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Homebuyers mortgage loan guide

Published On: September 14th, 2022

Congratulations, you’re ready to buy a home! Maybe you’re making the transition from renting to buying, or it‘s time for a bigger home. Either way, it’s a big decision and we’re excited to be your partner on the road to homeownership. Our team will help you choose the right loan for your needs and be there for you from start to finish.

Use these resources and tools below to help you navigate this process.

Why should you consider buying a home?

It’s important to understand if you’re ready to buy. There are many benefits to owning versus renting and knowing your numbers when it comes to budgets and credit scores will be very helpful. Understanding the “dos and don’ts” of homebuying will make the process easier and help you make informed decisions.

Check out the following articles for more information about homebuying basics:

Things to know before buying a home

The process of buying a home can seem overwhelming. There’s a lot to research and consider as you decide what you can afford, and how to move though the loan process.

It’s important to know your numbers when considering your options. Understanding your budget and affordability options, whether you’ll make a down payment and how your credit score and current debts can influence what you qualify for are all part of the process. We’re here to help walk you through it with some important things to know before buying a home.

Understand debt-to-income ratio (DTI)

The percentage of your gross monthly income that goes towards your monthly debt payments is your debt-to-income ratio. Examples of common types of debt include credit card payments, car payments and student loans. It’s important to understand that most homebuyers have debt and that’s not something that should stop you from purchasing. Understanding how your debt impacts what you’re qualified for when it comes to a loan is important. All this together comes into consideration when looking at what you can afford and the amount a mortgage company will lend you. This is an important piece of qualifying for a loan.

Check your credit score

Your credit score is calculated based on the information in your credit report. Credit scores range from 300 to 850 and understanding your score is a critical step in the homebuying process.  

Purchasing a home is possible with lower credit scores. There are different programs available with options for borrowers in many financial situations. Don’t let lower credit scores stop you from checking in with a loan officer to see which loan program might be an option for you.  

Costs to expect with a mortgage

There are various types of costs and fees included with buying a home for items such as appraisals, inspections, title, closing and more. The most important to know about in the beginning is down payment and closing costs.

Save up for the down payment

If you don’t have a down payment saved up, you may still be able to purchase a house. Down payment options vary and we’ll work with you to figure out the best loan for your situation.

Be prepared for closing costs

Closing costs and fees vary depending on a number of factors involved with your loan. Often, they can be wrapped into the total amount of your loan.

Understand interest rates

Your mortgage rate reflects the cost you’ll pay to take out a home loan. As a percentage of the overall loan amount, it represents the annual interest you’ll owe.

Calculate how much house you can afford

Our income calculator helps you determine what you can afford by reviewing your annual income and the size of the mortgage, monthly debt payments, interest rates, loan terms and the related expenses to buying a home.

Use our mortgage income calculator to see what you can afford.

Now that you’ve learned about important things to know before buying a home let’s break down some of the steps involved, from finding out what you can afford to closing the sale.

Steps to buying a home

Whether you’re a first-time homebuyer, moving to a new home or purchasing an investment property, we know the process can be confusing at first. There’s so much information, it can be easy to get overwhelmed. We get it!

Let’s learn more about the homebuying process step by step.

Step 1: Determine how much you can afford

Defining your budget and reviewing your financial situation is a great place to start.

Read about how much income you need to buy a home.

Step 2: Get pre-qualified and pre-approved for credit on your mortgage

One of the first steps in your homebuying journey, pre-qualification simply means getting an approximate idea of how much you may be able to borrow based on your financial situation and a credit check.

Step 3: Shop for your home and make an offer

This is the fun part. Work with your real estate agent to find a home that works best for your family and make an offer on the home. This includes any conditions you might request and closing costs.

Learn about how to write an offer letter for a house.

Step 4: Get a home inspection

A home inspection protects you, the buyer, from any surprises with the property. Inspectors review the overall condition, safety and quality of the home. If serious issues are found, you have the option to rescind your offer or work with the seller on fixes or price adjustments.

Step 5: Have the home appraised

An appraisal evaluates the value of your home. It’s required by mortgage lenders, and paid for by borrowers.

Step 6: Coordinate the paperwork

Your lender will work with processing and underwriting teams to finalize all of the paperwork, reach out to you on any conditions that must be met and process your loan.

Step 7: Close the sale

This might be even more fun than house shopping. Congrats! You sign closing documents and the home is now yours.

Tools to simplify the homebuying process

We know the mortgage world has a language of its own. Get familiar with key terms using our mortgage glossary. Knowing the lingo will help you better navigate this process.

We’ve got you covered with payment, pre-qualification, and affordability calculators to help build your homebuying profile and understand your options.

Mortgage payment calculators help you determine the total amount of your monthly mortgage payment including individual amounts of your principal payment, interest, taxes and homeowners insurance.

Pre-qualification calculators help you figure out if you meet the minimum requirements based on your income, debts and credit history to qualify for your loan.

Affordability calculators help you determine how much home you can afford based on your income, debts and down payment savings (if applicable).

Affordability calculators help you determine how much home you can afford based on your income, debts and down payment savings (if applicable).

Finding your dream home

This is the time to consider what you want in your next home. It’s important to prioritize items on your wish list so you can make a practical decision on the right house for your family’s needs, lifestyle and budget.

What’s on your wish list? Maybe it’s a big backyard to enjoy with your family. Perhaps you’re focused on features like modern appliances or a chef’s kitchen. Do you need office space at home or a shorter commute? It might be all about be the community aspect, including good schools, things to do and activities that are important to you.

Tips to help your home search

Ready to take the next steps?

If you’re ready to buy a home, we’re here to help make your dreams come true. Complete the form on this page so we can connect. Let’s talk soon!

The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply.