First-Time Home Buyers Guide
Are you ready to buy your first home? Here’s a list of what you’ll need to get started, the smartest way through the home-buying process, frequently asked questions and list of common mortgage terms.
Steps to Homeownership
- Copies of license and Social Security card
- Two most recent paycheck stubs covering at least 30 days year-to-date
- Two most recent years signed tax returns including W-2s, 1099s, etc.
- Current bank statements outside of Family Trust
- Other asset accounts: 401(k), investments, etc.
- Homeowners Insurance (name and agent)
- Attorney to be used for closing
|Your Steps To Homeownership||We’ll Take Care Of The Rest|
|1. Complete online or in-branch prequalification application or make Mortgage Services appointment.||Pre-qualification letter sent to borrower.|
|2. Begin shopping for new home.||Submit loan for review and approval.|
|3. Return completed, signed sales contract to Family Trust.||Request and re-submit any additional documents needed for final approval.|
|4. Select a loan type and lock in an interest rate.||Schedule closing for about one week after final approval.|
|5. Sign disclosures and return other requested items promptly.||We will let you know how much your down payment/closing costs are 72 hours prior to closing. Sign final papers and get the keys to your new home.|
How much money do I need to put down?
You can purchase a home with as little as 0% down on VA and Rural Development (USDA) loans. Conventional loans require as little as 3% down and FHA loans require 3.5% down.
How much are closing costs?
Closing costs are approximately 3-4% of the loan amount. Costs vary based on which loan plan and attorney you choose.
Can I have a cosigner?
No, you cannot have a cosigner, but you can have a co-borrower. With a co-borrower, all borrowers must meet basic mortgage loan requirements. Contact Family Trust Mortgage Services Center for details.
May I receive assistance with my down payment?
Yes, you may receive a gift of funds from an immediate relative. All parties will have to sign a gift letter and show that there were sufficient funds for the gift. You may also be able to receive money from a down payment assistance program such as the Rock Hill or Fort Mill Housing Authority.
Are cash deposits for closing funds acceptable?
No. Cash deposits are not considered acceptable sources of funds for verifying the earnest money deposit, down payment or closing costs. All deposits must be fully traceable from the source and appropriate documentation must be provided.
How long does the mortgage process take?
A typical mortgage loan takes approximately 30-45 days from application to close.
Where does my closing take place?
Your closing will take place at the attorney’s office you select. The attorney will contact you 24 hours prior to closing to let you know the amount needed for down payment and closing costs.
|Appraisal||An appraiser compares the subject property to similar homes to assess the market value of the property.|
|Home Inspection||An inspection is done by a qualified professional to assess the structural and mechanical integrity of the house.|
|Fixed Rate||The interest rate stays the same throughout the life of the loan, typically 15, 20 or 30 years. The monthly principle and interest payment will remain the same during the life of the loan.|
|Escrow||Monies collected for payment of property taxes, homeowners and mortgage insurance.|
|Adjustable Rate||The interest rate is fixed for a specified number of years, and then may go up or down each year afterwards depending on the current market. For example: 5/1 ARM – The rate is fixed for the first five years and could adjust every year after the initial five years. 5/5 ARM – The rate is fixed for five years and could adjust every five years for the life of the loan.|
|Down Payment||The amount of money you are required to put towards the purchase price.|
|Loan-to-Value (LTV)||The total potential mortgage loan amount divided by the purchase price of your property.|
|FHA and VA Loans||These loans are insured by the government, which can allow flexibility on certain qualifications.|
|USDA Loan||A rural development loan that requires the home to be in a qualified location. Home must be in a qualified location, subject to income requirements. Visit www.usda.gov for details.|
|Investment Home||A property not intended to be occupied by the borrower.|
|Second Home||A property that is not the borrower’s primary residence but they will occupy for a portion of each year owned.|