With new mortgage rules and regulations in place, buyers may face more obstacles when applying for a mortgage. With that in mind, the Independent Community Bankers of America® (ICBA) have produced some advice to help homebuyers navigate the mortgage process.
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“Buying a home is likely the biggest purchase anyone will make, and community bankers are an excellent resource to help guide consumers through the process,” says John Buhrmaster, chairman of Independent Community Bankers of America and president and CEO of 1st National Bank of Scotia, N.Y. “Community bankers across the country can help their neighbors in their local community find mortgages that fit their financial needs, budgets, and lifestyles.”
ICBA, which represents more than 6,500 community banks across the country, recently offered several suggestions for prospective first-time home buyers seeking a loan, including:
- Collect paperwork and documents. Buyers should have paycheck stubs, W-2 forms, tax returns, and bank and investment statements for the last two years.
- Check credit reports. Buyers should know their current credit score before applying for a loan. Credit reporting agencies are required to give one free report annually.
- Keep tabs on spending habits. For example, maxing out credit cards or falling behind on other loan payments will likely create issues when applying for a mortgage. Buyers should avoid going on a spending spree before and after applying for a loan to avoid any hang-ups.
- Explore options. ICBA encourages buyers to work with community bankers to figure out how much to borrow and which mortgage product is right for them. They should explore mortgage options, including rate adjustments, fees, and other loan features, to avoid surprises at closing.
- Know the rates. “Learn what current mortgage rates are,” ICBA notes. “Your community banker can help you understand how that translates into monthly mortgage payments.”
- Look for special programs. Buyers may want to check with their state, city, and county government agencies for special first-time home buyer loan or grant programs available to assist with down payments and closing costs.
“Community bankers work with their customers and help give advice on finding mortgages borrowers can afford,” Buhrmaster said. “There are plenty of steps to complete to ensure the home buying process goes smoothly and community bankers are on hand to help with this. They can help customers determine the most affordable mortgage options and are available to provide additional financial guidance if needed.”
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