4 Critical Things to Know Before Obtaining a Mortgage

10:58 AM, May 10, 2019
1:57 PM, Jun 12, 2019

Few things symbolize achieving the “American Dream” more than buying your first house. But there are many reasons not everyone is able to make the leap when they’re financially independent. From budgeting long-term to planning your timing right, there is a lot to consider. Learn a few ways to make the transition from renting to owning a home a bit smoother.

1. Consider Your Finances Ahead of Time

When first-time homebuyers are ready to start looking for a house, looking at listings is not the best first step. While that is the fun part, Jeremy Garza, President and CEO of Gulf Coast Federal Credit Union, says that you’ll have a much better idea of where you stand in terms of buying power if you have your credit reviewed six to eight months out.

“One of the worst experiences is thinking that you’re ready to purchase and something shows up on your credit report and you have to take time to clear that up,” Garza says. If you’re looking to buy in the springtime, he says, getting pre-approved in the winter will help you set a goal for how much you’re able to put down, setting your standards for your purchase down the road.

2. Consider the Long Term Costs

When you’re renting an apartment, condo, or home, the main long-term cost you have to consider is rent and perhaps renter’s insurance. Repairs are generally handled by a landlord or the property owner. But when you buy a home, those costs are transferred to you.

Garza says that’s one of Gulf Coast’s priorities: opening the eyes of first-time homebuyers to what it takes to maintain a home month to month. For instance, he says, an air-conditioning unit will be about $5,000. “Overall there are a lot of expenses. When tax time comes around, property taxes give people sticker shock, so we set up escrow accounts for taxes and insurance. That way, people can see how much their payments are affected by those numbers on a monthly basis.”

3. Factor in the Time the Process Will Take

Buying a home when you’re locked into a yearly rental can be a delicate dance. The goal is to make sure you have time to find a home, go through the closing process, and move in—without having to break your lease or enter into a higher month-to-month rental. Garza explains that members of GCFCU have a leg up in the home-buying process because everything is done in-house. “We can handle a loan from start to finish within about three-and-a-half weeks,” he says. “We don’t have to go through red tape like some of the larger mortgage companies where it’s pending and it has to go to another approval agency or go to a higher-up. In our mortgage department, we have everything in-house – our underwriter, our escrow officers, and our agents.”

4. Find the Right Lender for You

The mortgage process can be a stressful one, but Garza says that it doesn’t have to be. Gulf Coast offers a class in the summertime to educate homebuyers about the steps. “We go over the purchasing process, expenses that are associated with homes, the escrow process—it’s a complicated process,” he says. “We believe that if we don’t give the information to the member, they’ll find out in a blunt-force time period when everything is due at once, and that’s not what you want. We don’t want to put our members in a position to fail.”

In other words, from start to finish, Gulf Coast tries to make the process as seamless as possible. That extends even after closing: the credit union will never sell off their members’ loans. That’s something that’s relatively unheard of at bigger banks and mortgage companies. It’s a small thing, but not having to worry about changing your automatic payments or dealing with a new person every few months about loan questions can be a big relief.

Transitioning from a rental to homeownership doesn’t have to be stressful; let the professionals at GCFCU help you. They’ve been in the Coastal Bend community for over 80 years. Rest assured that whether you want to put 5% down or 50%, they’ll do everything they can to make sure you’re set up for financial success.

If you’re interested in learning more about their products, visit them online at CCGCFCU.com to find your nearest branch.


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