Preparing for Homeownership in Today’s Market

Buying a home can feel exciting, overwhelming, and honestly, a little intimidating — especially in today’s market. Between rising home prices, fluctuating interest rates, and limited inventory in many parts of Maine, it is easy to wonder where to even begin.

Most people think the homebuying process starts by scrolling through listings online or attending open houses. But one of the smartest first steps actually happens before you seriously shop for a home: understanding your financing options and talking with a mortgage lender.

“Too many buyers fall in love with homes before they fully understand what fits comfortably into their budget,” says Lisa Bellefleur, Vice President of Mortgage Services at Town & Country Federal Credit Union. “Starting with a mortgage conversation helps buyers shop with confidence and avoid unnecessary stress later.”

Whether you are a first-time buyer or returning to the market after several years, understanding the mortgage process can help you make smarter financial decisions and feel more prepared every step of the way.

Understanding Today’s Mortgage Basics

A mortgage is simply a loan used to purchase a home. In exchange for lending you the money, the lender holds an interest in the property until the loan is repaid.

The most common mortgage remains the 30-year fixed-rate loan. With this option, your interest rate stays the same for the life of the loan, which means your principal and interest payment remains predictable month after month.

Some buyers also choose 15-year or 20-year loans, which often come with lower interest rates but higher monthly payments because the repayment period is shorter.

Adjustable-rate mortgages (ARMs) have also become more popular again in 2026, especially for buyers who expect to move or refinance within several years. These loans typically start with a lower introductory rate before adjusting later based on market conditions.

“There is no one-size-fits-all mortgage,” Bellefleur says. “The best loan is the one that works for your long-term goals, your monthly budget, and your comfort level.”

What Lenders Look at in 2026

Mortgage approval is about more than just your credit score. Lenders take a full-picture view of your finances to determine your ability to repay the loan responsibly.

Some of the key things lenders review include:

• Your credit score and payment history
• Your income and employment stability
• Existing monthly debt obligations
• Savings and available assets
• Your debt-to-income ratio
• The amount available for a down payment and closing costs

While many buyers still believe they need a 20% down payment, that is no longer true for many loan programs. Some conventional loans allow down payments as low as 3%, while certain government-backed programs may offer even more flexibility for qualified borrowers.

“Saving for a down payment can feel overwhelming, especially for younger buyers,” says Bellefleur. “But many people are surprised to learn there are programs and options available that can help make homeownership more achievable.”

Credit scores remain important, but buyers do not necessarily need perfect credit to qualify. In general, higher credit scores help borrowers secure better interest rates and lower monthly payments.

Before applying, it is smart to review your credit report for errors and work on paying down high credit card balances. Many lenders recommend keeping credit utilization below 30% of your available limits.

Town & Country members can also monitor their credit score directly through online banking using Credit Score by SavvyMoney.

Why Pre-Approval Matters More Than Ever

In today’s housing market, pre-approval is no longer optional — it is essential.

Getting pre-approved means a lender has reviewed your income, assets, debt, and credit profile to determine how much you may qualify to borrow. It also gives sellers confidence that you are a serious buyer.

“In competitive markets, sellers want to know buyers are financially prepared,” Bellefleur explains. “A pre-approval letter can strengthen your offer and help you move quickly when the right home comes along.”

Pre-approval also helps buyers establish realistic expectations before shopping. Just because you qualify for a certain amount does not necessarily mean you should spend that much.

A good lender will help you understand what payment feels manageable based on your lifestyle, goals, and other financial priorities.

Budget Beyond the Mortgage Payment

One of the biggest mistakes first-time buyers make is focusing only on the mortgage payment itself.

Homeownership comes with additional expenses that renters may not think about, including:

• Property taxes
• Homeowners insurance
• Utilities
• Maintenance and repairs
• HOA fees, if applicable
• Emergency home expenses

“Your mortgage payment is only one part of the equation,” says Bellefleur. “We encourage buyers to leave room in their budget for the unexpected because homes always require ongoing maintenance.”

Experts often recommend creating a home maintenance savings fund specifically for future repairs and upgrades.

Avoid Financial Changes Before Closing

Once you are under contract and approved for financing, consistency is critical.

Avoid making major financial moves before closing, including:

• Opening new credit cards
• Financing furniture or appliances
• Changing jobs
• Missing bill payments
• Taking on new debt

Lenders typically verify your financial information again before final loan approval. Even small changes can affect your eligibility.

Homeownership Is Still Possible

While today’s housing market presents challenges, homeownership remains achievable for many buyers with the right preparation and guidance.

The key is starting early, understanding your finances, and working with professionals who can help you navigate the process.

“Buying a home is one of the biggest financial decisions people make,” Bellefleur says. “The more informed and prepared you are upfront, the smoother and more rewarding the experience can be.”

If you are thinking about purchasing a home in Maine and have questions about mortgages, refinancing, or loan options, Town & Country Federal Credit Union’s Mortgage Team is here to help you explore your options and take the next step with confidence.