Make a Payment Rates About Careers Contact Locations A guide for first-time homebuyers You’ve had a lot of good times living the rental lifestyle, but maybe now’s the time to start making new memories in your own home. Even if you’re only thinking about buying your first home, there are some things you can do to help you get ready for when the time is right.

Get close with your credit score.

It can have a big impact on how much home you can afford. You’ll hear about credit often throughout the home buying process.

Start saving for your down payment.

More money down means lower monthly mortgage payments. It’s never too early to start saving.

Speak up!

You’re going to have some questions throughout the homebuying process. No matter where you’re at along the way, we’re here to help you feel comfortable and confident.

1. The Preapproval Process

Once you decide it’s time to start looking for your first home, stop into Summit and for . We’ll help figure out your price range and which loan program works best for you based on where you’re at financially. We’ll talk about:

Your credit history

The higher your credit score, the lower your interest rates and closing costs. We’ll look at your credit report together and determine your next best step. And if your credit isn’t where it needs to be, we’ll help you make a plan to improve it.

Income, assets and liability

We’ll look at how much money you have coming in and how much is going out, plus any savings or debt, and show you the loan options that make the most sense for you.

Down payment

You could make it happen with as little as 3% down. On the other hand, a greater down payment has advantages. Like paying less Private Mortgage Insurance (PMI), which reimburses us if you default on your loan. Some loan programs require PMI if the borrower has less than 20% equity in the home, but Summit also has programs that allow some members to avoid PMI costs even if they don’t have a 20% down payment. A bigger down payment means you can stop making PMI payments sooner.

What You'll Need for Preapproval

  • Income and employment history (your most recent 30 days of pay stubs and two years of W-2s)
  • Bank account and loan balances (have your statements or account numbers)
  • Rental history (including landlord contact info)
  • Government-issued identification (such as a driver’s license)

Why Get PreApproved?

When it's finally time to make an offer on a home, a preapproval is key. It shows the maximum purchase price you're approved for and give you more credibility than other potential buyers who aren't yet approved.

Home Loan Options

During preapproval, we’ll help you choose the loan that’s right for you. We offer different rates and terms based on where you’re at financially and how much you’re willing to put down up front. The two most common home loan options available to first-time homebuyers are:

Fixed-Rate Mortgage

A rate that stays consistent throughout the term of your loan means your monthly payment does too, which makes it easier to stick to your budget. and  fixed mortgages are popular options for this type of loan.

Adjustable-Rate Mortgage (ARM)

Flexibility and upfront savings are the advantages of an . These loans require less of a down payment and give you the ability to lock in a lower rate for the first couple years of your mortgage. Interest rates may change after the initial fixed-rate period, so you need to be willing to take a little risk in exchange for lower rates.

Down Payment Assistance Programs

These programs provide assistance with down payment and closing costs for first-time homebuyers who meet certain income requirements. Eligible borrowers have access to options like WHEDA (Wisconsin Housing and Economic Development Authority), USDA Guaranteed Rural Development, VA loan programs and many more!

2. The Search Begins

Ready for the fun part? Once you’re preapproved, it’s time to go house hunting. And having an experienced Realtor at your side will make the process a walk in the park. It could save you a lot of money, too. A real estate agent will help you understand:
  • What kinds of homes realistically match both your budget and your taste.
  • The best neighborhood fit for you and your family.
  • How to strike the right balance between your must-haves and wish-fors. What’s more important: a finished basement or some extra kitchen counter space?
  • The formalities that come with purchasing a home. The last thing you want to get hung up on is complicated paperwork. But with the help of Summit and your real estate agent, you’ll have nothing to worry about.

Some Things to Consider

Before you make any big decisions, giving the following some thought could save you a lot of money and an entire home’s worth of headaches

Take your time.

It’s tempting, we know. But don’t start looking for a home until you know your budget. Nothing turns “cozy” into “cramped” like seeing homes outside of your price range.

Understand the costs. All of them.

Your total monthly mortgage payment is made up of four factors known as PITI: principal, interest, taxes and insurance. It’s important to   when thinking about the monthly payments you’ll be making.

