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Insider Tips on Homebuying from Actual Lenders

Homebuying can vary from person to person. Whether you’re a first-timer or an old pro, the market can change, your financing options can change and your budget can shift from home-buy to home-buy.

Best to leave it to the pros—here are five homebuying tips from Sioux Falls Federal Credit Union’s (SFFCU) own lenders.

1. Buy What You Can Afford.

One of the biggest mistakes I see homebuyers make is buying more home than they can afford.  I would recommend determining how much you can afford for a monthly payment—including taxes, insurance and mortgage insurance—prior to being prequalified. 

I find that many times you will be prequalified for a much higher payment than you would like to make.  Take the time to go through your budget to find your payment “sweet spot” so you can truly enjoy homeownership.

-Dave Kowalczyk, Mortgage Loan Officer

2. Pay Attention to Fees.

If you are a first-time homebuyer and you are paying a one percent origination fee, you are paying too much!  Why, you ask?  Because, at SFFCU, the most you will ever pay for an origination fee on a South Dakota Housing Development Authority (SDHDA) First-Time Homebuyer loan is 0.75 percent of your loan amount. 

The industry standard is an origination fee of one percent of your loan amount.  Many lenders will charge a processing/underwriting fee over and above the origination fee—SFFCU charges none.  If you are in the market for a home purchase and are a first-time homebuyer, I would highly recommend taking advantage of your existing membership or starting a new membership today.  Saving you money is what we do!

-Dave Kowalczyk, Mortgage Loan Officer

3. Get Preapproved.

With the market the way it is right now, be sure to stop in and get a preapproval.  You want to be ready to put in an offer before another buyer beats you to the punch.  We can help you with that by getting you and/or your realtor a preapproval letter up front so that your offer and negotiations are taken seriously. 

-James Nytroe, Mortgage Loan Officer

4. Avoid Unnecessary Changes.

It is very important not to change anything throughout the process.  Even minor things like transferring money between accounts or making large deposits will make for more verifications in the financing process. Changing jobs could postpone a closing, because there are requirements for how long you must be at your current job. 

Also, do not make any major purchases.  If you buy things on credit, it will impact your credit score and also your debt-to-income ratio. This could change your qualifying status or rate.  Keep making all your current payments on time, and everything will work out!

-Tim Wermers, Mortgage Loan Officer

5. Prepare Your Paperwork.

There are a few key documents you need to bring with you when you’re looking to getting preapproved for a mortgage. Most importantly, you will need:

  • Two most recent paystubs
  • Two most recent years of tax returns and W2s
  • Two most recent months of bank and retirement statements

If it applies to your situation, you will also need to provide copies of:

  • Divorce decree/child support agreement
  • Bankruptcy discharge, if you’ve filed bankruptcy within the past seven years

-Tyana Viss, Mortgage Loan Officer

Talk to us

If you are in the market for a home, one of our amazing mortgage loan officers is here to help you find the best-fit solution. Get in touch to get started.

Categories: Personal