Fulton Savings Bank Mortgage Loan Process – FAQs
Mortgages Made Easy!
Fulton Savings Bank: Mortgages Made Easy
Fulton Savings Bank is committed to helping you find the right borrower, and we offer a variety of products to meet your individual needs. We make the process of securing a mortgage simple and straightforward by offering you the latest in financial tools that enable you to make sound financial choices. Find our current mortgage rates here.
Mortgage Loan Application Process: FAQs
How do I know how much house I can afford?
Consider putting together your household budget prior to meeting with your Mortgage consultant so you have an idea of (to determine) your housing expense comfort level. Ask yourself “will I be comfortable paying about the same or more than my current rent or mortgage payment?” Your mortgage professional will analyze your current monthly income and liabilities to determine your maximum monthly payment.
I hear my payment depends on my DTI. What is DTI?
Your Debt to Income Ratio (DTI) is a percentage of your monthly gross income and represents the total of your monthly Liabilities (ie: credit cards, installment loans, mortgages, child support) plus your monthly Housing Expense. (PITI) When your monthly obligations increase the amount you can afford for a monthly housing payment must decrease.
Is there a DTI Guideline I can follow? (Rule of Thumb)
Many programs and lenders follow a conservative approach when determining how much house you can afford- capping your DTI at 43%. There are some compensating factors which can push your ratio higher or lower. Your FSB mortgage professional will review your particular situation and offer suggestions to improve your buying power.
What is a Prequalification?
The Prequalification process is quick and easy. Your mortgage professional reviews your income, assets, and credit complexion and in his opinion determines how much house you can afford. She then states what housing price range you may qualify for in a letter.
Why do I need a Prequalification Letter?
Generally, your realtor will ask for a Prequalification Letter from your lender prior to showing you houses. This guides the realtor and ensures that you have the ability to make a good faith offer on a property.
What are the minimum qualifications to buy a home?
Financial institutions look at your ability to pay- which means analyzing your credit situation, income dependability and available funds to purchase a home. If you have these items in place there is a good chance you may qualify to purchase your new home.
I have a recent bankruptcy. Can I qualify for a mortgage?
If you have re-established credit we have programs which you may access with a recent discharged bankruptcy. Contact us for more information.
How much cash will I need to purchase a home?
When you purchase a home you always need money for the following items:
- Down Payment: The percentage the lender requires you to put down on your home.
- Closing Costs: All the items you pay for which need to be done prior to and at closing. This may include appraisal, flood certification, origination fee, mortgage tax, bank attorney, etc.
- Set up of your Escrow Account for Taxes and Homeowners Insurance: We set up a special account (escrow account) where your money designated for the payment of your taxes is kept. When your tax bill arrives FSB pays the bill on your behalf. At closing you put enough money in your escrow account to ensure that when the tax bill comes it can be paid. Generally, between setting up your escrow account and reimbursing the seller for the taxes, you will need a full year of taxes and homeowners insurance to set up your account.
What ZERO Down programs are available?
There are still some “Zero Down” programs available including the USDA Rural Guarantee program and the VA mortgage for US Veterans. We can also show you how to apply for a Conventional or FHA loan and keep your out of pocket funds at a minimum by accessing grant programs and seller concessions.
What Grant Programs are available?
Our most popular Grant Program is the First Home Club which matches every $1 you save with $4 from Fulton Savings Bank. Monies are provided from the Federal Home Loan Bank of NY and your household must qualify and save over a minimum 10 month period. Inquire at any FSB branch for program details.
What is a Gift and how is it used to purchase a house?
A Gift consists of funds given to you, with no expectation of repayment, from a family member. These funds may be used, in most circumstances for your down payment and closing costs. Gifts many times can make the difference in having sufficient monies to purchase a home. There are very well defined guidelines detailing acceptable gifts.
What are Seller Concessions and how does it help me?
Sellers Concessions involves the seller offering an incentive to a buyer. A popular incentive is offsetting closing costs, which means you bring less of your money to closing. Your mortgage consultant will review the mechanics of how sellers concessions work.
Does FSB offer Construction and Renovation loans?
Of course. We offer stick-built, modular and manufactured home construction products in addition to renovation loans for your current home or for the purchase and renovation of a new property. We are known for our common sense draw schedules and adaptability- important features when involved in construction.
Can I get a construction loan and build my own home?
YES, Fulton Savings Bank is the local leader in “self build” construction and renovation. If you have the skills to build your home or act as the General Contractor you may do so.
Do I have to own the land before I construct my home?
No, you may roll your land and construction costs into one loan- with only ONE closing. This means only one set of closing costs, which saves you money.
How do I know which type of mortgage is best for me?
There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, among these your current financial picture and how long you intend to keep your house. Fulton Savings Bank can help you evaluate your choices enabling you to make the most appropriate decision.
What does my mortgage payment include?
For most homeowners, the monthly mortgage payment includes three separate parts and is known as PITI:
- Principal: Repayment on the amount borrowed
- Interest: Interest Payment to the lender for the amount borrowed
- Taxes & Insurance: 1/12th your annual tax and homeowner’s insurance bills are normally paid to the lender monthly. This money is held in a special account, called an escrow account. Your payments accumulate in this account and when the taxes or insurance is due your lender pays the bill in full from your funds. The money in escrow earns a nominal amount of interest, reported to you at year’s end. Many people enjoy the convenience of this service which is offered free of charge.
Do I have to escrow my taxes and insurance?
Many times if you are making a 20% down payment, escrow is waived. However there are situations when we may require an escrow account be set up. Your Mortgage Originator can offer guidance in this area.