Part 5 in our Series for First Time Home Buyers....

At Ameriserv Bank we offer the following programs for First Time Homebuyers:

FHA  -

·         Purchase price limit of $280,000

·         Minimum credit score of 640

·         Down payment is 3.5% of the purchase price. 

·         You can also get a gift for the down payment , it must be from a qualified person – usually a family member.  

·         There is an up-front funding fee of 1% - which can be financed. 

·         Seller assist is allowed, which can be up to 6% of the sale price. 

PHFA –

·         You cannot have owned a home in the last three years. 

·         Income limits and purchase price limits in Centre County based on family size.

·          All income from any occupants over the age of 18 that are working are used when qualifying. 

·         With a minimum credit score of 660 the borrower only needs 3% for the down payment.  If your score is below 660 you would have to complete a credit counseling course and the required down payment would be 5%. 

·         Closing cost assistance available for those who qualify. 

USDA –

·         Homes must be located in a rural area – which is determined by zip code.  

·         There are income limits based on family size for Centre County.

·          There is a onetime guarantee fee of 3.5% of loan amount and may be financed. 

·         No mortgage insurance

·         100% financing is available along with Seller assist towards closing costs.  

·         Minimum credit score of 640. 

VA –

·         100% financing available

·         2.125% upfront funding fee

·         No mortgage insurance

·         Minimum credit score of 640

·         Seller assist is allowed

For More Information about these programs please contact: 

Wendy Cable, Mortgage Loan Officer, Ameriserv  Bank – 814-533-5432 or 814-933-2739.

It is very important to be pre-qualified before you begin your home search and it makes you a much stronger buyer in todays market!

First Time Home Buyer Series Part 4

First Time Home Buyer Qualification Requirements

By Amy Cates, eHow Contributor

Buying a home for the first time can be an exciting process. Prepare ahead by gathering the proper paperwork and ensuring your finances are in order.

Identification

1. According to the Internal Revenue Service (IRS), first-time home buyers are taxpayers who have not owned a principal residence in the three years prior to the purchase date.

Preparation

2. If you are not prepared, the excitement of buying your first home can fade behind a pile of paperwork. If you are considering buying a home, planning is key. Having on hand the appropriate documentation and a reservoir of cash will help ease the process, saving you, your lender and your realtor time and money along the way.
   When it comes to qualifying for a mortgage, first-time home buyers should be prepared with either a a letter of pre-qualification or pre-approval. Pre-qualification provides your lender and realtor with a letter or certificate that outlines how much money you are qualified to borrow, based on your monthly income, credit score and debt ratio. This helps narrow your house-hunting to a certain dollar amount, helping you secure a manageable monthly payment.
   
   A pre-approval, on the other hand, provides a more thorough assessment of your financial situation. This letter shows that a lender has closely verified several key factors, including your credit references, employment status and income-to-debt ratio.

Budgeting

3. As you begin the mortgage application process, examine carefully how much house you can afford. A lender may be willing to lend you more so that you can buy a more expensive home, but you will be the one making the monthly payment. Consider all the costs that go into home ownership: mortgage payment, property tax, maintenance costs, utilities, mortgage insurance, homeowner's insurance and other relevant costs.

Documentation

4. Long before you begin the mortgage application process, you should get organized. Organizing documents and clearing potential credit hazards can take weeks or months, and preparedness can prevent snags along the way.
   
   Before you begin shopping for a new home, check your credit report. You can purchase a copy from one of the major credit reporting agencies (Transunion, Experian or Equifax). Check it for accuracy, and clear up any errors that may have been reported against your name or your spouse's name. Errors typically take 30 days to be erased from a credit record, and you will need to request a written letter from the creditor. Under federal law, you may receive a free copy of your credit report each year from the three major credit report agencies (see Resources).
   
   Credit scores are important because they reveal a borrower's track record in repaying loans. A low score does not necessarily mean you won't be approved, but it can lead to a higher interest rate on the loan.
   
   Your lender will also require copies of checking and savings account statements for the previous six months, as well as evidence of other investments, like stocks and retirement accounts. Also, keep a file of paycheck stubs as proof of your monthly income, as well as a list of all credit cards, their balances and monthly payments. Other outstanding debts, such as automobile loans, will also need to be included. And finally, provide copies of the last two years' income tax returns.

Money

5. When it comes to financing your home, the larger the down payment you can make, the better your financial outlook will become. A higher down payment can lead to a lower mortgage interest rate and can possibly prevent a monthly PMI (private mortgage insurance). And with a higher down payment, your principal drops, leaving you with a lower monthly payment.
   
   Lending programs vary, with eligible buyers required to make as low as a 3 percent down payment. Under certain guidelines, qualifying buyers may not be required to make a down payment.
   
