Pre-qualified
Buying a home should be an exciting time in your life.  Don’t let uncertainties turn it into a stressful one.  The first step is to gain some overall knowledge of the home buying process and determining what you can afford. You can be pre-qualified by the bank.  This determines the maximum mortgage loan that you could get based on your financial information. However, keep in mind that getting pre-qualified does not guarantee that you will get approved for the loan.  

Knowing the maximum amount of money that you can get for a mortgage is helpful when you start looking for the perfect home.  It is also shown that typically, monthly mortgage payments should be around 28-30 percent of your total monthly gross income.      

Pre-approved
Pre-approval is a guarantee of the loan; however, it is not yet a mortgage contract.  In order to get pre-approved, you will need to fill out a loan application and the bank will need your credit history, employment information, and possibly some additional information. 

Getting pre-approved is helpful for several reasons.  First of all, if you are pre-approved while interest rates are low, you may be able to lock in that low interest rate.  Pre-approval may also help you negotiate with the seller because the seller knows that you are able to get the loan. 

Loan Process
When you come to the bank to apply for a loan it is a good idea to have a general idea of what items you may need to complete the loan application.  Some of these items include:

• Last 30 days paycheck stubs
• Addresses (2 yrs)
• Names and addresses of all employers (2 yrs)
• W-2’s (2 yrs)
• Names, addresses, account numbers, balances, and monthly minimum payments on all open loans and credit cards
• Most recent bank statements for all checking and savings accounts (2 months)
  

Closing Costs and Down Payment      
When you are closing a loan there can be fees from closing costs and also money due for the down payment on the home.  These costs may seem overwhelming at times for those who are not yet financially secure.  However, there are several programs that help with these costs.

Assistance Programs
Security Federal offers a program for which qualified first time home buyers can receive up to $5,000 down payment assistance.  The money is distributed on a first come/first serve basis to qualified applicants.  If you own and occupy the property for at least five years, you do not have to repay any of the grant money. 

We also offer a program called Magic Money.  It is offered exclusively from Affordable Housing Corporation.  For every dollar you save to help buy your home, it will be matched three to one.  The minimum amount you need to save is $500 and the maximum amount you can save to be matched is $1,500.  If you were to save $1,500, you would have a total of $6,000 to use for closing costs and down payment. 

If you are want more information on the programs or want to know if you qualify, please contact Security Federal Savings Bank. 

Predatory Lending
Predatory Lending causes people to lose their homes and investments because of predatory lenders, appraisers, mortgage brokers, and home improvement contractors who:

The U.S. Department of Housing and Urban Development has offered some tips on how to protect yourself against predatory lending.