Homebuying season is just around the corner—and with interest rates easing and spring in the air, there’s no better time to start planning your move. If you’re considering buying a home in the next 3–6 months, now’s the time to get your financial foundation in shape. Here are some simple, practical steps to help you feel confident and prepared.
1. Get to Know Your Credit Score
Lenders typically review your credit score early in the process, and it can influence both your mortgage approval and the terms you are offered. A better score can unlock lower interest rates, reduce private mortgage insurance (PMI) costs, and expand your loan choices.
Start by reviewing your credit history through trusted sources like annualcreditreport.com, where you can access free reports from all three major bureaus (Experian, Equifax, TransUnion). These reports give you a detailed look at your credit history, but don’t include your actual credit score—you’ll need to purchase that separately.
If your score could use a boost:
- Review credit cards with high balances and pay them down to 30% of the limit or less
- Make on-time payments consistently
- Avoid opening new credit lines while you’re preparing to buy
Even small improvements can have a big impact on the rate you qualify for. Along with your credit score, your debt‑to‑income ratio (DTI) is another key factor lenders closely evaluate. It’s how much of your monthly income goes toward paying debts—like student loans, car payments, or credit cards. Reducing your DTI—even by a few percentage points—can improve your loan approval chances and help you qualify for better terms.
2. Find a Lender Who Gets You (and Your Market)
Finding a trusted lender is one of the most important first steps in your homebuying journey. You want someone who takes the time to understand your financial picture, explains everything in simple, everyday terms, and helps you feel confident throughout the process. Meet early to review your finances, get pre-approved, and learn about loan options—especially if you’re a first-time homebuyer.
At CommunityAmerica, our Mortgage Advisors are local experts who live and work in the same communities as you. We’re here to walk you through every step, explore loan options, and help you figure out exactly what you can afford with no pressure.
3. Get Ahead of the Market
Homebuying season moves quickly—especially in the spring. Getting started early gives you a competitive edge. A key step is securing a preapproval, which shows sellers you’re serious and ready to act.
Here’s what you can do now to get ahead:
- Gather income documents like paystubs, W-2s, tax returns, and bank statements
- Stay mindful of your credit usage (hold off on big purchases)
- Don’t change jobs or open new lines of credit without speaking to your mortgage advisor
Your lender can help guide you on what to prep—and what to avoid—so your finances stay in good shape.
4. Know Your Loan Options
Not all mortgages are the same, and understanding your options can make a big difference.
Here’s a quick breakdown:
- First-Time Homebuyer loans1 – Designed for first-time homebuyers, this loan covers 100% of your home’s value—no down payment required. (Keep in mind that closing costs still apply, and members must contribute at least $500 toward those costs.) Enjoy an Adjustable Rate Mortgage with a fixed interest rate and steady payments for the first ten years, giving you peace of mind as you settle in. After that, the rate adjusts every six months to reflect the market, keeping your mortgage competitive and flexible as your needs evolve.
- Conventional loans – Popular with buyers who have solid credit and a decent down payment, though some may qualify with as little as 3–5% down.
- Adjustable Rate loans – You’ll often find lower rates with shorter loan terms. The rate stays fixed for a set period, then adjusts periodically based on market conditions.
- Bridge loans – If you’ve found your dream home before selling your current one, a bridge loan can help cover the down payment by tapping into the equity you already have.
- Non-Conforming loans – Designed for members who don’t meet traditional financing guidelines, offering flexibility while staying within the conforming loan limit.
- Jumbo loans – Ideal for higher‑priced homes, providing financing for loan amounts that exceed the conforming loan limit.
- FHA loans – Backed by the government, these loans allow for lower credit scores and smaller down payments, with a minimum of 3.5% down.
- VA loans – For eligible veterans and service members, often with no down payment required.
- USDA loans – Designed for rural areas and lower-income buyers, with zero down.
*Note: The conforming loan limit changes from year to year.
Your Mortgage Advisor can help you compare these options and more to determine what’s right for your situation.
5. Build Your Down Payment (and Budget for More)
Although a substantial down payment isn’t required in many cases, contributing a larger amount can often help buyers secure more favorable loan terms. While mortgage rates may fluctuate, having a solid down payment can make a big difference.
Here's how:
- It can reduce your monthly payment
- It may eliminate or reduce the cost of private mortgage insurance (PMI)
- It shows financial strength to sellers
Aim to set aside 5–20% of the home price, depending on your loan type and goals. You’ll also want to budget for closing costs, moving expenses, new furniture, or home repairs.
Tip: Ask your lender if you can buy points to lower your interest rate—it’s a one-time cost that can save you money in the long run.
6. Know What Matters Most to You
Before you start house-hunting, sit down and make a list of your must-haves and nice-to-haves. This helps you stay focused, especially when emotions kick in during open houses.
Do you need a home office? A big backyard for your dog? Proximity to work or school? Prioritizing your needs helps you make smarter, more confident decisions.
7. Don’t Forget Ongoing Costs
Homeownership is exciting—but it’s also a long-term responsibility. Budgeting for ongoing costs can help you avoid surprises. A few things to plan for:
- Property taxes
- Homeowners insurance
- HOA dues (if applicable)
- Repairs and maintenance (1–3% of home value annually is a good estimate)
*Note: Property taxes and insurance are commonly escrowed into the mortgage payment.
Having these expenses in mind helps you determine your true monthly housing cost—not just your mortgage payment.
8. Be Flexible on Asking Price
The listing price is just a starting point. Some homes sell above asking due to high demand, while others may go below if they’ve been on the market for a while. Your Mortgage Advisor can help you understand what’s realistic based on local trends and your budget.
9. Count on Your Mortgage Partner
CommunityAmerica offers a wide range of products designed to fit almost any need in today’s marketplace, and having a lender who’s responsive and accessible can help set you up for success. At CommunityAmerica, we’re here to answer your questions, explore options with you, and ensure you feel confident throughout your homebuying journey. Schedule a meeting with a CommunityAmerica Mortgage Advisor, visit your nearest branch or give us a call at 877.904.2228 today to get started.
Homebuying doesn’t start with house-hunting—it starts with your finances. By getting your credit in shape, understanding your options, and working with a team that’s truly on your side, you’ll be ready to take that next big step with confidence.
Let’s make this homebuying season your best one yet.