   When you make an offer on a home, you will be required to sign a contract and pay earnest money. The amount of this payment varies--typically as low as $1,000--and is used to help validate the contract. This money is usually held in an escrow account and will go toward the down payment at closing.
   
   Closing costs range from 3 to 4 percent of the home price, but these expenses are often negotiable between buyer and seller and even with the lender through special lending programs.

Read more: First Time Home Buyer Qualification Requirements | eHow.com http://www.ehow.com/about_5128525_first-home-buyer-qualification-requirements.html#ixzz1Fwjhz4dc

 

 

 

Alot of these information was covered in our first Blog but I thought there was some valuble information in this article... we will be doing another series with Ameriserv in our next Blog......

3rd part in our First Time Home Buyers Series " The Closing Process"

CLOSING PROCESS

________________________________________________________

The closing process is not difficult, but sometimes very time consuming. Whether you are paying

cash or financing your purchase there are certain steps that must be followed to assure that you

are purchasing a property free and clear of any liens, mortgages or defects in title, and that you

understand the terms of your purchase.

Once you have made a commitment to purchase, then a Sales Agreement is prepared for your

review. This is a binding contract. Although most Sales Agreements contain standard language,

there are several things to look for:

1) identity of the property you wish to purchase (address and tax parcel number),

2) purchase price and deposit money (agreed price and down payment),

3) seller assist (where seller agrees to pay a portion of your closing costs), if

applicable,

4) mortgage contingency (contract binding only if the mortgage amount is approved

by your lender), if applicable,

5) mortgage commitment date (you must have a written commitment by this date),

6) last date to settle (closing must occur on or prior to this date),

7) rights to inspections (pest, radon, home inspections, etc.)

8) type of sewer and water (public or private),

9) anything checked off or hand written by the agent,

10) special clauses (additional conditions),

11) default clauses (example: your rights to the deposit if the appraisal is less than the

purchase price; mortgage contingency, etc.),

12) disclosures regarding defects, lead-based paint, etc..

In some cases, a buyer has already been pre-approved by a lender prior to negotiating or entering

into a Sales Agreement to purchase the property. This is a wise approach since you will be

making a financial commitment with a down payment, and it’s always wise to know that a bank

is willing to loan you money.

Once everyone has signed the Sales Agreement, the closing process can begin.

If you are financing your purchase, you will need to provide your lender with a copy of the

signed agreement. This will allow the lender to begin their process and order an appraisal to

assure that there is enough equity to justify the mortgage amount. At this point your realtor will

assist you with any inspections, including termite, radon, septic/water if applicable, and a home

inspection.

If you are not financing your purchase, you should ask your realtor to assist you in ordering an

appraisal and any inspections, including termite, radon, septic/water if applicable, and a home

inspection.

Whether you are paying cash or financing your purchase, you now need to select a closing agent.

If you have not already selected one, your real estate agent and/or your lender can provide you

with a list of approved agents. It’s not a bad idea to contact different agents to find out what fees

are involved.

The closing agent will be responsible for the following:

1) search the courthouse records back more than 60 years on the property,

2) assure that there are no defects, liens or judgments against the property,

3) be sure that any defects, liens or judgments can be cured prior to closing,

4) issue a title commitment or title certificate to your lender (if you are financing)

5) explain your right to purchase Owner’s Title Insurance and the cost (this insures

the title to the property) which can be waived (you are not required to purchase

this),

6) prepare a Settlement Statement disclosing all settlement charges and fees,

7) work closely with the buyer and seller’s real estate agents to assure that all fees

are accurate and properly disclosed on the Settlement Statement

8) work closely with the lender to assure that all fees are in compliance and

accurately disclosed on the Settlement Statement (if you are financing),

9) provide you with a preliminary draft of the Settlement Statement for your review

prior to closing (this is normally accomplished through your Realtor),

10) prepare an accounting to assure that the books balance for disbursement,

11) prepare all disbursement checks and assure the availability of funds for same,

12) attend closing and explain the Settlement Statement and any loan documents, and

assure that you understand everything prior to signing, and assure that you receive

copies of your closing documents,

13) conduct one final search of courthouse records to assure that nothing has changed

since the initial search,

14) record your new deed, mortgage and any other recordable documents applicable

to the transfer, and

15) disburse funds (this includes any funds due to seller).

Once this process is complete, you will receive your recorded deed from the courthouse (this can

take several days), and your closing agent will assure that any Title Insurance Policies and/or

Title Certificates are completed and submitted to the appropriate parties. Once the closing agent

has confirmed that everything is done correctly, the closing process is complete.

Steven F. Smith

Mortgage Settlement Services

107 South Spring Street

Bellefonte, PA 16823

814-357-0515

814-357-0583 fax

mtg.smith@verizon.net