Home Loans

Getting pre-approved for a mortgage entails the bank or mortgage lender reviewing a borrower's credit standing in order to determine if he or she qualifies to borrow. Home buyers often get pre-approved prior to making an offer on a house, making their offer more likely to be accepted.  Some items the borrower may need to get pre-approved include:

• Typically a 20% down payment, but not required under most circumstances. Down-payments of 3.5% - 5% may qualify you for a mortgage. In some cases - if you are getting a VA loan, for instance - a down-payment is not required.
• A credit score report that details your full credit history, including payments on revolving accounts and installment accounts. 
• A good debt-to-income ratio (DTI), which is a percentage of your monthly payment obligations divided by our gross income.
• Proof of income, which is typically your income from the previous two years, but additional income paperwork may be needed. 

Applying for a home loan includes getting pre-qualified, filling out the mortgage application, reviewing loan estimates, choosing a lender, and locking in a rate.  Here's a blog that can help guide you through the loan application process.

The interest rate for a mortgage loan will vary depending on a number of factors, including:

• Your credit score. In most loan situations, the higher the credit score, the lower the interest rate the borrower will receive.
  The location of your home. The rate may fluctuate slightly based on the state you live in.
• Down payment. In general, the more you put down on a home the lower your interest rate will be. Your overall costs may go down as well with a high down payment, as you may need to pay for private mortgage insurance (PMI) if you don't put down at least 20%.
• Loan term. The duration, or term of you loan is the time that you take to repay the loan. Common terms are 15 or 30-year. In general, the shorter the term, the lower the rates.
• Loan type. There are different rates associated with loan types. For instance, a conventional loan that has more stringent qualifying requirements may have a lower rate than a non-QM or non-qualified mortgage loan. FHA and VA loans will have different requirements and associated rates as well.
• Interest rate type. Most interests rates fall into one of two category types: fixed or adjustable. With an adjustable rate, your initial rate may be low, but can increase over time as the rates fluctuate. A fixed rate is locked in and doesn't change over the course of the loan term.

There are a number of items that a lender will look at to determine if a borrower is qualified for a home loan. These can include:

• Verifiable income. Lenders want to see that you have a history of working for at least one to two years, preferably with the same employer. 
• Able to make a down payment. The minimum is 3.5% for an FHA loan and 20% for a conventional loan if you don't want to have to pay private mortgage insurance (PMI).
• Credit score. Most loans have minimum credit score requirements. For instance, the FHA sets the minimum FICO score at 580 to be eligible.
• Debt-to-income ratio. Lenders will specifically look at your debt-to-income (DTI) ratio to determine if you can afford to purchase a home. The DTI measures the percentage of your income before taxes that you spend each month on your debt payments. That includes housing expenses, credit cards, student loans, and other obligations.
• Documentation. You will need to be able to provide pay stubs, W-2s, and any other tax return documents.

Credit score requirements vary depending on the loan type. For instance, a non-QM (non-qualified mortgage) loan may need a higher credit score to qualify than a conventional loan, and a conventional loan may require, on average, a higher credit score than an FHA loan.

A mortgage loan that's insured by the Federal Housing Administration (FHA). Here's a blog that explains more.

Documentation you may need for a VA loan includes but is not limited to the following:

• Copy of driver’s license
• Two years full tax returns - all pages and all schedules
• Two most recent pay stubs with year-to-date pay
• Two most recent asset statements - all pages with full transaction history
• Copy of your mortgage statement if you currently own
• Bankruptcy and discharge papers (if applicable)
• Certificate of Eligibility (COE).
• Form 28-1880 (Request for COE)
• Form DD-214

NASB offers a number of loans and programs that helps getting a loan for a first-time buyer easy and affordable.

The different loans available include:

• FHA loans with credit requirements not as stringent as conventional loans
• VA loans for veterans and their families with no origination or application fee in closing costs¹
• Bank Statement loans for self-employed borrowers who would rather show bank statements than tax returns
• FLEX loans for borrowers with unique credit situations

NASB mortgage programs that can help reduce stress during the home purchase process:

• Home Buying Advantage underwrites your loan up front, so that when you're ready to go, your loan is nearly complete
• Good Neighbor Program helps promote home ownership in the under-served areas of the Kansas City community²
• Missouri Housing Development Commission Program helps Missouri residents take advantage of a number of mortgage assistance programs available through the MHDC

¹NASB does not charge lender fees on VA loans; however, fees payable to third party service providers are still required.
²Specific geographic and / or income level restrictions apply. Eligibility for the discount and features of the Good Neighbor Programs are separate from loan approval, which is still required.

Click here for a calculator to determine your monthly mortgage payment for a given purchase price, down payment, interest rate, and loan term.

Homeowners insurance is very important, it covers the house’s structure and all its contents should a destructive event occur, such as a fire or storm. You want to make sure and get quotes from multiple companies, look at their reviews and compare pricing. Here's a blog that can tell you more.

A minimum loan amount of $175,000 is required to apply. Exceptions include mortgage products for properties located within the Greater Kansas City metro and surrounding areas. Contact a NASB Loan Officer for details on the excluded areas and/or zip codes.

Click here for a calculator that determines your mortgage closing costs for a given set of loan terms. The calculator lumps settlement charges into two categories: origination charges and other settlement services.

A portfolio loan is a loan that a lender will keep in their portfolio, instead of selling to the secondary market.  A primary reason that these lenders keep the loans in their portfolio is to provide a lending option to those who may not fit secondary market eligibility guidelines and to help the local community. It’s part of their mission and purpose.

To apply for a conventional mortgage loan, borrowers usually must provide pay stubs and W-2's from the past two years of employment. But if you are self-employed or own your own business, you don't have W-2's or pay stubs. A bank statement loan requires only the bank statements of self-employed borrowers to determine if they can produce sufficient income to warrant approval for a mortgage loan.  Here’s a blog that can explain more.

A mortgage refinance is when a homeowner gets access to a new mortgage loan to replace the existing one. The reasons for this could include getting a lower rate, reducing the term of the loan, access the equity built up in the house for cash, or cancelling mortgage insurance premiums.

One of the most common types of loans that home buyers come across is the conventional loan. These loans aren’t backed by the government, like FHA and VA loans. Conventional loans follow the guidelines that Fannie Mae and Freddie Mac - two agencies responsible for standardizing mortgage lending - have set. But it’s lenders, such as banks, that are responsible for approving your conventional loan. Here's a blog that explains more about conventional loans.

Conventional loans may offer some of advantages to other loan types. They require down payments as low as 3%, there may be less paperwork, and you will not have monthly primary mortgage insurance ('PMI') with a down payment of at least 20%.

Save this link as a favorite to ensure you stay up to date with where your loan application is, documents that need to be signed, and ensuring you are setup for success at closing.  https://portal.nasb.com

Once your loan officer sends an email directing you to set up your portal account, you will be informed of the loan progress with five status updates:

1. Your application has been submitted for review
2. You may review and acknowledge disclosures
3. You are notified when the loan has been approved
4. All documents have been sent to your Settlement agent to be notarized
5. Your loan funds have been dispersed