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Renting vs. Buying a Home

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The Credit Union can help you determine the right move. Contact us!
  • If you're currently renting but considering buying a home, we're here to help you make an informed decision. Buying a home is one of the biggest purchases you'll make, so take the time to weigh your options.

    Benefits of Purchasing a Home

    • Home loan rates are at historic lows
    • Monthly mortgage payments can be similar to or lower than rent payments
    • Tax deductions from the interest and property tax portion of your mortgage
    • The ability to build equity in your home over time
    • Pride of homeownership

    Benefits of Renting

    • Short-term financial commitment
    • Less money needed up front
    • More flexibility to change your mind on a location/property
    • You're not responsible for maintenance or other repairs

    Hear from Lou Manfredini

    There are many factors to consider in determining the right path for you. Take some of the uncertainty out of your decision with tips from homeownership expert, Lou Manfredini.

    We're committed to making sure you're comfortable with the home buying process—no matter how many questions you have or advice you need. Check out the Products and Resources and FAQs tabs for more information, or contact a Corporate Relocation Specialist at BCURelocations@bcu.org.

  • Loans and Services

    HomeAdvantage®

    Find a home and a real estate agent and earn an average of $1,545 cash back at closing.

    Get Started!

    Buying a Home

    In the market to purchase? We're here to help you throughout the process. Learn More

    Apply Now!

    HomeReady™

    Expanded eligibility and payment flexibility can now put home ownership within your reach. Learn More

    Get Started!


    Resources


    Articles

  • I don't think I'm eligible to apply for a home loan. Can you help me?

    Don't let uncertainties stop you from getting the home of your dreams. Contact a Corporate Relocation Specialist at BCURelocations@bcu.org and we'll talk through your situation. The following are often thought to be true, but are just examples of misconceptions:

    • My credit score needs to be 700 or higher
    • Recent graduates can't buy a home because of no work history
    • I need a 20% down payment
    • I have collections and slow payment history on my credit
    • I had a foreclosure or a short sale on a property


    How much money do I need for down payment?

    Your down payment can be as low as 3% of the purchase price. This typically applies to first time home buyers only, but in some instances you may still be eligible. If you are not a first time home buyer, the minimum down payment requirement is 5% of the purchase price. Program restrictions may apply.


    How much can I afford to buy?

    To figure out your budget, you have to take into consideration all the expenses involved; the principal and interest payment on the loan, real estate property taxes, hazard insurance (also known as a homeowner’s insurance policy), private mortgage insurance (if applicable), and association dues (if applicable). Your proposed housing payment and all other monthly debt payments (car loans, credit cards, personal loans, student loans, etc.) should not exceed 43% of your gross monthly income to qualify for a mortgage.


    What does my credit score need to be to get approved for the loan?

    We pull credit reports from all three credit reporting agencies–Equifax, TransUnion, and Experian. For our conventional loans, the mid FICO score needs to be at least 620. However, this does not guarantee the approval, as we are looking into many other factors on your loan. At the same time, having credit scores under 620 doesn’t disqualify you either. The underwriting team looks at the entire loan application to help make their decision..


    How much money will I need altogether to close on the property?

    Besides your down payment, you need to plan on paying for the closing costs which typically include an appraisal, credit report, application fees, processing fees, lender and/or owner’s title charges, city/state/county transfer taxes, recording fees, attorney fees, and possibly reserves for your escrow account. The Credit Union can estimate these fees for you, but we only determine the lender fees. All other closing costs are third-party fees and are based on amounts they have determined.

    Some loan approvals require that you have a certain amount in reserve based on your monthly payment. These reserves have to be in the form of liquid funds, but can include retirement and/or stock accounts, for example. A good rule of thumb is to prepare for around 1.5-2.5% of your purchase price.


    How long does it take to apply for a home loan?

    The application process takes only about 20-30 minutes and can be done over the phone or online. Make sure you have all your financial information handy, as well as the personal information of those that will be on the loan application.

    We suggest you start with the pre-approval. Determine how much you can afford and whether you qualify for that amount, then start the search for your new home. After signing the contract, we finalize the obtainable loan amount, rates, and terms available for your loan.


    Does it make sense for me to buy now or to keep renting?

    With rising rent prices and mortgage rates at historic lows, it can make more sense to buy now than ever before.


    Will I have to pay private mortgage insurance (PMI)?

    Any new conventional mortgage with less than 20% down payment will require Private Mortgage Insurance (PMI). There are many options where the PMI can be paid monthly or prepaid upfront by the borrower, but there are lender paid options too. PMI is not the same on all loans, and it's determined by the down payment, your loan amount, your loan term, and credit scores. Please contact us at BCURelocations@bcu.org for a quote.