Home Mortgage Guide *
This guide outlines the steps you can take to help secure your dream home and your ideal home loan. With this information, you can gain knowledge and confidence to help you reach your goals. If you have any questions, please don't hesitate to ask your loan officer.
Step 1 – Down Payments and Cost
Down payments are usually between 3.5%1 and 20% of the purchase price of a home. The size of your down payment will help determine the type of mortgage loan that's best for you.
In general, a larger down payment can help you avoid paying
mortgage insurance. This type of insurance may be required when
you have a down payment of less than 20% of a home's purchase price.
Step 2 – How Much Can You Afford?
To determine the price range of home you can afford, use the worksheet below to figure out your debt-to-income ratio. This ratio shows how much of your monthly income would be used to pay debts.
Mortgage lenders look for debt-to-income ratios that are typically below 43 percent.
Once you've completed the tables below, recalculate them using a larger or smaller mortgage payment to see how it affects your ratio. The worksheet can also help you determine how paying off a credit card or auto loan would affect your ratio.
|MONTHLY EXPENSE FOR NEW HOME|
|Mortgage (principal and interest)|
|Homeowner's association dues||+|
|Monthly home payment total||$|
|MONTHLY DEBT PAYMENTS|
|Monthly home payment total|
|Other monthly payment total||+|
|Monthly debt payment total||$|
|ALL OTHER MONTHLY DEBTS|
|Home equity loan payments|
|Auto loan payments||+|
|Credit card payments||+|
|Student loan payments||+|
|Other monthly payment total||$|
|DEBT TO INCOME (DTI) RATIO|
|Monthly debt payment total|
|Gross monthly income||/|
|Debt to income ratio||=|
Step 3 – Loan Options
CONVENTIONAL FIXED–RATE MORTGAGE
A mortgage loan with predictable monthly payments for the life of the loan. Fixed rates available for conforming loan amounts. The interest rate is guaranteed to remain unchanged during the stated period of the loan. Any mortgage loan made without the guarantee of a government agency.
A mortgage loan where the initial loan balance is greater than Fannie Mae loan maximum which currently is $424,100. These loans typically require higher down payments than conventional mortgages. Fixed-rate and adjustable-rate mortgages are available.
ADJUSTABLE RATE MORTGAGE (ARM)
A mortgage loan where the interest rate is fixed for an initial period and then adjusts annually or as specified thereafter. The interest rate on an adjustable mortgage loan is typically lower than a fixed–rate mortgage prior to adjustment.
ONE-TIME CLOSE CONSTRUCTION LOAN
A construction–to–permanent loan to help build a single family residence. One closing for both the construction and permanent mortgage loans.
FHA – FEDERAL HOUSING ADMINISTRATION LOANS A government guaranteed mortgage loan. FHA loans require a 3.5% down payment and the borrower must pay upfront and monthly mortgage insurance premiums.
VA – DEPARTMENT OF VETERANS AFFAIRS LOANS A government guaranteed mortgage loan available to service members, veterans, and eligible spouses. 100% financing is available. Mortgage insurance premiums are not required; however, borrowers must pay an upfront VA Funding Fee.
CHFA – COLORADO HOUSING FINANCE AUTHORITY Loan programs for home purchase or refinancing needs. Programs with low down payments or grants and second mortgage loans for down payment and closing. This ispayment and closing cost assistance are available.
UNITED STATES DEPARTMENT OF AGRICULTURE (USDA) RURAL HOUSING LOANS A mortgage program insured by the U.S. Agriculture Department. USDA Rural Housing Loans helps to provide home ownership opportunities in rural areas.
Step 4 – 10 Steps To Securing A Home Loan
- LOAN APPLICATION –
A Vectra Bank Home Financing Officer will discuss financing options, and assist you in completing a
mortgage loan application form.
- CREDIT REPORT –
Upon completed application, a credit report fee will be collected from you. Based on information
within your completed application and the credit report, a conditional pre-qualification may be provided to you.
- LOAN ESTIMATE –
Within three business days of lender's receipt of a completed mortgage application, the applicants will be
issued the "Loan Estimate" (LE) form, which will help borrowers understand the risks, charges,
and key features of their mortgage loan. Supporting financial documentation will not be collected
from you until Vectra has received your intent to proceed with this transaction.
- SUPPORTING FINANCIAL DOCUMENTATION –
Once your Early Disclosure
package has been received and reviewed, and you have communicated
confirmation to continue with transaction, Vectra will
provide you a listing of supporting financial documentation, which may
include W2s, pay stubs, tax returns etc
- APPRAISAL AND TITLE INSURANCE –
Once your Vectra Home Financing Officer has received your intent to proceed with the mortgage transaction,
an appraisal fee will be collected from you and title insurance will be ordered.This step can begin as
you are gathering the financial documentation from Step 4.
- LOAN APPROVAL –
Upon receipt of the appraisal/title insurance and requested financial documents from the
customer, the loan is ready to submit to Vectra Bank's underwriting team for approval.
Additional conditions may be added at this time.
- LOAN DOCUMENTS –
Once all loan conditions have been received and approved by the underwriter, loan documents
are prepared and forwarded to the title company.
- CLOSING DISCLOSURE –
This is the final loan disclosure. It provides final details about the mortgage loan you have
selected. It includes the loan terms, your projected monthly payments, and how much you
will pay in fees and other costs to get your mortgage (closing costs).
- SIGNING AND FUNDING –
After receiving the loan documents, the title company prepares the final closing documents
and schedules an appointment for you, the borrower, to sign documents. Signed documents are
returned to the lender, and funds are disbursed.
- CONGRATULATIONS! –
You are now the proud owner of a new home! Congratulations!
It’s Fast & Easy
As always, our loan decisions are made locally. This means a faster turn–around time on decisions and ease in getting quick answers to any questions you have during the process.Apply Now
If you need assistance or if you prefer to apply over the phone, please call our Residential Lending Group at 800–737–6620.
You can also complete the short form below and we'll reach out to you!
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*Mortgage Loans: Loans subject to credit approval. Terms and conditions apply. The above information is presented for general informational purposes only and is not intended as advice. NMLS #467014
1. 3.5% is specific to HUD/FHA mortgage loans.
The above information is presented for general informational purposes only and is not intended as advice.
Vectra Bank Colorado Residential Lending Group NMLS #467014
7800 E. Dorado Pl., Suite 100,
Greenwood Village, CO 80111
Toll Free: (800) 737-6620
Office: (720) 947-7596