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First Time Home Buyers

Hello, my name is Kristin Thompson, and I’m a Mortgage Loan Officer at Alliance Bank. I’ve been in mortgage banking for six years now and love every minute of it. Being able to finance homes and make the American dream come to life is a true blessing. My goal is to create a smooth, enjoyable process and, overall, allow my customers to gain a long-term asset for their benefit. NMLS #1678656.

It’s no secret that there is a lot of documentation, paperwork, and verifying that comes with getting a mortgage, which can be intimidating at first… so where exactly do you start? 

Where to Start

Credit and verifiable funds are an essential part of the approval process.  Being a good steward of your liabilities by making on-time payments on your debts, having overall minimal debt, and saving money is ideally the primary keys to opening the door to loan approval.   Lenders are required to prove that with your credit history and employment history, you are able to pay back the loan you’re seeking approval for.

Prior to filling out a mortgage loan application, educate yourself on loan products.  There are multiple loan products available.  For example, a USDA loan might work better for your financial situation rather than a Conventional or FHA loan.  Research what each loan product requires for down payment, closing costs, and the benefits for you as a borrower.  If you’re unsure, the mortgage department can definitely assist you.

Also, investigate interest rates.  Keeping yourself in the know with what the market is doing and how interest rates are effected will help you succeed in the home buying process. 

Lastly, study closing costs.  Closing costs are fees required to close the loan transaction.  Some lenders may charge an origination fee while others may charge a processing fee or both.  Alliance Bank charges an underwriting fee for 1-to-4 family real estate transactions.  All other fees are required third party fees, such as the appraisal fee and title policy fee.  Knowing what to expect and what lenders charge is to your benefit in order to get the best overall deal.  

Prequalification

One smart thing to do before you start shopping for houses is to get prequalified. Seeking prequalification will let you know how much you can afford.  To get prequalified, you will need to complete a mortgage loan application.  Once the application is received by a loan officer and credit is conditionally approved, you will receive a conditional prequalification letter for your house hunting.  This letter validates the offer you may make on a house.  I do suggest finding a realtor, as they are very helpful during this time!*

The Process

Once you find the perfect house, your offer is accepted by the seller, and a sales contract is executed, the process of lending begins. The entire process typically takes about 30 days before closing is permitted, which is where you’ll sign the final documents, sealing your promise to pay the lender and securing yourself as owner of the property. 

The process includes verifications of income and funds for down payment, as well as your ability to repay the loan.  Your lender will also order items required for the loan, such as the appraisal, which is a written estimate of the market value of real or personal property prepared by a qualified appraiser. Title insurance is also required in order to guarantee title to the property. Once all items required from third parties are completed, the underwriting department reviews the file to ensure accuracy and compliance.  Lastly, closing will be permitted.  At closing, you’ll receive the keys to your home and officially title yourself as a homeowner!

Final Thoughts

In conclusion, first time homeownership is an exciting time in life because you’ve more than likely completed the biggest purchase you’ll ever make, which comes with great responsibility and even greater reward.  Many memories that you’ll cherish for a lifetime will be made with your closest family and friends; homeownership is just the start of your journey.

Are you ready to become a homeowner?

*Alliance Bank is not affiliated with any realtor or real estate company. Member FDIC. Equal Housing Lender.

Definitions

  • Liabilities – a thing for which someone is responsible, especially a debt or financial obligation.
  • Loan Products – created by a lender and offered to borrowers. It has a specific set of features and costs, which must be disclosed to consumers before they can be bound by its terms.
  • Interest Rates – the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
  • Closing Costs – all the costs associated with selling something, usually property, such as taxes, seller's fees, or registration fees.
  • Appraisal – an expert estimate of the value of something.
  • Title Policy – anything that provides a ground or basis for a claim.
  • Prequalified – qualify in advance to take part in something.
  • Closing – when the title to the property is conveyed (transferred) to the buyer.