroom and 2-bedroom apartments saw an 8% and 10.2% rise in rent, respectively.

Is Renting Still a Good Idea?

If you aren’t yet sure if you want to settle down, then continuing to rent might be a good idea until you can map out your future a bit more. Many people are still not sure whether they want to move out or stay due to the ongoing COVID-19 pandemic, so if you’re not yet ready to make such a permanent move – that’s quite understandable.

However, for those who are interested in acquiring a place they can own – waiting for the lease to expire and looking for a house to buy could be the ideal move. This way, you can start investing your money toward a valuable asset that will have your name in the title.

To help you decide if now would be a good time to buy a home, you should consider the following questions:

  • Do I have the money to make a down payment?
  • Is my credit score acceptable enough to apply for a mortgage loan?
  • Do I have any debt and, if so – how much more can I afford?

It’s important to ask yourself these questions before purchasing a property.

Conclusion

The cost of renting a place to live continues to increase every year, which makes it more and more impractical to continue doing so. If you believe that now is the right time to own a home, then you might consider applying for a mortgage. When you buy a home, you’ll often be able to save money in the long run that would have otherwise been used on rent (which doesn’t provide you with any equity or a long-term investment).

At First Financial, we can help you get pre-approved for a mortgage so you can know right away if owning a home is the right move for you.*

Contact us today with any questions or visit our website to learn more.

*APR = Annual Percentage Rate. Subject to credit approval. Credit worthiness determines your APR. Rates quoted assume excellent borrower credit history and are for qualified borrowers. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. Higher rates may apply depending on terms of loan and credit worthiness. Available on primary residence only. The Interest Rates, Annual Percentage Rate (APR), and fees are based on current market rates, are for informational purposes only. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a Mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. 

Tips for Buying a Home in the Current Housing Market

If you are currently in the market for a home, you are probably well aware that the nationwide housing inventory is at a record low, and the shortage is causing a problem for many prospective buyers. The current market can even create problems for sellers, because sellers still need to live somewhere after they sell their home. Between bidding wars, cash purchases, and low available inventory – here are a few strategies to help you navigate the current housing market.

Know where you stand. Being aware of your credit score, borrowing power, and housing budget is the key to security in today’s market. Sit down with your lender, financial planner, or real estate agent to talk about realistically, what can you afford. It’s especially important to know exactly how high you can go in a bidding war, because homes are often selling above value and at record speed.

Get expert advice. A real estate agent familiar with the current housing market conditions can advise you when homes you’re looking at are priced too high, and provide tips and leads you normally wouldn’t be able to get on your own. Agents who are familiar with your target neighborhood may know of possible pocket listings too – homeowners who may want to sell without putting their house on the market. In these instances, you may be able to get a home before the competition ever finds out.

Be first in line. The competition is definitely heating up these days. If you want a home badly enough, you’ll have to be ready to put in an offer as soon as the home is listed. Even if the seller decides to let the public bid on their home, if you’re prepared – you’ll get a chance to tour the home as soon as it’s listed if your buyer’s agent is active in the local area, and be one of the first bids in.

Get pre-qualified by your lender before you shop. Having pre-qualification paperwork to present when you place your offer is impressive to a seller and will get you a step ahead of the process in normal market conditions. In today’s market, having proof that you can afford the home you are bidding on is the bare minimum. Right now being pre-approved for a certain amount is very important in terms of competing offers. You’ll also want to be sure you can provide proof of where the down payment is coming from too.

Show that you want it, but don’t get too caught up in a bidding war. It’s tempting to keep placing higher counter offers if you’re outbid on a house that you love, but don’t let your emotions get the best of you. Stick to your budget and it’s okay to bow out if bids increase drastically above value. You can also send a letter to the owner as well. This tactic frequently works. Sellers are often emotionally attached to their homes and memories they’ve made in it, so it may help your offer get selected by letting them know just how much the home would mean to you and your family.

In the end, you may just have to be patient and try not to get discouraged. You don’t want to get stuck with a mortgage you can’t afford either, and eventually – the housing market will normalize again. When that does happen, you’ll be happy you held out for a home you could comfortably afford.

When you’re ready to take that leap – come talk to First Financial. Take advantage of our great mortgage and refinance rates, easy application process, and we’ll help you get pre-qualified before you shop.* Give our lenders a call, they’ll be happy to answer your questions with no commitment required!

