We compiled the below resources to help you along the process. Contact one of our local Mortgage lenders today to get started!
It is the belief of the Bank that homeownership is central to the health, happiness, self-esteem, and productivity of the residents in the communities we serve as well as in other geographic areas. To assist credit worthy applicants and realize the goal of home ownership, the bank has established a Mortgage Banking Division to provide a variety of residential loan programs including FHA, VA, USDA, Conventional (FannieMae/FreddieMac), Bond Programs, and Nonconforming/Jumbo loans. Gulf Coast Bank is building new branches, new relationships and new employees throughout Southeast Louisiana. Gulf Coast Bank has over 30 Mortgage Lenders ready to assist you! If you have found the right home, let us find the right loan to fit your needs. We want you to build your dreams with us.
Buying A Home
Are you ready to purchase a new home? Do you need guidance on where to start and what you need to do? You are at the perfect place. We have the steps mapped out for you to guide you in the right direction.
Let’s get started
- We will be by your side through the entire journey. During the process we will answer your questions and help you research every available financing option.
- Before shopping around for your dream home, it is important to become Pre-Qualified. Once this step is finalized, you will have a clear understanding of the purchase price range you should begin shopping for. This key step ensures that your time and efforts are put towards focusing on the end goal – Homeownerhship!
First Time Homeowner’s
Becoming a first time homeowner is very exciting. Since this will most likely be your biggest purchase ever, it is important that you fully understand the journey you are embarking on. Below are some steps to get you started:
- Get Prequalified. The process is easy and we’ll help ensure that you are focusing on the price range that best fits your financial goals.
- Lock your Interest Rate. Once you have found the dream home and the most beneficial mortgage program, you should consider locking in your interest rate.
- Make Cash Available. Even though you will be financing your home purchase, you may still need to have cash at the closing table. This will cover all your closing costs, such as an appraisal fee, your down payment and other costs.
Benefits of Homeownership
- Investment. Real Estate has long been recognized as a “solid” investment. Over time the value of the property can increase, which could be a result of development of the surrounding area, inflation or renovations. Before purchasing a home it is important to consider any additional cost that you might incur while living in your new home. This may help you decide which house is best for you.
- Tax deduction. The interest incurred from your mortgage loan is currently tax deductible each year when you file your Federal Tax Return. As a result, you may pay less taxes each year.
- Building Equity. Rather than paying rent and helping your landlord building his/her equity in a property you could be doing it for yourself.
Should I have a professional inspect the home?
Absolutely! This is one step in the home purchasing process that should not be ignored. Any repairs can possibly result in a renegotiated contract resulting in a lower purchase price. Not only does the inspection reveal flaws in the home, it will also provide an in-depth look at any needed maintenance issues and provides a checklist of anything that may need some attention. For more information regarding the benefits of home inspection.
What kind of inspections/test should I have done?
When purchasing a home it is important to learn as much about the home and it’s components as possible. Some of the inspections are required and some are recommended. Often times the cost of the inspections/test can be negotiated in the purchase agreement for the seller to pay.
- Termite Inspection. This inspection may be required by your lender. If the inspection determines the home does have termites, the seller of the home may be responsible for having the home treated prior to closing.
- Lead Based Paint. This inspection is only mandatory on FHA and VA loans and only pertains to homes that were built before 1978.
- Radon Gas. This is an optional inspection. Radon gas is a colorless, odorless, radioactive gas that is released from the ground. It can enter a home through a cracked foundation or by contaminating the water supply. If you smoke and your home has high radon levels, your risk of lung cancer is especially high.
- Asbestos. This is an optional inspection. Normally only found in older homes and may be harmless if airborne. This is something to consider if you plan on renovating an older home.
When purchasing a home, it is always a good idea to spend the money for a professional home inspection. A home inspection can reveal minor to major repairs that you may not recognize on your own. A thorough inspection will include evaluating the home’s exterior, the systems within the home and more. Below are some highlights on why you should consider a professional home inspection.
- No Surprises. A home inspection should identify defects. When defects are identified prior to taking ownership this enables the homebuyer to negotiate repairs or price adjustments within the contract prior to closing. This helps to minimize possible unpleasant surprises and unexpected costs for repairs after you purchase your home.
- Full Examination. When you hire a professional home inspector they will do a full examination of the home. They will review the structure of the home, including the roof, attic, walls, ceiling, floors, windows, doors and foundation, as well as the furnace/air conditioning systems, interior plumbing and electrical systems .
- How Much. The cost of a home inspection can vary depending on the house size, age and possible additional services.
- Let A Pro Do It. Even the most experienced homeowner lacks the knowledge and expertise of a professional home inspector who has inspected hundreds, perhaps thousands, of homes in his or her career. An inspector is familiar with the elements of home construction, their proper installation and maintenance. He or she understands how the home's systems and components are intended to function together, as well as how and why they can or may fail.
When you fill out your initial pre-qualification application you will be asked for your employment history, monthly income, source of funds for closing and down payment and other pertinent information. Your pre-qualification will be based solely on your pre-qualification information. Once you have found a property and made formal application, the items outlined below will be required.
Verification Of Income
In order to verify your income, the lender may ask for the following (not an all inclusive list):
- Most recent pay stub
- Most recent two years W2’s
- Most recent two years complete income tax returns
- Verification of Employment and Income from the employer (this will be requested from the employer by the lender)
Verification Of Funds
All funds needed to complete the loan request will need to be verified. In order to validate assets available for the transaction, some or all of the following may be required:
- Most recent bank or investment company statements.
- Verification of funds sent directly to your bank/investment company by the lender
- 401k or other retirement statements
A credit report is used in determining credit qualification. Credit qualifications vary depending on the program you are applying for.
