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Buying a Home: What to Save and How to Get There


Your Down Payment: You Don’t Need 20%

It’s a common misconception that all lenders require a down payment of at least 20% of the price of the home. SLFCU can help qualified first-time homebuyers purchase a home with a down payment as low as 3% in most markets. The down payment for qualified buyers who have purchased a home before can be as low as 5% in most markets.*


When you buy a home, there are some mortgage-related fees you will pay and some fees the seller will pay. Many of these can be negotiated when you make an offer, but you will generally have to pay some closing costs.

Your total closing costs can be much lower if you opt for SLFCU’s 5/5 Adjustable Rate Mortgage rather than a fixed rate mortgage. An adjustable rate mortgage is a smart choice in many situations. Talk to a loan advisor about your options.


An escrow account is established by a financial institution on your behalf to hold funds for your property taxes and insurance. Your monthly payment will include about 1/12th of your estimated annual tax and insurance bills, and these amounts are held in your escrow account. When these bills are due, your financial institution pays them with the funds in that account.

However, because you must be covered by homeowner’s insurance when you take ownership of your new home, you need to pay your entire first year of homeowner’s insurance up front. In addition, you will need to make an initial escrow deposit at closing.


Build a budget so you know where all of your money is going, and look for places where you can reduce expenses. You could cancel cable TV, cut back on dining out, or get a new quote on your car insurance.

Also consider larger changes. Could you move to a cheaper apartment or get a roommate? Would a part-time or second job fit your schedule? 


Even if you have just started saving for your down payment, we encourage all potential homebuyers to meet with a home loan officer. We can help you determine how much you should save, provide advice about improving your credit, and share helpful resources like the HomeAdvantageTM program. Our loan officers do not work on commission and our goal is to help you understand the entire process from start to finish. To talk to a home loan officer or set up an appointment, call 505.237.7161 or 800.947.5328 x7161, or send an email to

*Qualified homebuyers could purchase a home with a 3% or 5% down payment under SLFCU’s “piggyback” program: a first adjustable rate Smart Value 5/5 home loan for 80% of the value of the home in conjunction with a second adjustable rate 5/5 home loan for up to 17% more of the value of the home.

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