*Subject to credit approval. Credit worthiness determines your APR. Rates quoted assume excellent borrower credit history and are for qualified borrowers. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. Higher rates may apply depending on terms of loan and credit worthiness. Available on primary residence only. The Interest Rates, Annual Percentage Rate (APR), and fees are based on current market rates, are for informational purposes only. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

Article Source: Moneyning.com

Tips for First Time Home Buyers

Even if you’re not a first time home buyer, looking for and financing a home can be stressful. When you don’t know where to begin or what to do, it can be even more stressful – especially because it probably will be the biggest purchase of your life. Check out these tips for first time homebuyers to get the most out of your home buying experience and keep it as painless as possible.

Determine how much house you can afford and get preapproved.

When you’re ready to look for your first home, it’s important to know how much home you can afford. This will narrow down your home search and will give you a realistic view of the types of homes you can buy inside of your price range. You will also avoid the temptation to purchase a home where you’ll struggle to make the payments.

Save up for a down payment. 

With such a big purchase, having a down payment to invest in your home is important. A good rule of thumb for a down payment is to save 20% of your mortgage. For instance, if you have a $100,000 mortgage, your target down payment is $20,000.

If 20% of your mortgage doesn’t seem feasible, there are other options out there for first time homebuyers that will allow you to save and invest a smaller amount into your mortgage. If you’re wondering how much you need to save to achieve your desired payment, check out one of our mortgage calculators for reference.

Pay off as much debt as possible.

One of the factors that will determine your creditworthiness is your debt-to-income ratio. A debt-to-income ratio measures the total amount of debt you’re paying off each month compared to the amount of income you’re bringing in within the same period. If the amount of debt you’re paying off is considerably more than your income, this will negatively impact your credit score. In turn, this will hurt your chances of being preapproved for and financing a mortgage.

Try to avoid inquiries on your credit report.

When you’re looking to finance your first home, one item that first time homebuyers seem to overlook is avoiding new lines of credit. For instance, getting a new cell phone, adding on television service, or even setting up a utility account will all affect your credit score and your credit inquiries.

Before you buy a house, your focus should be on maintaining and improving your credit score while saving as much as possible for a down payment and avoid building new avenues of credit.

Buying your first home is no easy feat. When you finance your home with First Financial, we’re with you every step of the way and you’ll be well on your way to opening the door to your new home! Contact us today to learn more about the mortgage process, and check out our educational guidebook to happy homeownership.

APR = Annual Percentage Rate. Subject to credit approval. Credit worthiness determines your APR. Rates quoted assume excellent borrower credit history and are for qualified borrowers. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. Higher rates may apply depending on terms of loan and credit worthiness. Available on primary residence only. The Interest Rates, Annual Percentage Rate (APR), and fees are based on current market rates, are for informational purposes only, are subject to change without notice and may be adjusted based on several factors including, but not limited to, property location, loan amount, loan type, occupancy, property type, loan to value, debt to income ratios, FICO credit scores, refinance with cash out and other variables. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. NMLS CU ID: 685814

 

5 First Year Homeowner Expenses to Prepare For

Most of us are prepared for costs like homeowner’s insurance, property taxes, and HOA dues. We can work these predictable expenses into our housing budget as we begin to shop around and start the purchasing process. But what about the other things? Many who share their experience and advice, learned the hard way that certain expenses crop up with surprising predictability the first year you own a home. If you’re not prepared, these expenses could create a budgeting crisis, or even worse — a debt crisis.

1. Appliance Repair or Replacement

Your prospective home’s appraisal will bring to light just about every major and minor repair you’ll need to complete within the next 10 years, whether it’s flooring, roofing, siding, plumbing, electrical, or structural issues.

The appraisal also lists the appliances included with your home, and this is something you’ll want to pay special attention to. Take careful note of how old the appliances are and how heavily they’ve been used, so you’ll have a game plan for repairs or replacements. For instance, are you purchasing from a single person who didn’t use the dishwasher much or a family of five who used it daily? Here’s a list of the usual life expectancy for major appliances:

  • Washers, dryers, refrigerators, and dishwashers: 10 to 13 years (depending on prior use)
  • Gas ranges: 15 years
  • Stovetops: 15 to 18 years
  • Microwaves: 9 to 10 years
  • Water heaters: 10 to 20 years (tankless water heaters last longer)
  • Furnaces: 15 to 20 years

2. Cosmetic Upgrades

During your first few walk-throughs, you probably started brainstorming about the fun projects you want to do, like painting and updating light fixtures or window treatments. These types of things don’t seem expensive, but they can quickly add up when you’re doing several of them at once.