Don’t buy the nicest house on the block.

Affordable homes in desirable neighborhoods are more likely to increase in resale value, which can help you build equity down the road. An experienced Realtor can help you decide which homes to pass on and which ones to jump on.

Resist the urge to splurge.

Once you’ve gotten final loan approval, avoid any major purchases. Changes in your credit score before closing can put your loan in jeopardy, so hold off on the shiny appliances and comfy couch until after closing day.

What's PITI

The four parts of PITI make up your  . They include:
Principal
This is based on what you borrow and is used to pay down the balance of your loan.
Interest
This is the charge you pay the lender. Consider it the cost of borrowing.
Taxes
These are the property taxes you pay as a homeowner.
Insurance
This includes both homeowner’s insurance and Private Mortgage Insurance (PMI).

3. The Home Stretch

Make your offer.

You’ve done your homework, gotten preapproved and found the perfect home that fits your budget and your style. Your Realtor will help you make a formal “offer to purchase,” which is the purchase contract signed by both the seller and the buyer.

Finalize your loan.

Once your offer is accepted, we can get started on approving your loan. We’ll set up an appraisal to make sure the price you’re paying for the home is reasonable, arrange for title insurance and process and underwrite your loan request so it’s ready for closing. In the meantime, you can go figure out which friends are going to help you with the move. Chances to cash in on friend karma don’t come along every day.

Close on your home.

While your Realtor sets up an official closing date and time, you can start shopping for homeowner’s insurance. You’ll need to show proof of homeowner’s insurance at closing. Then comes everyone’s favorite part, the big finale – a stack of paperwork to seal the deal. But at least you’ll be signing with a smile, knowing that the keys to your new home are just a few autographs away!

Moving day!

The hard work is out of the way. Give yourself a pat on the back for navigating the homebuying process with ease and moving into your very first home! Now, tell your friends to get over there and help you squeeze all of your furniture through the front door. Pro tip: lift with your legs, and take a few breaks along the way to appreciate your new digs!
Buying your first home is a big decision, but the process is made simpler with Summit at your side every step of the way. Give us a call today! 800-236-5560 Get to know our  or to discuss making your first home happen. Featured Products Certificates Checking Accounts Home Equity Loans Home Loans Business Banking Certificates Checking Accounts Home Equity Loans Home Loans Business Banking Financial Education Upcoming Events Programs Tools & Calculators On-demand Webinars Podcasts Upcoming Events Programs Tools & Calculators On-demand Webinars Podcasts About Equity in Money™ About Summit Careers News Community Giving Equity in Money™ About Summit Careers News Community Giving Help & Support Contact Us Member Support Center Schedule an Appointment Find a Branch Contact Us Member Support Center Schedule an Appointment Find a Branch Please read the following before proceeding to: The website you are about to visit is solely the responsibility of the merchant or other party providing the site. The content of this third-party site, including materials and information, is solely the responsibility of the provider of the site. The Credit Union is not responsible for any such third-party content. Any transactions that you enter into with a vendor, merchant or other party that you access through this third-party site are solely between you and that vendor, merchant or other party. The Credit Union does not endorse the content contained in this third-party site, nor the organization publishing the site, and hereby disclaims any responsibility for such content. The Credit Union Privacy Policy does not apply to this third-party site, and for further information you should consult the privacy disclosures of the third-party site. NCUA Insurance Estimator Privacy, Security & Accessibility Rates, Fees, Terms & Disclosures Routing Number *  The Wisconsin's #1 Mortgage Lender designation is based on the number of loans in 2022, gathered from the Home Mortgage Disclosure Act data compiled annually by the Consumer Financial Protection Bureau. The results of the data were obtained through the LEI: 254900NTAC4H10MGSU23 **  SBA Lender of the Year Award for Credit Unions as awarded by the Small Business Administration of Wisconsin in 2023. Copyright 2024 © Summit Credit Union. All rights reserved. If you are using a screen reader and are having problems using this website, please call 608-243-5000 for assistance. Insured by NCUA