First-Time Home Buyer's Guide

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3 Things That Will Impact Your Credit Score

When applying for a home mortgage, your credit score is used by mortgage lenders to determine whether or not to consider the loan, and what the interest rates and fees may be.

Here are three factors that can negatively affect your credit score:

1. Filing for bankruptcy: Declaring bankruptcy may seem like the only way out of a stressful credit situation, but the implications are far-reaching into the future. Bankruptcy remains a part of public record for years and years, and affects future credit stakes.
2. Mistakes that you didn't make or didn't know about: 5-10% of all credit reports contain a mistake worth reporting and correcting. Simple mistakes you aren't even aware of may be the last thing standing between your credit and approval.
3. New and recently closed accounts: Opening a new credit account or shifting older accounts around will only confuse you and create bigger issues. Decreasing your overall credit or credit usage impacts overall credit availability, which is one of the most important determining factors.

Your credit is always in your hands and we are here to help guide you.
For personalized credit consultation, speak with one of our specialists today.

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What Credit Score Do I Need To Get A Mortgage?

Your credit score is determined based on payment history, amounts owed, length of credit history and new credit you've been granted. If you've been financially active for a number of years, make all payments on time, owe little or nothing to creditors and continue to add new credit, you may have what's considered "excellent" credit, the highest being 850. If your money management history is checkered with late payments, outstanding debt and other red flags, you may have a score at the lower end, which starts at 300.

At Bethpage, it's important to know that there's no magic number for securing a mortgage loan, and that your credit score is one part of an application with many features to consider. However, your credit score can influence whether a loan is granted and the interest rate you'll pay.

Does that mean my low credit score prohibits me from getting a mortgage?

Not necessarily! The good news about credit scores is that they're living figures that change over time. As your financial standing improves, so does your credit score! Adopting better bill-paying habits and eliminating debts you currently owe can help raise your credit score. We've written a guide for improving your credit score with handy tips for better money management.

Your credit score, assets, liabilities and financial history are unique to you and therefore, your mortgage application will be evaluated in respect to the whole picture. However, demonstrated credit responsibility is a major piece of approving a loan of any kind. If you have questions related to your specific mortgage application, contact one of our financial advisors today for planning advice.

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How To Build Your Dream Home

Close your eyes and picture your dream home. What does it look like? Does it have tall ceilings? A lot of windows? An enormous backyard? A short commute to work or a top-notch school for your children? If you're about to embark on your first homebuying experience, you probably have a long list of wants and needs. How do you know what you should prioritize?

Here's how to realistically "build" your dream home before you buy:

1. Make a list of everything you want
Start out with a long list of everything you could possibly want in a home, even if it seems a little far-fetched. It's good to see all these items written out so you can start scratching things off or making adjustments as you go along.

If you're buying a home with a partner or family, have everyone weigh in on the list so you can understand what everyone's ideal living situation would be. As you create this list, keep in mind that finding a home embodying all of those qualities in your price range would be nothing short of a miracle. This list simply acts as a starting-off point.

2. Determine your price range
After you've made your laundry list of desired features, your next step will be setting the right price range. Remember to consult with your mortgage lender for this. Doing so will help you better understand which of the items on your list are within and which are not. From here, you can start crossing off items that might push your home out of the ideal price range.

3. Decide what could be an add-on
When selecting a home, it's important to prioritize what you need in a home rather than what would be nice to have. That doesn't mean you have to pare down the items on your wish list! Homeownership is a long-term commitment, in which you're expected to make your imprint on a home. Know that over time, you may be able to add some of these features or make adjustments to accommodate your wishes and your life changes. Try to keep the needs list to no more than three non-negotiable items as this will keep enough doors open for you to have a strong selection pool and yet will filter out homes that don't hit the mark.

4. Rethink your dream home
As this is your first time buying, it's better to accept that you're not going to find the perfect home right away. Your first home is just that - the first place you've actually owned, where you will do plenty of learning and growing, but not necessarily staying. Hold onto your wants list, because there are surely features on there that you can add to whatever home you buy now - or find in the right new place in the future.

