Last month, we hosted a webinar, “Pathway to Homeownership,” which provided information designed to help you purchase your first home.
If you didn’t have a chance to attend, you can watch the on-demand video here. Please enter the passcode: home-2025 to play the video.
Here are some of the questions attendees asked, along with answers that can help you in your homebuying search. If you have questions about loans to buy a home, call 800.877.2345.
1. What is the difference between a starter home and a forever home?
Traditionally, a “starter home” is the first home you buy that fits your budget, which could be anything from a condominium to a mansion. A “forever home” is the home you plan on living in for the rest of your life. Yes, a starter home can be your forever home. However, many first-time buyers expect to stay in their first home for 2 to 5 years.* How long you stay in your starter home is entirely up to you, your financial and life situation.
2. Are there loans for fixer-uppers?
Yes. A fixer-upper loan covers the purchase price and renovation costs in one loan. You may require a special appraisal to estimate the home’s post-renovation value. Some of these loans are only available for people planning to live in the home; some have conditions that renovations must be completed within 12 months or less of the loan closing; many require you to have a FICO® Score of at least 620; others require HUD (U.S. Department of Housing and Urban Development) inspect the renovations to ensure it meets government standards. An experienced lender can review the many options and requirements with you.
3. What’s the benefit of the ARM rate?
An adjustable-rate mortgage (ARM) typically has a fixed starting rate for a term of 5, 7, or 10 years. After which, the rate is adjusted annually or semi-annually to the prevailing rates based on an industry benchmark rate, such as the U.S. Prime Rate, plus any margin your lender adds to the rate.
The key benefit of an ARM is that it enables you to get a lower initial rate than a fixed-rate loan, enabling you to qualify for a larger mortgage and stay within your housing budget. Another benefit is flexibility. If you plan to stay in the home for only a few years, you can enjoy lower monthly payments before the rate adjustment period begins. And if rates drop, your monthly mortgage payment will also drop.
Here’s an example. Imagine you have $400,000 mortgage at an intro rate of 7.06% for 5 years. Your monthly payment is $2,141. If the interest dropped by .75% in year 6, you would save $159 a month. However, remember that if the rates were to increase, you’d have a pretty big hit to your budget to cover monthly. One more thing, with an ARM, the rates don’t adjust once, they change throughout the life of the loan.
4. Do you have to pay property tax monthly? Is there a way to pay that annually?
Every state is different. In California, for instance, you can pay your property taxes in two payments per year, or the entire amount at once. If you have private mortgage insurance (PMI), your lender may collect a portion of your estimated annual property taxes monthly and pay the taxes on your behalf when they are due. For more information about PMI, read this blog.
5. Is a lender the same thing as a real estate agent or Realtor? Do you need both?
No, a lender and a real estate agent or Realtor are two different things. A lender, such as a bank or credit union, allows you to borrow funds to pay for the home, which you pay back with interest over time. A real estate agent or Realtor helps you find a house if you’re buying, or sell a house if you’re moving and with price negotiations. They also manage the contracts involved with the sale or purchase of a home.
6. How long of a timeline can I expect from the moment I have saved my down payment to the actual closing on a home?
Every situation is unique. How long will it take to find a home? How long will escrow take? Every state is different, but in California, escrow runs about 30 to 60 days. Escrow is the time allowed to complete all the necessary paperwork, inspections, appraisals, and to secure financing. You can negotiate the length of escrow during the buying process.
7. Does FIGFCU provide homebuyer education workshops?
We offer webinars (passcode: home-2025) on homebuying throughout the year. Another great way to get started is to visit our home financing webpage for links to mortgage calculators, get a rate quote, and pre-qualify for a loan. Our Home Rewards program connects you to a local realtor, can help you find a home, and save big with a purchase commission discount. To learn more, visit our web page or call 800.877.2345.
Final thoughts.
Whether you’re searching for your starter or forever home, considering a renovation loan, or seeking ways to lower your monthly payments, our home loan experts are your resource for making an informed homebuying decision. To take your next step toward homeownership, visit our mortgage webpage or contact us directly at 800.877.2345. Good luck with your home search.
*Meyer, Susan, “Average length of homeownership: Americans spend less than 15 years in one home.” TheZebra.com. Published 11 March 2024. Accessed 18 July 2025.
