So, you want to buy a home? Smart move. When you own a home, you can build equity, capitalize on potential tax savings (consult your tax advisor), and enjoy long-term housing stability. But, buying a home requires applying for a mortgage, which can feel overwhelming, especially if it’s your first time. You can, however, make the process easier by taking a few simple steps:

1.) Check your credit. Good credit can help you qualify for a mortgage and possible a better interest rate, which would lower your monthly payments and save you a lot of money over the life of your loan. To learn where your credit stands, request a free copy of your credit report from AnnualCreditReport.com.

2.) Boost your credit. Even if you credit is good, it is never a bad idea to take steps to improve it further. You can accomplish this by paying your bills on time, avoid applying for new credit, keeping your existing credit line balances below 50% of your credit limit along with settling any outstanding debts.

3.) Set a budget. Before you start shopping for a home, take a long look at your monthly expenses and income to ensure you have money in your budget to comfortably afford a mortgage payment. Use a mortgage calculator to determine your monthly payment. Once you have a rough idea how much you can afford, stay within your budget. Meet with a mortgage professional to go over your plans an budget to ensure success.

4.) Build your savings. If you have not done so already, start setting aside funds for your down payment. The larger you down payment, the lower your monthly payment will be and the easier it will be to qualify for a mortgage. To make saving easier, arrange to have funds automatically deposited to a high-yield savings account. Meet with your community banker about deposit options.

5.) Explore potential neighborhoods. You are not just buying a home – you are also making an investment into a city, town, and neighborhood. Consider the features that are important which may include schools, public services, and access to highways and/or public transportation. It is also a good idea to find out what taxes and fees homeowners are expected to pay in the towns and neighborhoods you are considering. Each city or town has a website which lists off the specific tax rate for their city or town.

6.) Know your loan options. For example, if you’re a first-time homebuyer, you may be able to qualify for programs that offer down payment and closing cost assistance. Ask about our First Time Homebuyer program.

7.) Research available grant programs. Buyers who meet certain requirements and can attend educational or counseling programs may qualify for assistance programs. Talk to a mortgage professional about available programs.

8.) Gather up your documents. When you’re ready to complete a full mortgage application, you’ll need to give your lender documents, including:

• 2 consecutive year-to-date paystubs
• 2 most recent consecutive years W-2 statements
• 2 most recent consecutive years personal tax returns with all schedules and attachments (if self-employed or own real estate)
• 2 months more recent bank statements on all asset accounts (all pages – even the blank pages)
• Detailed letter of explanation for any gaps in employment (if applicable)
• Detail letter of explanation for any derogatory credit within the last 2 years (if applicable)

You may also need the following:

• Most recent property tax statement
• Declaration page to Homeowners Insurance – primary residence
• Lease agreement(s) for all units/properties owned
• Most recent property tax statement for all income properties owned
• Declaration page to insurance for all income properties owned

9.) Get pre-qualified. If you want to make the home-buying process easier and give yourself a negotiating advantage with sellers, get a free pre-qualification. It can help make the mortgage process easier and let sellers know you’re a qualified buyer. Keep in mind that a pre-qualification does not mean you are approved for the mortgage. You’ll have to complete a full mortgage application and go through the underwriting process to get approved.

10.) Maintain employment stability. When approving mortgages, lenders will look at the history and stability or your employment.

Looking for more home-buying guidance? We’re here to help answer your questions and guide you through the process every step of the way.