For more assistance through your first homebuying experience, visit the rest of the Bethpage Federal Credit Union website today!

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What To Look For In A Real Estate Agent

When it's the first time buying a home, you're probably going to have a lot of questions and feel fairly confused. Real estate agents are such an essential resource for anyone who is new to the process. In fact, selecting your agent might be the most important decision next to which house you buy. To help you find the right person for the job, here are some qualities that make a great real estate agent:

1. He/she has all the right credentials
One of the simplest ways to guarantee certain qualities in your agent is by looking at what sort of credentials they have. There are different specialties and certifications that real estate agents can acquire that will clue you into their expertise and business conduct.

For example, members of the National Association of Realtors will call themselves a Realtor, indicating that they've pledged to support a certain code of ethics. Other credentials include Certified Residential Specialist, Seniors Real Estate Specialist or Accredited Buyer's Representative.

2. The agent knows the area
Real estate is all about location. So, if you find a real estate agent who has extensive experience looking for homes in your desired area - or, better yet, grew up there - you've found someone who can probably guide you to the right home. Not only will this agent be familiar with the local market or neighborhood highlights, but he or she will also have incomparable insight that can help you find a great deal.

3. There is good word of mouth
Your best resource in determining what agent is right for you are his or her former clients. Look for reviews online or speak with these people directly to get an idea of their experience and how they would rate it. If you're looking for an even simpler process, ask around for recommendations. Sometimes, all you need is a good referral from a friend or family member to find the right agent for you.

4. He/she isn't too busy for you
Some of the best agents in town are probably also in high demand, meaning they have tightly packed schedules. As a first-time buyer, you're going to want an agent who can devote more time and attention to you so you can find the right home and go through the buying process without a hitch. Before you decide on an agent, be sure to interview a few to see how they fit with what you want and need.

For more assistance through your first time homebuying experience, visit the rest of the Bethpage Federal Credit Union website today!

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The Best Time To Buy A Home

Even if you're completely new to home buying, you probably know that there is a certain seasonality to real estate. Some months are a lot more favorable to sellers, and others are considered a buyers' market based on real estate activity and average listing prices. With all that fluctuation, how do you know when the best time to buy is? Here are some advantages to the different seasons:

Fall
Fall is often considered the best season for buyers. Inventory is higher and competition is lower than other months, which often leads to some discounted prices. In fact, an analysis from RealtyTrac found that October was the optimal time to buy, with an average discount of 2.6% below estimated market value.

Winter
If you're looking at a home in winter, you might find yourself buying in the middle of the holiday season. Typically, homeowners aren't clamoring to put their homes on the market in this season, mostly due to unfavorable weather conditions. While that means inventory will be low, which tells you that any house on the market is seriously hoping to sell soon. For that reason, you may be more likely to secure a better deal on a home in winter.

As a bonus, you're getting to experience a home under some pretty rough conditions. Buyers tend to see homes in more visually appealing seasons with a lot of attention to landscaping and deferred maintenance issues. In winter, you know what to expect of the home in less than ideal weather.

Spring
Spring is one of the busiest times for real estate. The weather is warming up, flowers are in bloom, and homeowners are ready for change. Real estate usually sees an inventory hike at the end of winter that extends through early summer, according to Realtor.com. With demand and competition in the marketplace at its high, listing prices usually increase, which can put buyers at a disadvantage.

If you're looking for a lot of options in your new home, or have a certain timeline for your move, it could be the right time for you to buy.

Summer
In summer, you'll still see the chaos of spring real estate market with a natural peak in July. Most home buyers and sellers are looking to find their home and to move in prior to the start of school in September. This can be an ideal time for you to move, especially if you have children who will be starting school in the fall.

The truth is, any time is a great time to buy a home. Take a look at your local market while considering your own personal goals. You should also consult with a real estate agent as well as your mortgage professional about timing your purchase to best suit your needs.

