Buying a Home Guide

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Identify which guide is best for your home buying experience.

Not sure what you want in a house? Check out our checklist to help prioritize your future home goals.

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First Time Buyer

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Building a Home

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Renovating a Home

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Financial Factors

Understanding Costs Associated With Homeownership

Understand the costs of homeownership by filling out these easy worksheets.

Calculate One-Time Fees Calculate Homeownership Expenses

Down Payment Expectations

Learn More

Applying For A Mortgage

We have all heard that getting a mortgage loan can be challenging, and the amount of paperwork can be daunting. You will have a few important decisions to consider right at the beginning of the application. Fortunately, a little pre-planning on your part can greatly help reduce the stress.

Follow these three steps to start the process smoothly. These are the minimum requirements for an approval on a mortgage application.

STEP 1

Review Your Credit Report.

First, review your credit report and clear up any derogatory items or incorrect data.

STEP 2

Verify Last 12 Months’ Income.

Second, be able to provide verification of all income you plan to use in your application for at least the last 12 months.

STEP 3

Confirm Down Payment Funds.

Be sure you have sufficient funds to be able to afford the down payment.

Mortgage FAQ

What is the first decision to consider for a mortgage loan?

The first step is to determine the type of mortgage you want. Do you want an adjustable-rate mortgage (ARM), or do you want a fixed-rate loan? The difference is that an ARM’s rate can change over time after an initial fixed period. A fixed-rate loan is fixed for the entire term of the loan for whatever term you decide. ARM rates are usually lower than fixed loan rates initially, leading to lower monthly payments in the beginning for ARM loans. Choosing the best option for your situation requires considering several factors, including how long you plan to stay in the home.

Are there other options to consider for mortgage loans?

Another option is whether to pay points or fees to lower your rate. When you opt to pay upfront fees, lenders will lower the interest rate, which can lower your monthly payment amount. You also need to consider how long your rate can be locked once you are approved. The rate might be higher, or there might be a fee for a longer rate lock term. A final option to consider is the amount of down payment you will need, which can be as low as 3% for some loan types. If you have 20% or more for a down payment, you can possibly avoid paying private mortgage insurance (PMI).

How can you avoid a mortgage loan being stopped at or within a week of closing?

Don’t take out other new loans after being pre-approved for the mortgage loan because it can lower your credit score. Most lenders require a recent credit report, and the new score could disqualify you for the mortgage. This is one of the main reasons mortgages are stopped at or near closing. A good rule of thumb to follow is not to make any drastic changes to your financial situation while attempting to buy a new home and being approved for a mortgage.

Understanding Costs Associated With Homeownership

Understand the costs of homeownership by filling out these easy worksheets.

Calculate One-Time Fees Calculate Homeownership Expenses

Down Payment Expectations

Learn More

Applying For A Mortgage

We have all heard that getting a mortgage loan can be challenging, and the amount of paperwork can be daunting. You will have a few important decisions to consider right at the beginning of the application. Fortunately, a little pre-planning on your part can greatly help reduce the stress.

Follow these three steps to start the process smoothly. These are the minimum requirements for an approval on a mortgage application.

STEP 1

Review Your Credit Report.

First, review your credit report and clear up any derogatory items or incorrect data.

STEP 2

Verify Last 12 Months’ Income.

Second, be able to provide verification of all income you plan to use in your application for at least the last 12 months.

STEP 3

Confirm Down Payment Funds.

Be sure you have sufficient funds to be able to afford the down payment.

Mortgage FAQ

What is the first decision to consider for a mortgage loan?

The first step is to determine the type of mortgage you want. Do you want an adjustable-rate mortgage (ARM), or do you want a fixed-rate loan? The difference is that an ARM’s rate can change over time after an initial fixed period. A fixed-rate loan is fixed for the entire term of the loan for whatever term you decide. ARM rates are usually lower than fixed loan rates initially, leading to lower monthly payments in the beginning for ARM loans. Choosing the best option for your situation requires considering several factors, including how long you plan to stay in the home.

Are there other options to consider for mortgage loans?

Another option is whether to pay points or fees to lower your rate. When you opt to pay upfront fees, lenders will lower the interest rate, which can lower your monthly payment amount. You also need to consider how long your rate can be locked once you are approved. The rate might be higher, or there might be a fee for a longer rate lock term. A final option to consider is the amount of down payment you will need, which can be as low as 3% for some loan types. If you have 20% or more for a down payment, you can possibly avoid paying private mortgage insurance (PMI).

How can you avoid a mortgage loan being stopped at or within a week of closing?

Don’t take out other new loans after being pre-approved for the mortgage loan because it can lower your credit score. Most lenders require a recent credit report, and the new score could disqualify you for the mortgage. This is one of the main reasons mortgages are stopped at or near closing. A good rule of thumb to follow is not to make any drastic changes to your financial situation while attempting to buy a new home and being approved for a mortgage.

How To Improve Your Credit Score

Anyone who currently has or has had credit cards or loans has a credit history with the credit reporting agencies. These agencies provide credit reports upon request. A credit report contains information about where the person works and lives and how they pay their bills. It also may show whether they have been sued, arrested or have filed for bankruptcy. Businesses use this information to evaluate applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA).

Getting and maintaining credit is a lot like exercising to keep your body healthy and fit – it takes a while to get to your goal, and once you reach it, you want to stay there.

  • Don’t try to establish credit until you have income from a job or steady allowance.
  • Open a checking account. Keep track of what you spend and make sure you have the funds in your account to cover all the checks you write.
  • Before applying for credit, get into the habit of depositing a portion of your income into savings. This will help show your creditworthiness.
  • Apply for a credit card. It often helps to apply for your first credit card with your parent or guardian as a co-signer. Once an application is accepted, be sure to pay your credit card off each month. This requires discipline on your part, but it is an important step in staying out of debt.
  • Pay all bills on time and do not exceed the credit limit on your card.
  • Once your creditworthiness has been established, you will receive many offers for additional credit cards. Avoid having too many!

Following these tips will help you improve and maintain good credit. Understand the importance of establishing good credit BEFORE you begin establishing your credit history!

Your Credit Score With FORUM

Did you know your financial well-being has an impact on your overall physical health? It’s true! Let FORUM help you stay financially and physically healthy with our free Financial Wellness Check.

Short on time? No worries, you can schedule an appointment in one of our branch locations or by phone. FORUM will review your credit report with you (at no cost to you) to help you create a budget, find areas of potential savings, look for consolidation opportunities and provide overall financial wellness tips.

Schedule Your Free Financial Wellness Check or call us at 317-558-6277.

Get Pre-Approved For A Mortgage With FORUM Credit Union

Find Out How

Preparing For Closing

File folder with papers

Documents You Need For Closing

Below are the most common documents an underwriter will request for review. If a borrower’s work history is less than 2 years (such as a recent college graduate) or if the borrower is self-employed, there may be additional documents requested during the process.

  • Valid Picture ID (such as a state driver’s license)
  • 2 Recent Paystubs – must show year-to-date (YTD) earnings
  • W-2 (from past 2 years)
  • Federal Tax Returns - including all schedules (from past 2 years)
  • 2 Recent Months’ Bank Statements (including all pages)
  • 2 Recent IRA/401K Statements (if applicable)

Download The Mortgage Checklist

Should I Refinance My Home?

Are you thinking about refinancing your home? If so, there are a lot of items to consider when making this decision.

There are several reasons that it may make sense for you to refinance your mortgage. In the current market, you may be able to refinance to a lower rate. Maybe you’d like to have a lower monthly mortgage payment to free up some extra cash. You may also want to shorten the length of your loan term to pay off your home earlier. Consolidating debt by refinancing can make sense as well.

Although refinancing may seem like a good idea, it’s important to remember that it doesn’t make sense for everyone.

Here is a list of questions to ask before deciding whether a refinance is right for you:

Is your monthly payment straining your budget?
Has your credit score improved?
Are you currently earning a higher income?
Are you in an adjustable-rate mortgage?
Do you need to consolidate debt?
Are you planning on staying in your home?

If you do choose to refinance, here are some things to consider:

What are the new loan terms?
What is the new rate?
What would be the loan amount, and how long is the repayment period?
Compare these items with your current loan terms. What are the costs associated with refinancing?
This may include origination fees, application fees and a home appraisal fee.
How long will you remain in the property?

Using a mortgage calculator is a good place to start to help you determine if refinancing is right for you. Consider talking with a FORUM Mortgage Specialist about these items and more to make an informed decision about refinancing.

Determining When You Should Be Using Your Home’s Equity

Visit our Mortgage Center to get a rate quote, apply for a mortgage, check the status of your application and more.

View Checklist Learn More About A Home Equity LoanExt

First-Time Homebuyer Tips

Talk To Us

To apply for a mortgage or get answers to questions, call our Mortgage Specialists at 317-558-6160 or 866-367-8600 or email us at forummortgage@forumcu.com

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