Almost half of young adults with student loan debt say it is hindering them from buying a house, according to a survey by NeighborWorks America. While student loan debt can be a concern, another study shows that, for some, it isn’t interfering with their home-buying plans at all. Four out of 10 millennials still plan to buy a house within five years, according to Origination News.

If you’re looking to buy your first home you should understand:

* The difference between being prequalified and preapproved. Prequalification simply involves a rough calculation of the mortgage payment you can afford. A US Community Credit Union Mortgage Loan Officer can help with this. Preapproval means you’re essentially good to go. You formally apply for the mortgage and pay an application fee. The lender determines that you are eligible for a mortgage of a certain amount. It’s called preapproval rather than approval because, before making a final commitment, your lender must verify your information regarding employment and salary.

* The difference between a fixed-rate mortgage and an adjustable-rate mortgage. With a fixed-rate mortgage the interest rate stays the same throughout the life of the loan, typically 15, 20, or 30 years. Your monthly payment will remain the same during that time. With an adjustable-rate mortgage the interest starts at a lower level and then may go up or down at specified intervals. A lender at US Community Credit Union can help you determine the best option for you.

* The difference between an appraisal and inspection. An appraisal determines a property’s market value. An objective appraisal assures the lender that the property’s value is at least equal to the mortgage amount. Note that a real estate agent’s market valuation is not equivalent to a formal appraisal. A home inspection examines the condition of the house and its mechanicals. The purpose is to protect you, the buyer, from nasty surprises. Hire a professional inspector and ask for references.

* Closing costs. No later than three days before closing, your lender will provide a statement showing you the final figure and a breakdown of all the costs (you get an estimate shortly after your loan is approved). Look over the statement to be sure all is in order. Usually, you’ll need to provide a cashier’s or certified check for the closing amount (plus the down payment) at the closing.

* Insurance needs. If you own a house, you have the potential to suffer property damage or liability loss. Ask the professionals at USCCU and your insurance agent about homeowners insurance, private mortgage insurance, title insurance, mortgage life insurance, and flood insurance. Insurance needs will vary for each homeowner.

Contact US Community Credit Union today for help. Stop by or call 615-256-8712.

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