For more assistance through your first time homebuying experience, visit the rest of the Bethpage Federal Credit Union website today!

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5 Tips to Help You Choose The Right Home

It might sound relatively simple, but there are a number of different considerations you'll have to make to find the right home. Here are five tips that can help you find the home of your dreams:

1. Decide on your priorities
Before you even start looking at homes, you need to understand the difference between what you need and what you could live without. If you're buying alone or with a partner, make your considerations accordingly. Compiling a list of priorities and wishes will help you narrow your search and give you an idea of what you're willing to compromise on to get a good home in your price range. Best practice is to keep your lists short—three must have's and three deal killer's. This will help keep your focus in the right place so that your time spent shopping is time well spent.

2. Set a budget
Your budget also plays a huge role in your home selection. This is the time to consult with a lender and/or financial planner as well as your tax advisor to determine what you truly can afford. It's important to know the actual budget for your new abode! Having this information should also help you reduce the scope of your search as well as give you a better idea of the types of compromises you may need to make.

3. Look at the neighborhood
Selecting a home isn't just about looking at the features within its walls and on the property, it's also looking at all that surrounds it. The neighborhood is just as important of an influence in this decision as any other consideration you will make. If you're looking to live somewhere within a specific school district or a certain distance from your work, the neighborhood may be your top priority.

4. Think about how you live
You might have a laundry list of home features that would make your living situation a dream. However, as Forbes magazine noted, finding the right space is less about the where and more about how. For example, spectacular views mean nothing if you're rarely home long enough to truly enjoy them and a minimalist kitchen doesn't help if you have a big, hungry family.

5. Abandon the idea of perfection
You can dream all you want, but it would take a miracle for you to find the absolute perfect home that will be with you all of the stages of your life the first time buying a home. Don't be disappointed - this is okay! There is a home that is right for you at this time, and you can find it. You may even be able to make it your dream home for a lifetime! Every house on the market presents an opportunity to you as a homeowner. Instead of looking for the one that's 100% perfect in every way; look for the one with potential, where you can grow with it.

For more assistance through your first time homebuying experience, visit the rest of the Bethpage Federal Credit Union website today!

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How Long Does It Take To Buy A Home?

We've discussed the many steps involved in the homebuying process, which might have left you wondering: How long does it actually take to buy a house? A few days? Weeks? Months? The truth is, the length of the experience varies from person to person, but there is a way to plan out your timeline. Here is a suggested succession of events:

It can start months before you close
The process officially begins when you do. Before you even begin searching for your future home, you'll want to start a savings plan and explore your options for a mortgage.

This can and should start months ahead of when you actually close on a property and effectively end the homebuying process. The more time you have to save and smooth out your finances, the better position you'll be in to buy.

It can take a few weeks to find the right place (but it doesn't have to)
The next step - finding a home - is tricky to estimate a timeline for. It depends on the market and what you're looking for in a house. In some very lucky cases, you could find the perfect place at your first showing. In others, it could take weeks of multiple showings to locate the right property. However, there are a couple of ways you can make sure the latter doesn't happen to you.

The first is knowing your price range and what features your new home will need. This information should help you narrow down your search enough so that you can more efficiently house-hunt. However, you don't want to reduce your options too much.

You should also be willing to compromise. Seeing potential in a home is just as important as searching for all the right qualities. If you're open to making changes to a property as a homeowner, you'll land on the right home much sooner.

It can take a month to close on a home
Once you've squared away your finances and had your offer accepted on the right home, the closing process begins. Depending on the loan you have and what state you're buying in, the exact time that this process takes can vary. However, on average, it usually takes 30 days to close.

What could cause this to go faster? If you are prequalified for a mortgage, for instance, you are in a great place to close quickly. Your organization can also help. If you've already given your lender all the necessary documents, you can sidestep any annoying delays in your closing.

Overall, the experience depends on a number of factors, but many of them rely on your own proactiveness and organization. Planning and preparedness are essential to the homebuying process, so the more of both means the better off you'll be to avoid unnecessary delays and disruptions.

