A common type of home loan is a conventional mortgage. These are the fixed term and fixed rate mortgages that aren’t guaranteed or insured by any government agency. Conventional loans are between the lending institution and the borrower.
Pre-qualification or Pre-approval
If you are a first-time homebuyer, you may wish to go through with a pre-qualification or pre-approval, but what is the difference?
Pre-qualification for a mortgage entails meeting with a mortgage originator to see how much of a mortgage you might qualify for based upon easy to identify information such as your income, debt, downpayment availability, and standard housing payment ratios. This process gives buyers an idea of their price range before they begin shopping but is in no way a guarantee of financing.
Pre-approval, on the other hand, is a more in-depth process in which the buyer selects his or her lender first and applies for a mortgage. The majority of the due diligence on the borrower (the buyer) is done by the bank in advance of identifying the home to purchase. Income and debt are reviewed thoroughly and the outcome of the process includes a buyer knowing that as long as the property he or she selects meets the necessary criteria that they can feel confident in obtaining financing for the real estate purchase.
Neither pre-qualification nor pre-approval are required to begin shopping for a home to purchase.
Beginning the application process
The application for a conventional mortgage can begin online or in person at United Bank. Buyers will be asked to provide many details including legal identification, authorization of credit check, other loan information, personal information, employment and income, assets and liabilities, and information about the real estate purchase if it is available.
United Bank staff is happy to assist customers with the application and many customers find the online version easy to use and convenient to work with any time of day.
Commonly called a VA Loan, this mortgage is guaranteed by the United States Department of Veterans Affairs and may be issued by qualified lenders such as United Bank. The government guarantee offers those eligible with more favorable terms as they wish to buy, build, repair, retain, or adapt a home for their personal occupancy.
Rural Housing or USDA Loans
This government guaranteed mortgage program helps lenders provide low- and moderate-income households the opportunity to own adequate, modest, decent, safe, and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants may build, rehabilitate, improve, or relocate a dwelling in an eligible rural area. Only approved lenders, such as United Bank, may assist you with the Single Family Housing Guaranteed Loan Program.
WHEDA First Time Homebuyer Advantage Loans
WHEDA is the Wisconsin Housing and Economic Development Authority and this program offers a preferred fixed interest rate for qualified first-time home buyers who income qualify and meet purchase price limits among other criteria. The statewide program is only available through participating WHEDA lenders, such as United Bank. WHEDA has other loan programs available, as well.