Usaa bank | buy a home

A mortgage is a loan you get from a lender like USAA Bank to finance a home purchase or to refinance your current home. By taking out a mortgage, you promise to repay the money you've borrowed at a certain rate. The home you purchased or refinanced is used as collateral.

Your mortgage payment usually includes principal, interest, property taxes and homeowners insurance premiums. Buying and owning a home also involves other expenses beyond a mortgage payment that you'll want to plan for. These expenses might include things like closing costs, private mortgage insurance (PMI) — in most cases, this is required if your down payment is less than 20% of the purchase price of the home — and ongoing home maintenance and improvements.

Whether you're a first-time buyer or it's been a while since you've purchased a home, getting a mortgage can sometimes be daunting. Here's a step-by-step guide to understanding your homebuying journey.

• Make sure you have sufficient funds available for the down payment and closing costs.
• Determine the mortgage that's right for you.
• Apply for a mortgage preapproval.^{See note See Note 8}
• Work with your real estate agent to put an offer on the property you want to buy.
• Once you've found a home, complete the mortgage application.
• Work with your USAA Bank loan officer who will walk alongside you as you prepare for things like a property inspection, a review of loan documents, closing costs and more.

In general, the higher your credit score, the better the interest rates you'll qualify for. If you know you're going to buy a home in the next year, check your credit report now. If you see errors or things you don't recognize, take steps to contest them as it may quickly boost your credit score.

Contrary to popular belief, you don't need a 20% down payment to buy a house. Some mortgages allow lower down payments, like VA loans, 30-year conventional loans and FHA loans.

A larger down payment may also help you qualify for a lower interest rate, and if you make a 20% down payment, you might not need to pay for things like private mortgage insurance (PMI) through the life of the loan.

When you ponder the cost of a house, it's easy to fixate on the purchase price and your mortgage payment. But the total cost of owning a home goes well beyond that. If you take on too big of a commitment, you could put yourself and your financial goals at risk.

Earnest money (usually 1% to 2% of the purchase price), down payment, closing costs (generally 2% to 5% of the purchase price), moving expenses, nesting and ongoing expenses like payments and homeowners association dues could all be factors.