Buying your first home is an exciting milestone, and it is completely normal to feel overwhelmed by the process. From figuring out your budget to getting the keys on closing day, there are many steps involved. The good news is that with the right preparation and the right financial partner, becoming a homeowner is absolutely within reach.
At Self Reliance Financial Federal Credit Union, we are here to guide you through every step. Below is what first time homebuyers should know as they begin their journey.
1. Check Your Financial Readiness
Before you start browsing listings, take a close look at your financial picture.
Check your credit score.
Most mortgage loans require a minimum score of around 620. Scores of 720 and above typically qualify for the best rates. If your score needs improvement, knowing early gives you time to make changes.
Plan for your down payment.
Depending on your loan type, down payments usually range from 3% and 2o% of the purchase price.
Budget for closing costs.
Closing costs typically fall between 2% and 5% of the home’s price and cover items such as appraisals, title services, and lender fees.
Being financially prepared helps reduce stress and puts you in a stronger buying position.
2. Get Pre-Approved for a Mortgage
One of your most important first steps is completing a mortgage application with SRFFCU.
When you get pre-approved, we help determine:
• Your maximum loan amount
• An estimated monthly payment
• The interest rate range you may qualify for
A mortgage pre-approval provides clarity and shows sellers that you are a serious and qualified buyer.
3. Pre-Qualification vs Pre Approval
These two terms serve different purposes and are often confused.
Pre-Qualification
Pre-qualification gives you a general idea of how much you might be able to borrow. It is usually based on information you provide and may not require full documentation. It is helpful for early budgeting but does not guarantee approval.
Pre-Approval
Pre-approval requires verification of your financial documents. You receive a formal letter stating the amount you are likely qualified to borrow.
Why this matters?
Sellers take pre-approved buyers more seriously because financing has already been reviewed and verified.
4. Find a Real Estate Agent
Choose an experienced local agent who knows the neighborhoods, understands the market, negotiates well, and can help you avoid any red flags during your home search.
5. Start House Hunting
Now comes the fun part, searching for your home. Before you begin, list your must-haves and your nice-to-haves. As you tour homes or attend open houses, pay attention to details such as commute time, local schools, property taxes, homeowners association fees, and the overall condition of the property.
6. Make an Offer
When you find the home you want, it is time to submit an offer. This typically includes:
• Your offer price
• An earnest money deposit, usually 1% to 3% of the purchase price
• Any contingencies such as inspection, appraisal, or financing
Your real estate agent and lender will help ensure your offer is competitive and clearly written.
7. Financing the Property
After your offer is accepted, the loan process begins.
You will review financing options, submit your Agreement of Sale and copies of your deposit checks, and submit required documents such as pay stubs, W-2 forms, and tax returns.
During the state of the process, you will work with your attorney/agent (state specific).
You’ll sign your application and disclosures, and you’ll also need to finalize your homeowner’s insurance. Then, you will receive the Commitment Letter which outlines loan terms and conditions.
8. Underwriting Review and Final Approval
During underwriting, the lender verifies your income, assets, credit, employment, and the property documentation.
Once everything is reviewed and approved, you’ll be all set to close.
9. Final Walkthrough
The final walkthrough is typically completed 24 to 48 hours before closing. This step allows you to confirm that the home is in the agreed upon condition and that any required repairs have been completed.
10. Closing Day and After You Move In
On closing day, you will bring two forms of identification, provide your cash to close through a bank check or wire transfer, and sign the final loan documents. After everything is complete, you will receive the keys to your new home.
After you move in, remember to keep all closing documents in a safe place, set up utilities, change your locks, and update your address with the postal service, your bank, and your employer. Be sure to update your driver’s license if required.
You Are Not Alone on Your Homeownership Journey
Buying your first home can feel overwhelming, but with the right preparation and guidance, it is an achievable goal. Self Reliance Financial Federal Credit Union is here to support you from your first conversation through move in day and beyond.
If you are ready to get started, contact Self Reliance Financial Federal Credit Union today and take the next step toward confident homeownership.