Live Smarter by knowing the types and differences
The most common mortgage loan types are Conventional, FHA, VA, and Home Possible. All have flexible rates and terms available, to include fixed or adjustable rate structures.
This type of mortgage allows you to finance up to 95% of the purchase price (or appraised value), can possibly have a shorter processing time, and same-day qualification if you are “credit qualified”. Flexible rates and terms are available.
FHA (Federal Housing Administration) Loan
An FHA Loan is a great choice for first-time home buyers, shoppers who need a low down payment, or those with less than perfect credit. This type of loan allows the seller to contribute up to 6% toward closing costs and prepaid items. Flexible rates and terms are available.
This type of mortgage is available to Veterans and their surviving spouses, and is guaranteed by the Department of Veterans Affairs (VA). The mortgage company works directly with the VA, since each loan is unique to a veteran’s individual situation. A VA Loan allows for 100% financing of the purchase price or appraised value, for owner-occupied properties with one to two units. The applicant must be an eligible veteran. Similar to the FHA Loan, the seller can contribute up to 6% toward closing costs and prepaid items. Flexible rates and terms are available.
Through our partnership with Homeowners Advantage, we offer this unique program. Home Possible allows low and moderate income borrowers to finance a home with low down payments, and flexible sources of funds. Members must qualify by income and other factors.
The Mortgage Process
Before you shop for a home, it’s a good idea to find out how much you can afford to spend, an estimate of your closing costs and pre-paids, and your estimated monthly payment.
Our preapproval process is quick and easy. It can either be over the phone, or in person. Call us at 315-735-8571. We can “crunch the numbers” and help you find an affordable mortgage solution that meets your needs.
Once you are preapproved, we will give you a preapproval letter which you can use to make your purchase offer. This gives you negotiating power!
Buying Your Home
Once you chose the house you’d like to buy, you and your realtor will prepare a purchase contract. Once all parties agree on a purchase price and a contract is signed by all involved parties, you’ll complete a formal mortgage application. An application will be the start of the mortgage process, which will include the order of your appraisal, meeting all conditions, and more. We’ll help you every step of the way.
When your loan is approved, you will receive a commitment letter. At this stage, you will be required to buy an insurance policy on your new home. You will need to purchase this policy prior to your closing. Proof of this purchase is called an “insurance binder”, and will be necessary to provide before scheduling your closing.
Common Mortgage Questions
What is the difference between types of Mortgages?
There are many different types of Mortgages to choose from, and there are advantages and disadvantages to each. The best option for you will be based on a number of factors, including your experience with home-ownership, the amount you have saved for a down payment, the location and condition of the home, your credit score, and your income. The best way to find what’s right for you is by talking to one of our knowledgeable Originators.
How much money will I need to buy a home?
The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:
- Earnest Money - The deposit that is required when you make an offer on the house
- Down payment - A percentage of the cost of the home that is due at closing
- Closing costs - Costs associated with processing the purchase or refinance of a house
- Prepaid-Escrow set up for real estate taxes and homeowner’s insurance.
Our friendly and helpful staff can prepare an estimate to meet your particular situation.
What is PMI?
In the event you do not have a 20% down payment, lenders will allow a smaller down payment, as low as 3%. Without a 20% down payment, borrowers are required to carry private mortgage insurance, also known as PMI. This premium will be added to your monthly payment (or you can choose to pay it up front).
What are “points” on a Mortgage?
A point is a fee that may be assessed at closing by the lender to obtain a more favorable interest rate. Each point is equal to 1% of the loan amount (e.g. two points on a $100,000 mortgage would equate to $2,000). Generally speaking, the longer you plan to remain in the property, the more advantageous it is to purchase points. There is no requirement to pay discount points.
We can answer other mortgage questions you may have, and make your mortgage process easier.