Home Buying Guide

As one of the largest purchases most Americans will ever make, buying and owning a home takes commitment, research and sacrifice. Yet, it's worth the effort. Most people rate a home purchase as their best long-term investment.

How Much Can You Afford

Quick Tip

Don’t forget about the other costs of home ownership like insurance, property taxes, maintenance and repairs.

A general rule of thumb is you can afford 2½ times your annual income. Use our Home Affordability Calculator to determine how much you can afford.

As part of the qualifying process, lenders will usually assume you can afford to spend 28% of your total income on your mortgage, property taxes and homeowners insurance. Including these costs, your total debt (with auto loans, credit cards, student loans, etc.) should not exceed 36% of your total income.

The amount you can borrow and what you can afford are based on a number of factors including your down payment and qualifying ratios. While you may be able to get a large loan, make sure the payments fit into your budget so you don’t become “house-poor.” Use our Mortgage Payment Calculator to help determine the right price for you.

View our Buying a Home Module, an interactive learning experience in our Wellness Center, to learn all about what you should consider before buying a home.

Finding a Home

Once you’ve determined how much you can afford, the search for the right home begins. The average homebuyer looks at 16 to 25 homes before selecting one to buy. There are several factors to consider including price range, location, type of home, school district, just to name a few. The internet is a great research tool to see what homes are available, what they offer and how much they are selling for. An experienced real estate agent can help you target the right homes and can provide a wealth of information about each one and their neighborhood.

View our The Cost of a Mortgage Module, an interactive learning experience in our Wellness Center, to learn all the process, resources, and strategies to help you buy a home while sticking to a budget.

Costs & Expenses

In addition to securing a mortgage for the home, there are other costs you need to consider when purchasing a home:

• Down Payment: part of the purchase price paid in cash that is not included in the mortgage. It will be the most significant of your pre-purchase costs and is usually around 5% of the purchase.
• Earnest Money: a deposit put down to demonstrate your seriousness about buying a home. It becomes part of the down payment if the offer is accepted.
• Closing Costs: costs above the sale price of the property that must be paid to cover the transfer of ownership at closing. Examples include attorney fees, title insurance, appraisals and property taxes.
• Post-Purchase Reserve Funds: generally two to three months worth of housing expenses can give you peace of mind against potential cash flow problems after purchase and may be required by the lender.
• Other Costs of Ownership: these would include such things as homeowners insurance, property taxes and ongoing maintenance and housing expenses.

How We Can Help

Mortgage Solutions - Palmetto Citizens offers a variety of mortgage options, including options for First Time Buyers. Contact our qualified mortgage representatives today to discuss the solutions available to you.

Zogo Financial Education App – Palmetto Citizens has partnered with Zogo, a free financial education app that pays you to learn! Just download the app, play through the short modules, and earn gift cards to your favorite brands just for learning about financial topics.

Financial Education Center – View our "What Mortgage Can I Afford?", an interactive module in our Wellness Center, to learn all about the home buying process.

Calculators – We offer a variety of online calculators to help you better manage your money and make wise financial decisions.

Free Financial Counseling – All members have free access to GreenPath Financial Wellness a money management and financial education counseling service. Certified financial counselors are available to assist you with a variety of financial needs, including home buying.

Preparing to Buy Module - Take this short Home Buying online course, offered through GreenPath Financial Wellness, to help ensure you are ready before you begin the home buying process.

Discounted Property Insurance - Through TruStage^® Insurance, you can receive up to a 5% discount off your homeowners, renters or condo coverage with a leading insurance provider just by being a credit union member.^* Visit our TruStage Insurance Page to see additional insurance coverage options.

*TruStage Home Insurance Program is made available through TruStage Insurance Agency, LLC and issued by leading insurance companies. To the extent permitted by law, applicants are individually underwritten; not all applicants may qualify.