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Buying a home is an exciting milestone and a big step toward building your future! Whether you’re dreaming of a cozy condo or a place with room to grow, a little preparation can help make the process a breeze. At Hello Credit Union, we’re here to help you feel confident, informed, and supported every step of the way. Let’s walk through what to expect as you prepare for homeownership.
Getting Ready for Homeownership
Before you start scrolling through home listings, it’s a good idea to pause and set yourself up for success. Knowing what you want — and what fits your budget — can make the whole homebuying journey easier.
Start by reviewing your budget to land on a clear, realistic number. This will help guide your search and keep expectations sunny. One thing to keep in mind: when reviewing your mortgage options, lenders use your gross income (that’s your income before taxes) to estimate your payment.
No budget yet? No worries — we’ve got helpful budgeting resources to get you started.
As you plan, remember that homeownership comes with a few extra responsibilities beyond the mortgage payment. Things like lawn care, additional utilities, and even pool maintenance (hello, Florida living!) can all add up. Thinking ahead about these costs will help you stay comfortable long after move-in day.
Once you know what works for you financially, the fun part begins — browsing homes! As you look through listings, ask yourself:
- What type of home feels right for me?
- Where do I want to live?
These details help your loan team better understand your goals and guide you toward options that fit your lifestyle and budget.
Qualifying for a Home Loan
A little preparation goes a long way. No matter the loan type, lenders are generally looking for the same key information, and being ready can help keep things moving smoothly.
Step 1: Gather Your Documents
Having these items handy will make the process easier:
- W-2s from the last 2 years
- Lenders typically look for 24 months of steady employment. If there are gaps, you may be asked to explain them.
- Pay stubs from the last 30 days
- Bank statements from the last 2 months
- A valid form of identification (ID, passport, etc.)
- If you’re self-employed or earn commission income: tax returns from the last 2 years
Step 2: Take a Look at Your Credit
It’s always helpful to know where you stand. Reviewing your credit report and score ahead of time can help you feel more prepared and reduce surprises. You can access your credit report for free up to three times every 12 months at annualcreditreport.com.
Step 3: Get Prequalified
Getting prequalified gives you a clearer picture of what you can afford and shows sellers you’re serious. With our lending team, you can start with a quick, easy online application — and your prequalification is typically good for 90 days.
Step 4: Choose a Realtor
A trusted realtor is a big help during the home-buying process. They’ll represent you during negotiations, understand the local market, and guide you every step of the way.
Avoiding Common Mortgage Pitfalls
Even small financial changes can impact your loan approval, so it’s important to stay mindful while you’re in the process.
New Credit or Big Purchases
As tempting as it may be, avoid opening new credit cards, increasing existing balances, or making large purchases while you’re closing on a home. Try to avoid “Buy Now, Pay Later” options and financing any vehicles. Cash advances also count as debt.
Why does this matter? All debts are reviewed again before closing, and new balances can affect both your approval and your interest rate.
Employment Changes
Thinking about a job change or a shift in pay structure? Be sure to talk with your loan officer first. Changes to salary, commissions, or W-2 vs. 1099 income can affect your loan. Lenders typically require you to provide updated pay stubs within 30 days of closing, so communication is key.
Large Deposits
Avoid depositing cash that exceeds 50% of your verified gross monthly income. Lenders require documentation of all funds used to purchase your home, so be sure to keep records such as checks, receipts, and sale documents.
Gift Funds
If family members are helping with gift funds, talk with your loan officer early. Gift funds must be properly documented, come from an eligible source, and include a signed gift letter. In some cases, lenders may also require bank statements. Cash gifts aren’t accepted, so planning ahead helps keep things stress-free.
Homeownership is a big step, but you don’t have to take it alone. With the right preparation, trusted guidance, and a clear plan, the journey can feel exciting instead of overwhelming. At Hello Credit Union, we’re always happy to answer questions, offer guidance, and help you move forward with confidence. When you’re ready, we’re ready to welcome you home!
