Are you ready to buy a house?
logo

Money Matters Blog for Cinfed Members

How to Know if You’re Ready to Buy a House

Posted on February 11, 2019
Topic Categories: Consumer Help

Home Sweet Home Mat

By Dwayne Holt, Mortgage Lending Director
 

Buying a house is a big decision. It’s likely the biggest financial commitment you’ll ever make in your life. 
 

Certainly, you need to be ready to accept the responsibilities and the mindset of thinking like a homeowner. But there are also some very practical financial issues that you need to consider before beginning the home buying process. If you agree with the following statements, you’re probably ready to begin. 

 

Your personal finances are in order.

Assess the current state of your debt: credit cards, auto loans, student loans and personal loans. A key indicator of readiness is your credit score. Managing your credit score is a separate and very important topic, but having a high credit score can pay off when you get a lower interest rate on your mortgage – potentially saving thousands of dollars over the lifetime of the loan. 

So before your first meeting with a mortgage professional, collect the most recent monthly statements for your checking and savings accounts, as well as statements for any other financial holdings or investments. Overall, financial institutions are looking to make sure you demonstrate economic stability and consistency. View our document checklist for first time buyers, here. 



 

You’ve saved for a down payment. 

Your mortgage will require a down payment that acts as a deposit. The down payment gives you immediate equity in the home and indicates your financial stability.
Mortgage loans have a wide range of down payment options. The amount of your down payment can affect the interest rate, closing costs and monthly payment. Larger down payments equal lower risk for the lender which in turn allows lenders to offer better rates or closing costs. Your credit score or credit profile can also determine the amount of down payment that is required. Down payments can not be borrowed. Gifts from immediate family can be used, however a signed gift letter will need to be provided stating that it is a gift and no repayment is required. 




You have a good idea of what your monthly mortgage payment should be. 

As a starting point, you can figure a monthly payment that is about 25% of your take-home pay, a total which should include taxes and insurance. You can get a basic estimate by entering the home price minus your down payment into our mortgage calculator
However, the costs associated with home ownership go beyond just your principle and interest. Additional expenses may include property taxes, insurance, homeowner’s association fees, city assessments, water, sewer and garbage. These charges can add hundreds to your monthly budget and should be factored in as well. 




You’re planning to stay for a while. 

Because of the time and resources required to obtain your home, you should view it as a long-term investment. Home prices, on average, grow about three percent per year. So if you buy a home and sell it within a year or two, there’s a chance that the increased value (if any) may not cover the cost associated with selling the home. Think about the costs of securing the loan (including closing costs), moving, pre-move-in preparations and repairs, as well as the real estate sales commission, which is typically six percent. Given the expected rate of home price appreciation, it will likely take at least three years for you to break even.
 


Feel like you're ready? Take a look at our mortgage options, or get in touch with a member of our team. 
 





CONTACT CINFED

Cinfed Credit Union
4801 Kennedy Avenue
Cincinnati, OH 45209
(513) 333-3800
Routing #242076656

MEMBER REVIEWS

They always go above and beyond at the Oakley branch and truly care about each of their members. And, I absolutely love their kids' membership program. It makes it fun for them to learn about money... 
— Courtney Snow
Just closed on a Home Equity line of credit loan, and the process couldn't have been any easier. With this I was able to pay off 2 high interest credit cards and deposited the rest into a checking... 
— Thomas
Been a member since I moved to the Queen City in 1978. Cinfed has always provided customer service that other financial institutions only dream about. Thank you for almost forty years of outstanding... 
— Tim Grabenstein
I recently became a member here at CINFED and it was the best decision I have ever made. I walked in with tears and despair and left with dry eyes, a smile, and I even received a hug from the branch... 
— Melanie
As a long time member, I have always received great service from all CinFed employees. I just wanted to say a special thank you to Dee Dee Day and Dawn Strickland. I had to make some changes to... 
— John-Member since 1990
Earlier this year my much younger sister passed away and with that many obligations were to be met by my husband and myself ..My sister was survived by a daughter and son. We have since then taken on... 
— Vonda
How lucky I am to have Liz Frey managing the office I use! I live in Florida but maintain Cinfed as my main banking office. Everytime I need special help a simple email or call to Liz and it is... 
— Debbie G
Emily Snyder took the best care of my two auto loans. She was professional, courteous and very knowledgeable of the available services for me. She went out of her way to make sure I felt like I was... 
— Sarah Amyotte
I have been member with Cinfed since 1986. The Roselawn Cinfed staff greeted the customer phone calls friendly and polite willing to help you with your needs. They have excellent customer service.... 
— Marian Dudley
I have been a member of CINFED since about 1981 when I was transferred from SLC, Utah with the US Army Recruiting Command and have always received excellent service and support . Hope Dee Dee is... 
— Robert Olguin
I have been a member at the Roselawn Branch for a long time and I couldn't be more satisfied with the customer service. No matter how often I come in with a question or issue and no matter what... 
— Andreya T Williams
I been a member since 1985 and can not imagine banking anywhere else. This credit union as taken care of my every need. 24/7 services is excellent.
— Edward, member since 1985

NOTE: You are leaving Cinfed Credit Union's web site. Cinfed is not responsible for content or security policies of this external, linked web site.