Buying a Home

Make the most of your money where it really matters!

Impact’s low fees and competitive interest rates can make a big difference. Saving a lot on your loan can help you buy more home – just one more way we help you make the most of your money.

Determine What You Can Afford

Buying a home is exciting, but it can also be overwhelming – especially for first-time buyers. Don't let that discourage you because the benefits of home ownership are great. It will help you establish credit, offer you tax breaks and is often a great investment when it comes time to sell.

Our budgeting tools can help you determine how much house you can afford and our mortgage calculator can give you an estimate of what your monthly payment will be.

As a general rule, you should look to purchase a home that costs two-and-a-half times your annual salary. However, your existing debt might affect what your monthly payments can be. If you are currently renting, keep in mind that owning a home comes with many added maintenance expenses so keep that in mind as you calculate your budget. Another rule of thumb is that your monthly payment should be no more than a week-and-a-half of pay in order to budget your finances comfortably.

When to Buy

Mortgage rates have recently been at historic lows, so now is a great time to buy a home. Even though buying a home is often a great investment, you shouldn't do it until you know you're ready. If you think you might be moving to a new city within the next few years, buying a home is probably not a good idea.

Owning a home also requires an investment of time. If you're a Do-it-Yourselfer, keep in mind that you will need time to maintain your home to protect the value of your investment. If you cannot commit to the time, buying a home might not be right for you.

However, if you have steady employment and see yourself in one location for at least a few years, there's never been a better time to purchase a home.

Where to Buy

They say the three most important things in buying a home are location, location, location. Finding the right neighborhood makes all the difference. Here's some things to think about when shopping for your home.

• A good school system (even if you don't have children, homes in neighborhoods with good school systems generally have higher values.)
• Close to shopping
• Proximity to your work
• Proximity to friends and family members
• Near main roads (but not too close)
• Traffic patterns in your neighborhood
• The condition of other homes in your neighborhood
• Proximity to parks, restaurants and recreation
• Age of the neighborhood (older homes requires more maintenance)

Steps Toward Purchase

You might be surprised to find that buying a home takes more time than you think. House hunting can be frustrating at times, but taking your time almost always pays off. Remember: you'll have to live with your purchase every day so it's worth it to wait to purchase until you find the home you really want.

1. Determine how much you can afford to pay for your home.
2. Begin saving up for a down payment on your home. (In most cases, you will need 20% of the purchase price of your home.)
3. Get pre-approved for your loan. This will let you know how big of a loan Impact Credit Union will make toward your new home. Get Started!
4. Go house hunting! Relax and enjoy the process. It may seem frustrating at times, but it's also very exciting.
5. Once you have found a home, you'll make an offer. Often, the homeowner will make a counter-offer. If you hire an inspector to check the home, he/she might find issues that might make you decide not to purchase the home or you might find small problems that you can use to negotiate a better price.
6. Apply for a loan from Impact Credit Union. Get Started.
7. Upon approval, a closing date will be set and you will receive the keys to your new home.

Common Terminology

Points: Many lenders require an upfront cash payment as part of the charge for the loan. This is calculated as a percent of the loan amount. For example, "3 points" means a charge equal to 3% of the loan balance.

Interest rate: The amount of interest charged on the loan. For example, if your interest rate is 5% on a loan of $100,000, you are actually paying $105,000 for your loan.

Fixed rate mortgage: This is a loan where the interest rate stays fixed over the term of the loan.

Adjustable rate mortgage: This is a mortgage where the interest rate is often low at the beginning of the loan and then goes up over time. Be careful when selecting this option as your monthly mortgage payment can increase rapidly and make budgeting difficult.

Origination fee: A fee charged upfront by some lenders, which is usually a percentage of the loan amount. Unlike points, however, an origination fee does not vary with the interest rate.

Term: This is the length of your loan. Most home loans typically have 15- or 30-year terms.