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As a young couple with few assets and a short credit history, Ashley and Chris doubted they could make their dream of home ownership come true anytime soon – until they learned about an FHA loan from Bell Bank.
They were going stir-crazy. Quarantined for weeks in the quaint one-bedroom apartment they used to love, Ashley and Chris started arguing over little things – socks on the living room floor, hair in the shower drain.
Before the coronavirus turned them from newlyweds into what felt like cellmates, they’d always been excited to see each other at the end of the day, sharing stories as they tested new dinner recipes.
As COVID-19 dragged on, dinner conversations became nitpicking sessions that left the couple wondering how they were going to survive the pandemic – much less the rest of their lives – together.
"Let’s go for a walk," Chris said one night as Ashley picked up the remote. He could see the doubt in her eyes as she looked down at her sweatpants and reached up to touch her unwashed hair.
"It’s fine. We’ll wear masks," he encouraged. "Besides, no one showers every day anymore."
A smile lit her eyes (for the first time in a while), and Chris felt his own face break into a grin.
They were walking hand in hand through a neighborhood near their apartment when they both stopped and stared. Ashley dropped Chris’ hand and grabbed his arm as she turned to him, mouth open.
The house they always walked to – the one with the front-porch swing and large tree in the back yard – was for sale.
At Bell Bank Mortgage, Ashley and Chris found out they qualified for an FHA loan. Because the Federal Housing Administration (FHA) insures the loan, they could get a better deal – including a down payment they could afford.
Between the FHA loan and historically low interest rates, Ashley and Chris could afford more home than they expected – and since they also qualified for Bell’s no origination fee program, they could save thousands of dollars in closing costs.
Thrilled to learn their mortgage wouldn’t cost much more than they were paying in rent, the young couple left the office with a pre-approval letter from Bell, and something else they hadn’t felt in a while: hope.
While both of their jobs still have them working from home, when Ashley and Chris need space, they’re now able to find it, along with a front-porch swing where they can sit, sipping coffee together every morning as they share stories and dream about the possibilities their new home offers.
Maybe you’re ready. Only one way to find out! Contact us at 952.591.1880, or find a mortgage lender near you. Let’s talk about making room for the things you love, in a home that suits you.
In the meantime, keep reading to find out what you need to know about FHA loans.
While first-time homebuyers can (and often do) qualify for conventional loans, FHA loans, which come in fixed-rate terms of 15 and 30 years, can be a great option for people looking to buy their first home who might need a little help qualifying. With an FHA mortgage, the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development (HUD), insures the loan, so lenders can offer you a better deal with:
A mortgage does not necessarily cost more than paying rent. Interest rates are historically low, making mortgages more affordable, and a shortage of apartments nationwide is pushing rental costs higher.
Our loan payment calculator can help you figure out how much your loan payment might be. And this calculator can help you figure out if it makes more financial sense to rent or buy.
If you’re ready to find out how Bell Bank Mortgage can help you say yes to your first home, click here to find out how we work and connect with a mortgage banker.
If you’re even thinking about buying a home, the first step you should take is to meet with a mortgage lender! Our friendly, experienced mortgage bankers will talk with you about your goals and can answer questions about how much home you can afford, which housing programs you qualify for, and what your closing costs might be.
When applying for an FHA loan, you will need to show proof of steady income. There may be other qualifications, depending on your situation. When you meet with your mortgage loan officer, they will walk you through everything you need to do to qualify.
In some circumstances, you may need to pay mortgage insurance, which is included in your monthly mortgage payment. (In some cases, borrowers will need to pay a lump sum initial premium at closing in addition to the monthly payment.) This is not the same thing as homeowners insurance, which covers financial loss to your home and belongings should disaster strike. (Learn about homeowners insurance coverage options from Bell Insurance here.)
Even if you’re carrying student loan debt, there are some options that might help you:
Student loan payment amounts indicated on the credit report may be used for qualifying purposes. This may help you qualify with a lower debt-to-income ratio. If no payment is listed, the lender will use 1% of the outstanding loan balance or a calculated payment that amortizes the loan over the term.
The first step to ultimately getting the keys to your new home is getting pre-approved for your mortgage. In order to apply, you’ll typically need the following information:
Once you’ve gathered the necessary documents, choose a trusted mortgage expert near you, then apply online or schedule an in-person appointment to get pre-approved.
After submitting your pre-approval application, your lender will follow-up with a phone call or email as soon as possible. Don’t hesitate to reach out with questions throughout the process.
During the pre-approval process, your full credit report will be pulled. Follow these tips to ensure your credit score and history are in their prime:
Closing costs can seem prohibitive, especially if you’re already burdened with car payments and student loan debt. But it doesn’t have to keep you from owning a home.
These 4 tips can help you save $4,000 or more toward your closing costs in one year:
It rounds up every purchase you make and deposits the difference into your savings account. If you round up your purchases by $2, and you make 50 purchases a month, that adds up to savings deposits of $100/month or $1,200/year. Plus, Bell matches 5% of your ChangeSaver roundups, up to $250/year. That means Bell will add $60 to your $1,200 ChangeSaver savings.
If you don’t track your spending or follow a budget, it’s too easy to impulse buy. If you have a budget, are there places where you can cut costs?
Going out to lunch or a movie can seem a lot more fun than brown bagging it or watching a video at home. But in the end, being able to pay your closing costs and get into a new home is a lot more fulfilling. When you feel deprived at not being able to treat yourself to a unicorn Frappuccino, it helps to be able to see and touch a tangible representation of your goals.
Following all of these tips, you can save roughly $4,000-$6,000 in just 12 months. It will take dedication, but when you unlock the door to your new home, it will be worth the sacrifice.
Ready to start your journey to homeownership? Contact us at 952.591.1880, or find a mortgage lender near you to get started!