Money Moves to Become a Homeowner

September 03, 2023

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. 

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.

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.

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™ loan1 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.

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 Program®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 Savings2 an account that allows you to earn dividends on the money you save for a down payment.


  1. All loans subject to approval. Programs, rates, terms and conditions subject to change without notice. 2. My Home Savings share certificates opened before 2/15/2024 are variable rate and subject to change without notice. Share certificates opened after 2/15/2024 are fixed rate. Limited to Members who are buying a home and participating in SchoolsFirst FCU Home360®; limit one per Membership. 12-month term with a required opening deposit of $250. Additional deposits allowed to the maximum balance of $150,000. At maturity the account is closed and the balance is automatically transferred to your primary share account. Partial withdrawals not permitted and will result in closure of the share certificate. Any withdrawals that are not used for a home purchase with SchoolsFirst FCU will be subject to a penalty. Fees could reduce earnings on the account. See SchoolsFirst FCU's Disclosure & Agreement of Terms and Conditions brochure for additional details about the My Home Savings Share.