An appraisal will be required on most transactions to determine the current fair market value of the property. Appraisals are ordered from a panel of local licensed independent appraisers.
During the loan process, the lender will require that a title search be performed on the property. This search will reveal the legal description, the owner of record and any outstanding liens and/or encumbrances on the property. Liens are items such as property taxes, mortgage loans and judgments. Encumbrances may be road maintenance agreements, right of way and utility easements.
When applying for a mortgage, your mortgage lender will need your credit score. They will request it from all three bureaus, Equifax, Experian, and TransUnion, through a credit reporting company. The company then compiles a credit report electronically.
When the information in complied into a report, a numerical score is provided. The numerical score, also known as your credit score, is a composite of your credit history, employment, savings, etc. Since the factors that make up a credit score are constantly fluctuating, a score has the ability to change frequently.
Tips that may help you maintain a good credit score:
Make all payments on time.
Try to avoid applying for new credit unless necessary. When opening a new line of credit or credit account, a new inquiry will be added to your credit report. This could cause your score to drop.
Do not “max out” your credit accounts. It is ideal to keep a balance of 40% or less of the maximum credit limit.
When considering whether or not to refinance, you must first decide what your financial goal is. Obtaining a lower rate is the most common reason for refinancing. You may also wish to take the equity you have built as cash to pay off debt not related to the property. Below are some of the reasons you may consider as a reason to refinance your current loan. Under most circumstances, some equity in the home is required in order to refinance. The amount of equity required, if any, depends on the loan program you qualify for.
Lower Rate. Lowering the interest rate is a great reason to refinance, lowering your rate may reduce your monthly mortgage payment
Arm To Fixed. If you would prefer to fix your rate rather than the uncertainty of an adjustable rate mortgage, you can refinance your adjustable-rate loan into a fixed-rate loan.
Take Equity Out Of Your Home. You can refinance and take the equity out for your home to pay off other debts or pay for other large purchases. You may consider refinancing if you want to buy a second home, pay college tuition or make home improvements.
Consolidate. Refinancing to consolidate your debts
Gulf Coast Bank's Wealth Management Division has several home & mortgage calculators you can use.
Since many different factors determine which mortgage program is best for you, it is best to consult with a mortgage originator. A mortgage originator will help you answer this question by considering some of the following:
- What are your current finances?
- How long do you plan on living in your new home?
- What are your future goals?
What is a Pre-Qualification?
A Pre-Qualification is the first step in determining which program best suits your personal financial situation and goals. A Mortgage Originator will ask you about your income, available funds for down payment and pull your credit report. Once this information is available, your mortgage loan originator will be able to assess your pre-qualification and present financing options to you.
What are closing costs?
Closing costs are fees charged for services performed in connection with your loan closing. These fees will generally (this is not an all-inclusive list) consist of the following:
- Title company fees (title search, title insurance, recording and escrow fees)
- Real Estate Agent commissions (most commonly paid by the seller)
- Lender Fees
- Courier Fees
- Document Preparation Fees
What does it mean to Escrow?
Your lender will set up an account to hold your monthly payment of taxes and insurance, which are included in your monthly mortgage note. Each month your escrow payments will be deposited into this non-interest bearing account, and funds will be withdrawn to pay the tax bill and insurance premiums when they become due each year.
What is LTV?
LTV is an abbreviation for the term Loan-To-Value. The LTV is the difference between your loan amount and the value or purchase price of the property. For example, if you are purchasing a home for $100,000 and are borrowing $90,000 your LTV is 90%.
What is an Interest Rate?
An interest rate is the rate at which interest is paid by a borrower for the use of money they borrow from a lender.
What is an APR?
The term APR (Annual Percentage Rate) is the interest on the loan annualized, and must include certain fees paid by the consumer to obtain the loan.
What is an amortization schedule?
An amortization schedule will give you a detailed table for each regular payment. The table will provide a breakdown of how much of your payment is going to principal vs. interest and then computes the balance for the life of the loan for each.
What does it mean to Lock-In my Interest Rate?
Whenever you decide to proceed with the chosen mortgage program and your loan application is completed, you will be given the opportunity to Lock-In the current Interest Rate. This will guarantee that Interest Rate for a length of time and you will not miss out on that rate if rates should rise.
When should I Lock my rate?
Once you have decided on a mortgage program and the amount (if any) of your down payment, you should consider a Rate Lock.
How long can I Lock-In my rate for?
Interest rates can be locked for as little as 15 days or as long as 60 days. It all depends on how long you and your mortgage loan originator feel is needed to get the necessary paperwork together.
How long will the loan process take?
Expect anywhere from a few weeks to 45 days for a typical mortgage transaction. The time needed to consummate a loan differs greatly depending on the program you are applying for.
What is hazard insurance?
Hazard insurance is also known as homeowners insurance. A typical Hazard insurance policy will also include coverage for “wind and hail”. Hazard insurance is required in order to obtain a mortgage loan on your home. A basic policy provides coverage for hazards such as, wind, hail, fire and other hazards that can cause damage to the home.
What is private mortgage insurance?
Private Mortgage Insurance is an insurance policy which is required when the equity or down payment is less than 20% of the value or purchase price. Mortgage Insurance provides some protection to the lender in the event of default or foreclosure.
What is a Form 4506, 8821, and 9501?
These are all IRS forms which allows lenders to obtain your income tax transcripts for verification purposes.
Can I change the loan amount or program after I have applied for a loan?
Absolutely! It is important to understand that these changes could affect the time needed to close, the amount of closing cost needed at closing, the interest rate and the APR.