1st Time Homebuyers
Everything you need to know about buying a home and may not have known to ask.
Financing a new home can be a challenging process. But it doesn’t have to be. At Fairport Savings Bank, we’ll explain each step of the process. And when you’re ready to begin, we’ll be right here to walk you through every step- as it happens.
- Determine how much you can afford to pay and how much you can afford to borrow. It’s a good idea to know how much you can borrow before you begin seriously searching for a home. Your Mortgage Specialist at Fairport Savings Bank will help you arrive at a figure that you can realistically afford.
We’ll start with a simple formula. Generally, your monthly housing expense should be around 28% to 30% of your total monthly gross income (before taxes).
Then we’ll help you figure out your total monthly debit – which includes your new mortgage, car payment, credit cards, etc – which should be approximately 36% to 40% of your gross income.
- Consider the best mortgage option for your situation. There are many types of mortgages – each one designed for a specific purpose. At Fairport Savings Bank, we offer a full range of mortgages and we’ll help you choose the one that’s right for you.
- Get pre-qualified or pre-approved for your mortgage. A lot of times, a seller will choose the bid of a pre-qualified or pre-approved buyer over others. It eliminates some of the uncertainty and gives you more negotiation power. Pre-qualifying helps you determine the home you can afford before you begin searching. We’ll happily help you through this process.
- Ask a Realtor to help you find the right home. Finding the right Realtor is crucial because it will save you a lot of time and aggravation in the long run. Your Realtor will help you define exactly what you want in a house, and then help you find it. If you don’t currently have a Realtor, we’d be happy to help you find one that will understand your needs.
- Determine the amount of cash you’ll need to close on your new home. Besides paying up front for the down payment, you’ll need money for other expenses like closing costs, taxes, insurance and pre-paid interest and your own attorney. Your Mortgage Specialist will help you estimate these costs so you can plan for them.
- Choose an attorney to help you through the buying process. While we’ll be there to help you through the financing process, its smart to make sure you have an attorney to help you with the legalities. An attorney will help you understand the terms, review the deal and make sure nothing is overlooked. We believe you should get an attorney involved as soon as you’ve decided you want to buy a home, because it's one of the biggest investments you’ll ever make.
- When you find the home you want, do some research before making an offer. You can’t always assume that the asking price is the true value of a home. Ask your Realtor for some help. What are the selling prices of similar homes in the area? How long has the property been on the market? Has the price been recently lowered? Go through the house several times if possible, looking for things you may have missed. Check into the neighborhood. Talk to neighbors and merchants. Are the streets well maintained in the winter? Is it a family neighborhood or working professionals? These are things that can easily be overlooked in your excitement to get into your new home but will make a big difference later.
- Negotiate a deal with the help of your Realtor and your attorney. Your Realtor and/or your attorney will help you come up with purchase terms that work best for you. You’ll want to consider a number of contingences in your offer that let you inspect the home and complete your financing before finalizing the purchase.
- Once you’ve settled on a purchase price and terms, select your mortgage and complete an application. When you complete the negotiating process, you’ll have a signed contract from the seller. With this document, you can move forward to a formal application for your mortgage. At this time be ready to provide us with important information like your Social Security number, tax returns and W2’s, bank accounts, assets, etc
- We’ll provide you with written approval as soon as possible. Once you’ve made your application, we’ll give you a Good Faith Estimate of Closing Costs. This is a document that tells you more accurately how much money you’ll need at closing. At this point, we’ll begin the approval process for your mortgage. This simply means we have to verify the information you’ve provided, get an appraisal of the home, order a credit report and obtain other formal financial information and then make our decision based on your situation. But since we make our lending decisions locally, we move this along quickly When your loan is approved, we’ll notify you by phone and then mail you a commitment letter.
- Fairport Savings Bank and your attorney put the finishing touches on your mortgage. You’re almost there! After you receive your commitment letter, your attorney and Fairport Savings Bank will work together to get your mortgage ready for closing. Our attorney will oversee important details like performing a title search, preparing surveys and a number of other crucial functions.
- Going to the closing. It’s the big day. But you’re not in it alone. Your attorney will be with you at the closing to help you handle the details. But here’s what’s going to happen: your attorney and our bank attorney work together to schedule a convenient closing date. Your attorney will notify you of the exact funds needed for closing. At the closing, the official transfer of title will occur and you’ll become the owner of your new home.
- Put out the Welcome Mat! Congratulations! It’s time to move in! Each month you’ll send Fairport Savings Bank your mortgage payment. Or, if you prefer, you can have the payment directly deducted from your Fairport Savings checking or savings account. Unlike many other banks, we will service your mortgage right here locally for the life of the loan. So if you ever have a question or concern about your mortgage, stop by one of our branch offices or call us. We’re just a local phone call away.
And with that, enjoy your new home!