Separate what you need to do from what you’d like to do (the torn window blinds versus the ugly shade of purple in the bathroom), and draw up a cost estimate so you can start preparing for these upgrades before you move in.

3. Additional Furnishings

You may plan to use your current furniture, but typically you’ll need additional furniture items for your new home – especially if you’re gaining a guest bedroom or additional bathroom. Budget for this expense as well, and look for deals on swap sites and apps like CraigsList, Let Go or Offer Up.

4. Setting Up Services

This one is easy to take for granted, especially if you plan to keep the same services you’ve been using (at the same prices). Don’t forget that transferring services like telephone, internet, cable TV and satellite to a new location usually requires an installation and/or equipment fee. To save a little money, treat it as a new negotiation: don’t be afraid to ask about promotional deals and negotiate pricing based on the competition.

5. Re-keying All the Locks

Last, but not least, it’s always a good idea to re-key your home. Why? Unless your house is a new build, there have been multiple owners or even renters who could possess duplicate sets of keys to your house. This isn’t a major expense. Still, it could run as much as several hundred dollars depending on the number of doors and locks you have, so the expense will need to be budgeted to avoid charging up your credit card.

Handling These Expenses

Besides the previous advice, here are three more tips for preparing and handling these first-year home expenses:

  • Buy less house than you can afford to leave some wiggle room for these expenses in the housing category of your budget.
  • If time is on your side, save more than you think you’ll need for first-year expenses.
  • Prioritize these extra expenses and complete them slowly. After all, you plan on being in this house for awhile, right?

Looking to buy a home in the Monmouth or Ocean County area? You saw our last three short financial solutions videos on the benefits of a First Financial mortgage, how First Financial works with our members’ lending needs, and personalized service. Now check out video #4: personalized loan options. If you have questions about the mortgage process or don’t know how to get started, we are here for you. Contact the Loan Department at 732-312-1500, Option 4 or learn more about First Financial mortgages on our website.

*Subject to credit approval. A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties in New Jersey. See Credit Union for details. Federally insured by NCUA.

 Article Source: Jessica Sommerfield for moneyning.com

5 Tips for Homebuyers in a Seller’s Market

Just because it’s a seller’s market doesn’t mean buyers can’t get their dream home. It may just take a mix of pre-planning, patience, and timing.

Here are few ways buyers can fast track their way into a new home:

Have your own real estate agent.

It may be tempting to think you can get a better deal working with the listing agent. That’s not necessarily true. Neutrality among listing agents means they can’t help one side over the other. So who is there to help you?

Set a realistic budget.

When you set a budget, make sure you include more expenses than just the monthly mortgage payment, down payment, and closing costs. Have you planned for utilities, insurance, Homeowner’s Association fees, lawn care, pest control, and more? Can you still fund your emergency savings account, college for the kids, and retirement?

Figure out what you want vs. need.

Do you want to be in a specific school district? Do you need a big backyard? It may mean compromising on other home wants such as hardwood floors or stainless steel appliances, which could be addressed later. What are you willing to compromise on? Having a clear idea will help in the homebuying process.

Get preapproved.

Want to show sellers you are a serious, qualified buyer? Take the extra step to be preapproved. A preapproval letter shows a buyer’s creditworthiness and ability to get a loan by the lender. But don’t stop there. Once preapproved, buyers should shop around to find the best deal. Don’t be afraid to review the different offers and negotiate with lenders to get the one that works with your budget.

Make a fair bid.

When there is a shortage of inventory, don’t miss out on your dream home because you failed to make a strong opening offer. If you find a home you love in the right location and price range, don’t wait to make an offer or try to lowball sellers. Buyers should be ready to submit a fair offer quickly, or they may risk missing out on the home altogether.

Looking to buy a home in the Monmouth or Ocean County area? You saw our last two short financial solutions videos on the benefits of a First Financial mortgage and how First Financial works with our members’ lending needs, now check out video #3: personalized service. If you have questions about the mortgage process or don’t know how to get started, we are here for you. Contact the Loan Department at 732-312-1500, Option 4 or learn more about First Financial mortgages on our website.

*Subject to credit approval. A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties in New Jersey. See Credit Union for details. Federally insured by NCUA.

 Article Source: Myriam DiGiovanni for financialfeed.com