Navigate homeownership with confidence and informed choices
Buying a home is one of the biggest financial decisions most people will ever make. From saving for a down payment to navigating interest rates and deciding when to refinance, understanding the process is essential to making confident choices.
Through our partnerships with trusted local lenders like Mechanics Bank and member-focused institutions like BECU, UW employees can access expert guidance, educational workshops, and preferred rates to make homeownership more achievable and sustainable.
Is homeownership right for you?
The first step in the home-buying journey is deciding whether it’s the right move for your lifestyle and goals. Owning a home can help you build equity and stability, but it also comes with responsibilities that renting doesn’t, such as maintenance, taxes and potential market fluctuations.
Ask yourself:
- How long do I plan to stay in the area?
- Can I afford ongoing costs like insurance, utilities and repairs?
- Is my credit score strong enough to qualify for a favorable mortgage rate?
If you expect to move within a few years, renting may offer more flexibility. But if you plan to stay for the long term, homeownership can be both emotionally and financially rewarding.
Your readiness depends on your personal finances, stability and goals, not just interest rates or trends.
Preparing financially to buy
Before meeting with a lender, it’s important to assess your full financial picture. Start by reviewing your credit report and checking your debt-to-income ratio, the percentage of your income that goes toward monthly debt payments. Most lenders prefer it below 43%.
Next, evaluate how much you can afford. As a rule of thumb, your monthly housing payment (including taxes and insurance) should not exceed 30% of your gross income.
Saving for a down payment is another key step. While 20% is often cited as the standard, there are many programs that allow for lower down payments, some as low as 3% for qualified buyers. It’s also worth budgeting for closing costs, which typically range from 2–5% of the home’s purchase price.
Understanding mortgage types
Not all loans are created equal, and choosing the right mortgage can save you thousands over time.
- Fixed-Rate Mortgage: Your interest rate stays the same for the entire loan term (usually 15 or 30 years), providing predictable payments.
- Adjustable-Rate Mortgage (ARM): The initial rate is lower, but it can fluctuate after a set period. These can be useful for buyers who plan to move or refinance before adjustments begin.
- FHA and VA Loans: These government-backed options can offer lower down payments and more flexible credit requirements.
- Jumbo Loans: Used for homes that exceed the standard lending limits in high-cost areas.
Down payment and assistance programs
UW employees in Washington State may qualify for assistance through programs like:
Washington State Housing Finance Commission (WSHFC) – Offers down payment assistance loans and mortgage credit certificates for eligible first-time buyers.
Mechanics Bank Affinity Home Loan Program – Provides closing cost savings and homebuyer education to UW employees.
BECU First-Time Homebuyer Grant – Offers up to $7,500 toward down payment or closing costs for eligible members.
Remember, assistance programs change frequently, so checking with a lender before starting your search ensures you don’t miss available opportunities.
When to refinance
Refinancing can be a smart strategy if it helps you reduce your interest rate, lower your monthly payment, or pay off your mortgage faster.
You might consider refinancing if:
- Interest rates have dropped at least 1% below your current rate.
- Your credit score has improved since your original loan.
- You want to switch from an adjustable-rate mortgage to a fixed rate for stability.
- You need to access equity for home improvements or debt consolidation.
Building equity and managing home costs
Regular maintenance, timely mortgage payments and smart updates can all increase your home’s value over time.
Consider setting aside 1–2% of your home’s value annually for maintenance and repairs. This cushion prevents surprises and keeps your investment strong.
As you pay down principal and your property appreciates, you build equity—the portion of the home you truly own. That equity can be leveraged carefully through home equity loans or HELOCs, but always approach borrowing against your home with caution and clear purpose.
Watch and learn
Find a variety of webinar recordings in our Financial Education playlist on YouTube.