Download Eight Steps to Your New Front Door

Eight Steps
to Your New
Front Door
A Guide to Your
Gate City Bank Home loan
Step 1: Pre-Approval
Step 3: Application
Congratulations on your decision to purchase a
new home! A home purchase may be your largest
and most important financial transaction, so it’s
important to take the right steps in order to make
the right decisions.
At this time, your Mortgage Loan Officer will discuss
the following:
Start the convenient loan application process for your
Gate City Bank home loan today:
• Truth in Lending Disclosure: This lets you know
what your estimated annual percentage rate of
interest (APR) will be and any other program
features that apply.
OPTION 1: Call to make an appointment with a
Mortgage Loan Officer.
OPTION 2: Go to gatecitybank.com
Your Gate City Bank Mortgage Loan Officer will
provide you with the estimated monthly mortgage
payment amount for which you have been preapproved. They will explain loan programs and
requirements, as well as financing options to help
you determine the best mortgage product for you.
Your Mortgage Loan Officer will provide you with a
pre-approval letter, so if you haven’t started house
hunting already, now is the time!
Please see the list below for the items that your
Mortgage Loan Officer will need to complete the
pre-approval.
• Good Faith Estimate of Settlement Costs: This
details the loan amount and all related charges and
fees.
• An application deposit, refunded at the time of
successful loan closing.
• Other forms associated with the specific loan
program you have selected. Your Mortgage Loan
Officer will explain these forms to you at the time
of signing.
• Interest rate and the terms of your loan program.
You may be asked for additional items that are
required for the loan approval process. Once we
receive your confirmation to proceed, your Mortgage
Loan Officer will order an appraisal (see step 5) as well
as title insurance work (see step 6).
Step 2: Finding a Home
Once you have an accepted offer on a property,
notify your Mortgage Loan Officer. Your Mortgage
Loan Officer will need a copy of your signed purchase
agreement and there will be additional forms for you
to sign to continue processing your loan.
Checklist of items needed to begin the process:
Assets:
Other items may include:
Copies of the most recent statements for checking,
savings, investments, and retirement accounts.
• Purchase agreement for the home
Address Information:
• VA applicants will be asked for a copy of DD214 or
an original statement of service and a certificate of
eligibility.
Current address for the past two years (If you have
been at your current address for less than two years,
please provide all addresses you have lived at over the
past two years). If it is a rental residence, provide the
landlord’s names, full address, and phone number.
*First-time home buyers - please provide three years past address.
Employment Records:
• Your most recent year-to-date pay stub(s)
• Copies of your W-2s and completed Federal Income
Tax Returns from the past two years
*First-time home buyers - please provide Federal Tax Returns for the
past three years.
• Divorce decree (if applicable)
• If you are applying for a refinance, you will need
to provide proof of homeowner’s insurance
coverage amount, premium amount, and the most
recent statement for the mortgage loan(s) you are
refinancing.
*If any of the information you previously provided changes, such as
an employment change or a change in assets, let your Mortgage Loan
Officer know.
This checklist is also available at
gatecitybank.com
Step 4: Homeowner’s Insurance
Step 7: Loan Approval
Now, you will want to start shopping for homeowner’s
insurance coverage. Your Mortgage Loan Officer will
provide you with an information form for you to give
to your agent/agency. Your policy decision should be
made no later than 14 days prior to closing. Once you
have selected an agent/agency, let your Mortgage
Loan Officer know who you have selected.
During the final loan approval process, a Gate City
Bank Mortgage Loan Underwriter reviews your loan
package, appraisal, total debt ratio, credit history,
employment history, and other required information
to make sure it conforms to all of the guidelines
required for the loan program you have chosen. The
final loan approval process may take 7-10 days, once
the Underwriter has received all of the information.
Step 5: Home Appraisal
Your Mortgage Loan Officer will make all the
arrangements for the appraisal. Gate City Bank will
use an approved third-party appraisal company that
will inspect the property and compare it to similar
properties that have sold in the area to determine the
home’s current appraised value.
Once the appraiser has completed the appraisal and
submitted it to Gate City Bank (which may take 3-8
weeks), your Mortgage Loan Officer will visit with you
regarding the appraised value and any items that may
affect your loan approval process. You will also receive
a copy of the appraisal.
Step 6: Title Insurance
Gate City Bank will obtain a title insurance
commitment. The title insurance commitment provides
Gate City Bank with the legal details of the property
including any liens against the property (i.e. other
loans). If you choose, you can obtain owner’s coverage
for title insurance. You can obtain information
regarding this from your Mortgage Loan Officer or the
title company.
Step 8: Closing
Congratulations! You’re finally here! Gate City
Bank will prepare the documents that you will sign
at closing. The title company will prepare the final
settlement statement which includes all of your closing
costs. Your Mortgage Loan Officer will notify you with
the total dollar amount that you will need to provide
to the title company. This amount needs to be in the
form of an official/cashier’s check or wire transfer
payable to the title closing company.
Your Mortgage Loan Officer will be present at the
closing, as well as a representative from the title
company, and your Realtor, if applicable.
Notes: _________________________________________
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HOME LOANS
Locally approved, serviced, and financed!
•The servicing of your loan
stays at Gate City Bank for
the entire life of the loan.
