Money Moves to Become a Homeowner


Becoming a first-time homeowner can be challenging, but developing a game plan can help you get there faster than you think. Here are some money moves to set you up for home-buying success.

Get Real With Your Finances

It’s important to know how you spend, save and use your credit. Carrying too much debt or lacking a savings strategy can hinder your plans, so you’ll need to create a budget. For instance, NerdWallet’s online budget worksheet uses the 50/30/20 budgeting method, suggesting that 50% of your income goes toward your needs, 30% toward your wants and 20% toward savings and debt repayment. Read How to Create and Stick With Your Financial Plan for more tips to improve your money management skills.

Boost Your Credit Score

The higher your credit score, the lower the interest rates you’ll enjoy when applying for a mortgage loan. If you examine what makes up a credit or FICO score, your payment history and the amount of credit you use are the two most important aspects of your overall score. Late payments or maxing out your credit can quickly lower your score and borrowing becomes more costly. Be sure to pay your credit accounts on time, every time, and get your credit utilization down to 30% to get the best rates.  An excellent credit score ranges from 740-850, so aim for the mid-700s. And if you’re close to purchasing your home, avoid applying for new credit including getting big-ticket items such as a car or large appliances because this will immediately drop your score.



 Don’t Avoid Using Credit Altogether

Some folks are wary of using credit cards because they don’t want to fall into a debt spiral, but according to Experian, having one or two in your wallet makes financial sense, especially if you’re considering buying a home. If you use a credit card wisely, make small charges and pay off your balance in full each month, you’ll build a strong credit history and qualify for the most competitive loan rates. To learn more read Do You Really Need a Credit Card?1

Turbocharge Your Savings

When you commit to the discipline of saving more, look for accounts that yield higher interest rates, such as money market accounts. Next, set up automatic payroll transfers to your designated account and don’t connect it to your checking account to avoid dipping into it. You may also want to consider a share certificate. A share certificate works like a bank’s certificate of deposit, offering higher dividend rates than regular savings accounts.  Learn more about share certificates.

You can also find creative ways to add to your savings by taking on a part-time job, selling items you don’t use anymore or if you’re a two-car family, getting by on one if it’s feasible or trading in an expensive car for one that’s less costly.

Find Ways to Save for a Down Payment

According to a report from the National Association of Realtors, 72% of first-time homebuyers made a down payment of 6% or less. And while this is counter to the standard down payment rule of 20%, it still means having a substantial amount in savings. There are many mortgage solutions on the market today, including our SchoolsFirst HomeAccess™ loan2 that features a low down payment and reduced private mortgage insurance. There are also more than 2,400 homebuyer assistance programs available that have helped consumers get into a home.

Understand the True Cost of Ownership

When you become a homeowner, it’s important to be aware of the extra costs you never had to think about as a renter such as property taxes, homeowner’s insurance, utilities, possible homeowner association fees, and property repairs and maintenance. According to a Bankrate survey, the average homeowner spends approximately $2,000 on home maintenance annually. Many people opt for home warranties, which can repair and replace appliances and major systems such as your heater or air conditioner. For more information about home warranties, read The 10 Best Home Warranties of 2021. 3

Get Expert Advice

One of the benefits of Membership is getting financial guidance when you need it. A SchoolsFirst FCU real estate consultant can discuss your finances and help you develop ways to work toward your goal.  When you join the SchoolsFirst FCU Home360 ProgramSM you’ll get the expertise of both your loan consultant and a participating real estate agent. In addition, to valuable rebates, you can enroll in My Home Savings3 an account that allows you to earn dividends on the money you save for a down payment.






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  1. When you click on external links, you are linking to alternate websites not operated by SchoolsFirst FCU, and SchoolsFirst FCU is not responsible for the content of the alternate websites. The fact that there is a link from SchoolsFirst FCU’s website to an alternate website does not constitute endorsement of any product, service, or organization. SchoolsFirst FCU does not represent either you or the website operator if you enter into a transaction. Privacy and security policies may differ from those practiced by SchoolsFirst FCU, and you should review the alternate website’s policies
  2. 2. All loans subject to approval. Programs, rates, terms and conditions subject to change without notice.
  3. Variable rate, subject to change daily at our discretion. Limited to existing Members who are buying a home and participating in SchoolsFirst FCU Home360℠; limit one per Membership. A withdrawal within the first six calendar days after opening incurs an early withdrawal penalty of seven days’ dividends. Thereafter, early withdrawals are subject to an early withdrawal fee of $10 and closure of the share; the $10 fee will be waived if the full balance is used for a home purchase. Fees could reduce the earnings on the account. Additional deposits allowed to the maximum balance of $50,000. See SchoolsFirst FCU’s Disclosure & Agreement of Terms and Conditions brochure for additional details about Share Savings Accounts. Rates and program valid as of date and subject to change.

Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or GreenPath Financial Wellness counselor who can help tailor a solution for you.

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