Holiday Closing - Juneteenth
Our offices will be closed on Friday, June 19, for Juneteenth. Note: ACH, wires and mobile deposits do not get transmitted on federal holidays.
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Whether you’re purchasing your first home or planning your next move, understanding the home mortgage process ahead of time can help you feel confident, informed and ready when the right opportunity comes along. To help you prepare to buy a home with confidence, NEBAT has some tips to help you start the process.
Get Your Finances in Order
Before applying for a home mortgage, lenders take a close look at your overall financial picture to determine which loan programs and interest rates you may qualify for. Key factors include:
- Credit Score. A higher score may help you access better rates and loan options.
- Debt-to-Income (DTI) Ratio. This compares your monthly debt payments to your gross monthly income and helps lenders assess affordability.
- Employment and Income History. Steady, reliable income shows your ability to repay the loan.
- Down Payment Amount. The amount you put down can impact your loan terms, monthly payment and whether private mortgage insurance (PMI) is required.
To keep your finances in a strong position, focus on making all payments on time, avoiding new debt before applying and paying more than the minimum on credit cards when possible. Even small improvements made months in advance can positively impact your mortgage options and long-term savings.
Understand Your Down Payment Options
In a perfect world, having a 20% down payment is ideal. It allows you to build equity faster, lowers your monthly payment and helps you avoid additional costs like private mortgage insurance. That said, buying a home doesn’t always require 20% down.
At NEBAT, we offer mortgage options with as little as 0% down for qualified buyers, making homeownership more accessible, especially for first-time buyers. If you already own a home, you may also be able to use your home equity toward the purchase of your next home, reducing the amount you need to bring to closing.
With several mortgage products available, our team works with you to find a down payment option that fits your financial goals, timeline and comfort level.
Meet with a Local Mortgage Lender Early
Meet with a local mortgage lender to establish how much you can afford to spend on a house and see what your monthly mortgage payments may look like.
Your lender can help you:
- Review your financial picture.
- Explore mortgage programs.
- Understand how to get pre-qualified.
When you start house hunting, you can quickly obtain a mortgage pre-qualification letter to accompany any offers, and then you can easily apply online once you have an approved offer.
Download the NEBAT home loan app
National Exchange Bank has many financing programs available to help make the home buying process easy. Our goal is to provide the highest level of service at competitive rates so you can sleep good at night in your home.
Budget for Mortgage Closing Costs
When you prepare to buy a home, there are common charges to budget for including mortgage closing costs. Fortunately, there are ways you can reduce these expenses. Before you apply for a mortgage, ask your local mortgage lender if there are any application fees. NEBAT does not charge application fees; instead, the focus is on building a relationship with the borrower. To reduce your interest rate and monthly payment, you may be able to purchase discount points at closing, which is a one-time fee to “buy” a lower rate.
Private mortgage insurance (PMI) is another expenditure which can be reduced or eliminated. Having good credit can reduce how much PMI you are required to pay. Housing appreciation and having a 20% down payment are two ways to eliminate PMI entirely.
Choose the Right Home Mortgage for You
When it comes to home loans, there is not a one-size-fits-all option. Instead, lenders look at each situation on a case-by-case basis to find the best product for a borrower’s needs. NEBAT has several different loan programs they work with.
If you are a first-time home buyer or are worried about whether your income will meet qualifications, there are programs available to help such as Fannie Mae HomeReady, Federal Home Loan Bank of Chicago Down payment Assistance and other community grants. When you meet with your NEBAT lender, they can help find the best loan program to suit your individual needs.
NEBAT is here to support you throughout your home buying process. Our Home Mortgage page is a great place to start when getting ready to buy your first home.
Home Loans & Mortgage Home Buyer Resources
Why Choose NEBAT?
National Exchange Bank & Trust is a local bank that has several different loan options and has loan representatives ready to help you find the best loan program to suit your individual needs. Since NEBAT services its loans, you can go back to your local office and lender for any questions that come up after the loan closes. We are honored to support you during this exciting time and throughout your homeownership journey!
What are the different types of home mortgages?
National Exchange Bank & Trust offers a variety of mortgage options to help you purchase or refinance your home:
- Fixed-Rate Mortgages. With a fixed rate for the life of the loan, your monthly mortgage payments stay consistent. This is a great option if you want stability and predictability in your home financing.
- Adjustable-Rate Mortgages (ARMs). NEBAT’s ARMs offer a lower initial interest rate that adjusts after a fixed period. Popular options include:
- 3/1 and 5/1 ARMs: Fixed for 3 or 5 years, then adjusted annually. Available for primary residences and second homes.
- Jumbo 3/1 and 5/1 ARMs: Designed for higher loan amounts with similar terms to standard ARMs.
- First-Time Homebuyer 5/1 ARM: Specially designed for first-time buyers with flexible down payment options and no PMI required. Initial fixed rate for 5 years, then adjusts annually.
NEBAT offers flexible terms, competitive rates and loans serviced locally to ensure personalized service. Learn more about which mortgage option is right for you today.
When is the best time to buy a home?
The “best” time to buy a home depends on your personal situation, financial readiness and goals. Factors to consider include your credit score, savings for a down payment, current interest rates and your timeline for moving. While some buyers may take advantage of seasonal market trends, the ideal time is really when you’re financially prepared and ready to make a commitment.
For a deeper dive into timing and tips to know when it’s right to buy, check out our full blog: When is a Good Time to Buy a House?
