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Homeownership: You Might Be Closer Than You Think

Whether it's your first or your next, home ownership is a big milestone for anyone. In a hot housing market like Seattle, the entire process—researching, shopping, financing, and moving in—can feel overwhelming. Sometimes, the hardest part is getting started.

Here at Seattle Credit Union, we believe everyone deserves a shot at owning a home. Many times, it's closer than people think.

Before you start down the path, be clear about your current and future financial situation. This'll give you an idea of what you can afford to put toward a mortgage payment.

  • Action: review your credit report to make sure there aren't any surprises, and that you can explain any negative records. 
  • Tip: You can get a free credit report once a year from all three major bureaus at

If your debt-to-income ratio is too high, lenders may be unlikely to extend you another loan. Your FICO score, a scoring model that helps lenders assess risk, comes into play here. The higher the score, the better your chances of securing a loan and a better interest rate.

  • Action: improve your FICO score by reducing debt, paying your bills on time, keeping a minimum number of credit lines open, or varying the types of credit you do have open.
  • Tip: You can significantly improve your FICO score in as little as six months. Start now!

Mortgage Loan Officers (MLOs)—sometimes referred to as Mortgage Loan Originators—are your first step in the home-buying process. An MLO's job is to help you clarify your goals, determine how much house you can afford, help you find the best mortgage and rate, and shepherd you through the process to closing.

  • Action: many financial institutions have MLOs in-house or work closely with a third-party team. If you're ready to get started, reach out to your financial institution first and inquire about being paired with an MLO.
  • Tip: Purchasing a home is a big step, and you should feel confident about the team you're working with. Trust is key, so if you don't feel good about the MLO you start out with, you're well-within your rights to search for a new one.

Buying a home takes a lot of coordination between a lot of people. Your MLO is there to guide you, but it's important to understand as much as possible about the process so you can make informed decisions each step of the way.

For example, you'll want to speak with your MLO about securing a pre-approval before house hunting. Pre-approvals require similar steps to an official mortgage application. If you're approved, the lender will tell you how much money you can borrow. With this in hand, you'll have a better idea of what homes you should be looking at. It also signals to realtors that you're a serious buyer, making you more competitive against other offers. 

There are oodles of special mortgage products, grants, and programs to help first-time homebuyers. Your MLO can educate you about your options, but it's good to do your own research, too. A few common of the most common include:

  • Federal Housing Administration (FHA) Loans. These are designed to help people with lower credit scores and require just a 3.5% down payment. These are offered by private lenders.
  • Veterans Administration (VA) Loans. These are for active and retired U.S. Military veterans and require no down payment or mortgage insurance.
  • HomeReady HomePath Mortgage. After they take a required homebuyer education course, buyers can receive 3% towards closing costs on their loan. The down payment requirement is also low, at 3%.
  • USDA Loans. These loans are designed for low-to-moderate income homebuyers in rural areas of the country. Most of the country is in an eligible location, so it's worth looking into. USDA Loans don't require a down payment, and mortgage insurance is slightly less than that of a FHA Loan.

Done correctly, homeownership can be one of the most powerful wealth-building moves individuals and families can make. Financial organizations also stand to benefit from the rise in homeownership, which is why so many programs exist to get people into homes.

If you've been deliberating about home ownership for a while, you may be surprised how attainable it can be. Do your research and connect with a Mortgage Loan Officer to see if now's the time to get started.&

Looking for more resources? Seattle Credit Union members can enjoy free online home-buying education and we welcome anyone interested to download our 11-Step Home-Buying Guide. Ready to connect with a Mortgage Loan Officer? We think ours are the best—give us a call at 206.398.5888.

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