•Insurance claim checks can
be brought to any Gate City
Bank office.
•Payments can be made at any
Gate City Bank office.
•Your questions can be
answered at any Gate City
Bank office.
COMMON
LOAN TERMS
Additional Principal Payment: A way
to reduce the remaining balance on the
loan by paying more than the scheduled
principal amount due.
Adjustable Rate Mortgage (ARM):
A mortgage with an interest rate that
changes during the life of the loan
according to movements in an index
rate. Sometimes called AMLs (adjustable
mortgage loans) or VRMs (variable-rate
mortgages).
Down Payment: Part of the purchase
price of a property that is paid in cash
and not financed with a mortgage.
Equity: The amount of financial interest
in a property. Equity is the difference
between the fair market value of the
property and the amount still owed on
the mortgage.
Escrow Payment: The part of a
mortgagor’s monthly payment that is
held by the servicer to the pay for taxes,
hazard insurance, mortgage insurance,
lease payments, and other items as they
become due.
Annual Percentage Rate (APR): The
cost of credit, expressed as a yearly rate
including interest, mortgage insurance,
and loan origination fees.
FHA Mortgage: A mortgage that
is insured by the Federal Housing
Administration (FHA). Also known as a
government mortgage.
Appraised Value: An opinion of a
property’s fair market value, based on an
appraiser’s knowledge, experience, and
analysis of the property.
Fixed Rate Mortgage (FRM): A
mortgage interest rate that is fixed
throughout the entire term of the loan.
Asset: Anything owned of monetary
value including real property, personal
property, and enforceable claims against
others (including bank accounts, stocks,
mutual funds, etc.).
Closing: A meeting held to finalize the
sale of a property. The buyer signs the
mortgage documents and pays closing
costs. Also called “settlement”.
Closing Costs: These are expenses - over
and above the price of the property that are incurred by buyers and sellers
when transferring ownership of a
property. Closing costs normally include
an origination fee, property taxes,
charges for title insurance and escrow
costs, appraisal fees, etc.
Credit Report: A report detailing
an individual’s credit history that is
prepared by a credit bureau and used by
a lender to determine a loan applicant’s
creditworthiness.
Default: Failure to make mortgage
payments on a timely basis or to comply
with other requirements of a mortgage.
Delinquency: Failure to make mortgage
payments on time.
Deposit: This is a sum of money given
to bind the sale of real estate, or a sum
of money given to ensure payment or an
advance of funds in the processing of a
loan.
Interest: The fee charged for borrowing
money.
Late Charge: The penalty a borrower
must pay when a payment is made a
stated number of days after the due date.
Loan: A sum of borrowed money
(principal) that is generally repaid with
interest.
Loan-to-Value (LTV) Percentage:
The relationship between the principal
balance of the mortgage and the
appraised value (or sales price if it is
lower) of the property. For example,
a $100,000 home with an $80,000
mortgage has an LTV of 80 percent.
Lock-In Period: The guarantee of an
interest rate for a specified period of
time by a lender, including loan term and
points, if any, to be paid at closing.
Maturity: The date on which the
principal balance of a loan becomes due
and payable.
Mortgage: A legal document that
pledges a property to the lender as
security for payment of a debt.
Mortgage Insurance: A contract that
insures the lender against loss caused by
a mortgagor’s default on a government
mortgage or conventional mortgage.
Mortgage insurance can be issued by a
private company or by a government
agency.
Note: A legal document that obligates
a borrower to repay a mortgage loan at
a stated interest rate during a specified
period of time.
Origination Fee: A fee paid to a lender
for processing a loan application.
Prepayment Penalty: A fee that may
be charged to a borrower who pays off a
loan before it is due.
Pre-Approval: The process of
determining how much money you will
be eligible to borrow before you apply
for a loan.
Principal Balance: The outstanding
balance of principal on a mortgage not
including interest or any other charges.
Principal, Interest, Taxes, and
Insurance (PITI): The four components of
a monthly mortgage payment. Principal
refers to the part of the monthly payment
that reduces the remaining balance of the
mortgage. Interest is the fee charged for
borrowing money. Taxes and insurance
refer to the monthly cost of property
taxes and homeowners insurance,
whether these amounts that are paid into
an escrow account each month or not.
Rate Lock: A commitment issued by a
lender to a borrower or other mortgage
originator guaranteeing a specified
interest rate and lender costs for a
specified period of time.
Real Estate Settlement Procedures
Act (RESPA): A consumer protection law
that requires lenders to give borrowers
advance notice of closing costs.
Recording: The noting in the registrar’s
office of the details of a properly
executed legal document, such as a deed,
a mortgage, a satisfaction of mortgage,
or an extension of mortgage, thereby
making it a part of the public record.
Security: The property that will be
pledged as collateral for a loan.
Underwriting: The process of evaluating
a loan application to determine the risk
involved for the lender. Underwriting
involves an analysis of the borrower’s
creditworthiness and the quality of the
property itself.
VA Mortgage: A mortgage that is
guaranteed by the Department of
Veterans Affairs (VA). Also known as a
government mortgage.
(701) 293-2400 • (800) 423-3344 • gatecitybank.com
Member FDIC
GC 1050 (R 03/15)