Congratulations on your decision to buy a new home! There are many important considerations throughout the process, especially if you're a first-time home buyer. Here's some information that will keep you on track.
A home purchase may be your largest financial transaction to date, so it's important to make the right decisions and keep an eye on the details. With the assistance of your Real Estate Agent and Lender, it should be a rewarding experience.
How much house can I afford?
Our affordability calculator will help you estimate how much you can afford to pay for a home. We have several calculators to help you make an informed decision. Click below to visit our calculators.
What do I count on my real estate agent to do?
- Preview available homes to weed out those that are overpriced, or undesirable in some other way.
- Present the homes that suit your needs as you've defined them.
- Negotiate the best deal for you.
With a prequalification letter from SMB in hand, your real estate agent will be able to demonstrate that you are a qualified borrower. This will strongly influence the seller, and may make the difference between the seller accepting your offer or someone else's.
What do I count on my lender to do?
- Assist you in selecting the best loan options. We work with your personal situation and goals and combine that with the best rates and fees.
- Keep you informed of your loan status throughout the entire process.
- Keep your Real Estate Agent informed of our loan progress (Note: your personal information is always kept confidential between you and Southwest Missouri Bank.)
We have several calculators to help you make an informed decision. Feel free to plug and play — everything from new mortgage affordability and comparing down payment options to refinancing.
What should I be doing?
- Keep your real estate agent informed of any questions or concerns as they develop.
- Keep the process moving by providing documentation and decisions as soon as reasonably possible. By doing so, many of the details are taken care of early in the process so you can comfortably concentrate on any last-minute details or events that require your attention.
- Make sure you are prequalified as early as possible. This will put the power of financing behind you so you can concentrate on selecting your home.
- Enjoy purchasing your home!
What information is usually required during the loan process?
You will need the following documentation for all borrowers:
- Social Security Number
- Most recent pay stubs
- Complete tax returns for the past 2 years, including all schedules
- W-2's for the past 2 years
- Most recent bank statements
- Best estimates of income, assets, and liabilities
If you are currently a home owner, you may also need:
- Mortgage account information
- Home insurance policy information
- Home equity account information (if applicable)
- Real Estate tax bill
What is PMI?
PMI stands for Private Mortgage Insurance. This is mortgage insurance provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require mortgage insurance for a loan with a loan-to-value (LTV) percentage in excess of 80%.
Borrowers can avoid PMI if the loan amount is 80% or less of the purchase price. If you have questions, your lender will be happy to help!
What do all those terms like Amortization and Closing Costs mean?