Is a new home on your 2025 vision board? Dreaming is the fun part, but applying for a loan? Not so much. We know buying a home isn’t exactly a simple process…but with the right partner, it can feel a lot easier.
Horicon Bank’s mortgage team has been around the homebuying block. So we asked a few of our local lenders: “What are the most common questions you see from first time buyers?”
Here’s what our lenders are hearing from customers:
How much home can I afford?
“The answer to this question is two-fold. First, you need to know how much the bank is willing to lend to you based on your current financial situation. We use industry-standard calculations to determine this amount. Second, and more importantly, you should consider how much you want to pay for your mortgage each month. I encourage customers to review their budget and decide how much they are comfortable spending on housing. Once you have this number, you can work backwards to figure out the purchase price that fits your budget. We will also discuss how taxes, insurance, and down payment/PMI (Private Mortgage Insurance) affect the overall cost. I'm always happy to sit down and have these discussions with buyers. I believe this information empowers them to make the right financial decision when buying their home.” Gale M. Nummerdor NMLS ID 469857, Beaver Dam
What is PMI (Private Mortgage Insurance)?
“PMI is insurance that a borrower might be required to buy as a condition of a conventional mortgage loan. It protects the lender in case the borrower defaults on a loan. Typically, if you make a down payment of less than 20% of the home’s purchase price, you might need to pay for PMI.” Gale M. Nummerdor NMLS ID 469857, Beaver Dam
How does your credit score affect your loan approval process?
“Your credit score reflects your past debt repayment behavior and indicates how you might handle repayment of future debts. Financial institutions are more willing to work with you if you have a higher credit score. A higher credit score can earn you better loan terms, such as lower interest rates or down payment requirements, increasing the loan amount you qualify for, boosting your buying power.” Ashley E. Balistreri NMLS ID 1811916, Wauwatosa- Appointments in Iron Ridge and Neosho
What are closing costs and fees?
Closing costs are made up of several different fees such as the appraisal fee, title fee, loan administration fee, tax service fee, recording fee, and flood certification fee. These fees can vary based on the loan size, loan type and the financial institution you choose. We work closely with our customers to make sure they know what to expect for their closing costs and fees based on their unique borrowing needs.” Phil R. Schneider NMLS ID 866899, Waupun
Why is a preapproval important?
“A preapproval for a home loan means that we’ve evaluated your financial information to determine how much money the bank is willing to lend you for purchasing a home. The process involves an analysis of credit history, credit score, income, debt and assets. This is important because most sellers and realtors want to know a buyer has been preapproved before they will show a home. The demand for homes is high, so a preapproval gives the buyer an advantage.” Tracy L. Warden NMLS ID 469862, Horicon
How do you start a preapproval?
“To start a preapproval, I like to meet with customers in person or discuss the process over the phone. We offer online applications as well, so the process can be completed at horiconbank.com whenever it’s convenient for the customer. Most first-time homebuyers haven’t had to provide this type of information before, so I’m happy to help in whatever way they are most comfortable to walk them through this process.” Tracy L. Warden NMLS ID 469862, Horicon
With the right information and the right partner, your vision board can become a reality this year. Connect with a lender near you.