How do I know how much home I can afford?
There are several factors that determine the loan amount and purchase price you can afford. For qualification purposes, lenders look at income, debt, assets (how much money you have for the down payment, closing fees, points, and other funds necessary to close your loan), as well as credit. There are many different loan programs with a variety of terms and rates. Some require lower down payments than others and offer more flexibility in credit and income. The best thing to do is to get pre-qualified so you know what loan programs you qualify for, the price range you can afford, and what your monthly payments will be. We will provide a pre-qualification at no cost. You can also use our industry-leading calculators to find out what your payments would be and determine a purchase price and loan amount that is comfortable for you.
How much money do I need to buy a home?
Traditional conventional financing requires a minimum down payment of 5% of the purchase price of the home; however, there are other programs available (such as our FHA program) that allow you to buy a home with as little as 3.5% down. In addition to the down payment, you should be aware that there are other fees associated with purchasing a home. For example, there are closing fees, pre-paid interest, and prorated items such as property taxes and homeowner's insurance. Call and speak with one of our Loan Officers to get a better idea what to expect.
Do I need a home inspection?
Although a home inspection is not required, it is a good idea to obtain the services of a professional qualified inspector to help you determine the condition of the home you are looking to purchase. A professional inspector will look for any structural issues as well as mechanical problems that may exist in the home that could cause problems in the future. In addition to a structural review, an inspector will also check faucets, toilets, appliances, and other items in the home to make sure everything is in working order. If something needs to be taken care of, you can address it with the seller prior to closing.
What type of documentation do I need for a purchase loan?
Standard documentation collected for a purchase transaction includes information regarding your income such as:
- paystubs covering the most recent 30 days,
- two (2) years of personal tax returns and business tax returns (if applicable),
- W-2s for the last two years, and
- asset information (such as bank or mutual fund stock statements, IRA statements, and 401K statements) covering the last 60 days and showing the source of funds for your down payment, closing fees, points, pre-paid items, and other things needed to close your loan.
How long does the purchase process take?
A typical period is 45 days. The time period defined on the purchase contract and agreed upon by both buyer and seller is usually what dictates when your loan closes.
What happens at the loan closing?
Typically, you will sign your loan documents at a designated settlement office such as a title company or attorney's office. In the presence of the signing authority, you will review and sign all your loan documents and then present a certified or cashier's check to pay the remaining down payment, closing fees and other applicable closing costs. You may also wire your funds directly to the title company. We will guide you through the process and advise you on what needs to be done when. Once the loan documents are signed, you are the proud owner of your new home. Don't forget to change the locks!