You are about to link to an external website. nbkc bank is not responsible for the availability of content and does not represent either the linked website or you, should you enter into a transaction. We encourage you to review the privacy and security policies for any hyperlinked site which may differ from nbkc bank.
Source of Funds
Income
Gift Funds
Debts
Refrain from purchasing items that involve having your credit checked during this process, like a car.
A pre-qualification gives you a price range for your home search but a pre-approval enhances your offer by showing the seller that you are qualified to purchase the home. Your qualification is dependent on three things:
Federally insured loans, very common, 3.5% down, no income restrictions
VA guaranteed loans for veterans only, 0% down, no income restrictions
Privately insured loans, very common, no income restrictions
3% down in select areas, some income restrictions, lower monthly mortgage insurance costs
Now that you’re pre-approved, it will be beneficial to understand the terms used when selecting a loan program.
Shows you your monthly payment and a detailed account of your closing costs and pre-paid items. Use the Loan Estimate to determine which loan fits your situation.
The cost of your mortgage loan as a yearly rate. May be higher than the mortgage rate stated in your mortgage or deed of trust note since it includes various costs (fees, etc.).
Funds will be needed for the down payment, closing costs, and prepaid items. Your real estate agent will be able to help with an itemized breakdown of these costs.
Points, often called discount points, are prepaid interest at closing that permanently buy down the interest rate of your loan. Most loans are priced at “par,” where borrowers do not pay points.
The broader the difference between the APR and the note rate, the more you should question excessive costs.
Mortgage insurance reduces the risk for lenders and allows them to offer loans to borrowers who might not otherwise qualify for a mortgage due to a low down payment.
A VA funding fee that is paid to the Veterans Administration on all VA loans, with the exception of disabled veterans, when the VA sends a waiver.
Reservists, or those who serve in the National Guard, may also be eligible for a VA-guaranteed home loan. The first-time user funding fee is 2.4% on 1–% LTV’s and 3.30% if previously used. The fee may still be financed in the loan or note.
MIP is paid to HUD on all FHA loans regardless of the loan-to-value ratio (LTV).
In addition to a UPFRONT mortgage insurance premium (UF-MIP), there is a MONTHLY payment, along with real estate taxes, hazard insurance, and PI.
The UF-MIP will be added to the BASE mortgage amount and financed. The annual premium is calculated on the unpaid base principal balance without the UF-MIP added to the base loan.
Keep an eye out for different terminology. Mortgage insurance is also referred to as a Funding Fee on VA loans, MIP on FHA loans, and MI on PMI on conventional loans.
Hey, you’ve made it to the fun part. Here are a few nice-to-knows while you hunt for your future home:
When choosing whether to work with a realtor, it is important to understand the legal obligations within the relationship. Your exclusive buyer’s agency agreement is a legally binding contract that provides both parties clear expectations and benefits throughout the home-buying process.
The MLS is an inventory of houses for sale that buyers have access to through their realtor. People use it to get info about comparable sales (aka, comps) in an area. This helps realtors determine value.
A purchase offer (aka sales contract) is legally binding, so you’ll want to make sure all parties agree, and all information is accurate, before signing. This contract typically includes:
Buyer’s and seller’s legal names
Postal address of property and legal description to government
The amount offered to seller for purchase of the property
$500 - $1,000 is common as representation of your intent to purchase
As the holder of the earnest money
Uses the terminology “on or before”
Counter offers are common when negotiating, and buyers should rely on their realtor’s professional negotiating skills for this purpose. It is important to try to remain objective and rational during the process. Once all parties sign the contract, all terms and conditions are legally binding.
A loan underwriter audits the complete loan package, ensuring compliance with investor requirements and automated conditions for purchase in the secondary market.
The final walk-through of the home, arranged through the buyer’s agent, is completed to confirm that the property’s condition has not changed, any other agreements that have been made, and the terms of the contract will be met.
The seller(s) normally will go to the Title/Escrow company prior to the closing date to sign the warranty deed, along with other documents. You will also go to the Title/Escrow company to sign documents.
Starting the homebuying journey can be a daunting task — but you’re not alone with nbkc.
Try our free online mortgage rate calculator.
The interest rates shown below are based on your credit history, property type and loan amount on a 45 day lock period. The actual interest rates and fees available to you may vary and may differ from the rates displayed.
*The estimated savings statement is calculated over a 5-year period utilizing interest savings. Home purchase in the state of Missouri with a Loan-To-Value of 80%, Loan amount = $400,000, Single Family, Primary Residence, FICO=780, Term=30-year conventional loan as of 7/17/2024. Average level savings of $6840 as compared to an average of national mortgage lenders in a comparative study conducted by Curinos.com. Individual savings may vary based on credit score, Loan-To-Value, location and how long the loan remains active. This is subject to loan requirements, underwriting and approval.