For more information about your first homebuying experience and top notch assistance in making your home owning dreams a reality, become a Bethpage Federal Credit Union member today.

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Do I Need To Put Down A
20% Deposit?

Throughout the history of home buying, a 20% down payment has been the assumed standard. However, those times have changed and today there are more options than ever for buyers who can't or don't want to use the 20% down payment.

Federal Housing Administration Loans (FHA)
One of the most common alternatives to the 20% standard is an FHA loan. The FHA will back mortgages with down payments as little as 3.5%. While it sounds like a pretty amazing deal, it does come with a few caveats.

Since you'll be paying much less in your down payment, thus financing a larger loan amount, your monthly mortgage payments will likely be higher than if you used a larger down payment.

You'll have mortgage insurance which raises monthly costs as well. This mortgage insurance is purchased for you by the FHA and is subject to their rules. It's important to know that unlike a conventional loan, the PMI does not go away on an FHA loan.

FHA allows for a greater Seller Contribution (up to 6% of your purchase price), allowing you to come to the closing table with less money than a typical conventional loan.

FHA also allows for you to use gift monies for the acquisition of the property. This means that a family member who is willing to give you the money needed for the down payment or closings costs is acceptable.

3% Down Payment Program
Through Fannie Mae, home purchases are possible with just a 3% down payment. The 97% loan-to-value (LTV) purchase program allows homebuyers to purchase a single family home, condo, co-op, or PUD without coming up with a full 5% down payment as previous guidelines mandated and unlike FHA mortgages, there are no upfront mortgage insurance fees. Rates are based on standard Fannie Mae rates, plus a slight rate increase, but a buyer can greatly reduce their total upfront home buying costs and get into a home sooner.

Piggy Back or Blended Mortgages
A piggy back, or blended mortgage, allows for as little as a 5% down payment without the addition of PMI. This is achieved by financing your home with both a first and a second mortgage. This type of financing is a great option when you know that you will be in your home for long term as the second mortgage (or home equity line) can stay active for up to 20 years—allowing greater borrowing freedom while you own your home.

Other options
If you don't qualify or feel that any of these choices can work for you, there are still other ways that you can try to afford a down payment on a home. Some lenders will work with you to finance the down payment or lower it under certain terms and conditions.

Regardless of the program you use to purchase your home, it's important that you find a mortgage lender before you find a house. Your lender will walk you through the options that are available to you.

For more assistance through your first time as a homebuyer, visit Bethpage Federal Credit Union today.

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5 Factors Used to Calculate Your Credit Score

In order to get a mortgage, especially one with a low interest rate, you usually need to have an attractive credit score. The most common scoring model is the FICO score, issued by Fair Isaac Corporation. Scores range from 300-850—the higher, the better. Your score is calculated using data from your credit report, which is compiled by three bureaus: Equifax, Experian and Trans Union. A lender may check your score from all three bureaus or only one.

The following are the factors used to calculate your credit score:

1. Payment history (35%): If you make a late payment, your score will take a hit. The more recent, frequent, and severe the lateness, the lower your score. Bankruptcies, judgments, and collection accounts have a serious negative impact.
2. Amounts owed (30%): Carrying high balances on revolving debt (like credit cards) and personal loans, especially if the balances are close to the credit limits, will lower your score.
3. Length of credit history (15%): The longer you have had your accounts, the better.
4. New credit (10%): Having recent inquiries and opening new accounts can lower your score. However, all mortgage or auto loan inquiries that occur within a short period of time are considered just one inquiry for scoring purposes, and you accessing your report does not affect your score.
5. Types of credit used (10%): Having a variety of accounts, such as credit cards, retail accounts, and loans, boosts your score.

Reviewing your credit report regularly is a good idea, but it is particularly important to do so before seeking a mortgage. Even if you always make your payments on time and have a low level of debt, your credit report could contain score-lowering errors. Check your report at least 60 days before you plan to apply for financing, as it can take some time to resolve issues.