DO I QUALIFY?

The best way to determine how much you can afford is by going through the loan pre-approval process. This process requires full documentation and a credit check, which can take a while to attain.

By starting the pre-approval process early in your search, you can quickly identify potential hurdles and focus your energy on homes that are truly available to you. Once you have been approved, this contract is valid for 90 days.

If you would like to get an estimate of where you fall, use our online Mortgage Payment Calculator and Affordability Calculator for free.

Generally, a 20% down payment is required when purchasing a home. However, like other lenders, VanDyk Mortgage offers some low-down-payment options for first-time and seasoned home buyers.

A 30 Year Conventional loan requires a down payment of 5%, and as low as 3% for some first-time home buyers.

A Federal Housing Association loan, better known as FHA, has a down payment reaching as low as 3.5% and interest rates that are generally lower than conventional loans with the same terms.

The VA, or Veteran Loan, requires low interest rates with zero down payments and no monthly mortgage insurance.

It is important to note that small down payments come at a cost. FHA and conventional loans with down payments less than 20% require mortgage insurance, which protects lenders in the case that the loan is not repaid. Likewise, VA loans require a funding fee, which you can choose to include in your monthly loan payments. Choosing a mortgage program with a low-down-payment may be the best option for you, but it is important to keep in mind that the lower the down payment, the higher the interest rate.

For more information on our different loan programs, please refer to our Mortgage Loan Options page.

Saving for your down payment can feel overwhelming and intimidating. The best way to start saving is to create a plan of action that reasonable for your current lifestyle. Every homebuyer’s situation is unique to them. That is why we’ve included a range of techniques for saving towards your big purchase.

• Create a goal. The first step in any money-saving plan is to create a goal. To determine this, it is helpful to first decide which mortgage loan program is right for you. See our full list of Mortgage Loan Programs and the down-payment amount required for each above. Once you have this number, you are ready to start working towards your goal.
• Implement money-saving techniques.

1. Set up automatic transfer to savings account. This can be done through most banks and takes much of the effort out of saving.
2. Save unexpected income such as bonuses or raises.
3. Save tax refunds.
4. Apply for a credit card with cash rewards.
5. Don’t take on any new unnecessary expenses, such as a new car payment or car lease. Try to eliminate expenses that you can.
6. Refinance your student loans.

• Take advantage of first-time home buyer programs. These are state-specific so make sure you know what is available to you based on your geographic location.
• Put your money in a high-yield savings or money market account. These accounts can accumulate interest while remaining liquid enough to be accessed at any time. Another option would be to open a CD, or certificate of deposit. This option will allow your money to accumulate more savings than if it were in a high-yield or money market account. However, it is inaccessible to you for a period of time and has a penalty to open. This is a good way to save money that you do not see yourself needing in the near future.

When purchasing a home, it is important to keep in mind that the total cost includes more than just the original sale price. Unexcepted costs, from insurance to move-in expenses, can leave the homebuyer in both financial and emotional distress and take away from the excitement of their new home purchase – if they don’t plan for them. To avoid such distress, we’ve created a list of some of these unexpected costs in purchasing a new home.
nevitable and should be included in the total cost of your new home.

• Down payment. The cost of the down payment is one of the most well-known costs that goes into purchasing a home, and one that is typically the first expense a homebuyer will begin to save towards. Down payments vary depending on what type of mortgage you choose. To see the different mortgage loan programs and down payment costs associated with those, visit our Loan Options page, or contact one of our loan experts directly today.
• Closing costs. These costs, which begin to accrue as soon as you start the home buying journey, can often become overlooked, but are extremely important to budget for. These can include, but are not limited to; the application fee, origination and/or underwriting fees, title insurance, title search fee, and in some cases a transfer tax.
• Move-in expenses. From hiring a moving truck to purchasing cleaning supplies, moving expenses are inevitable and should be included in the total cost of your new home.
• Insurance. There are two types of insurance to consider when purchasing a new home.

1. Homeowner’s insurance. This type of insurance protects you from unexpected damages to your home such as effects from a natural disaster, theft, or vandalism, to name a few. Though this insurance is not required by law, it is highly recommended and can be required for some lenders.
2. Private Mortgage Insurance. PMI or private mortgage insurance is required when a homebuyer puts down less than 20% for their down payment. This insurance provides protection for the lenders if the buyer defaults on their loan. It’s helpful to note that this insurance does not last the lifetime of the loan and is eventually eliminated as the buyer pays down their mortgage.

• Property Taxes. These taxes, that are often included in your monthly mortgage payments, vary in geographic location. These are a variable cost that is not always based on the initial price you paid for your home. Meaning, they change over time, as the value of your home changes. Some possible reasons for an increase in property taxes would be a home improvement to you or a neighbor’s home, or the development of a new school.
• HOA. HOA, or homeowner’s association, fees are applicable when buying a home or condo in a community that is run by a homeowner’s association. These fees are used towards services provided by the association such as security, maintenance, landscaping, and amenities like a pool or a gym. These also vary from place to place.
• Home maintenance, repairs, and utilities. Having a fund available for things like maintenance, repairs and your new utility bill is always a good idea when purchasing a new home. Some experts suggest saving 1% of the home’s value as an emergency maintenance fund in the case that these almost certain expenses arise.

Saving for your home will take time, so it is a good idea to start even before you begin your search. And once you start, it could take a while to find your perfect home.

Putting even a small amount of money away is a good idea, but if you find it difficult to work towards an undefined goal, it could be helpful to look at homes in the area that you will likely buy. Here, you can compare prices in the market, research mortgage options for you, and start to get an idea of how much you will need for a down payment.

Please refer to our full list of ‘Costs to Consider’ above.

Fixed rate loans, whether at 15- or 30-years along with a fixed interest rate, will not change during the life of the loan. However, monthly mortgage payments also include insurance and property taxes, which can in fact fluctuate.

Property taxes increase when the states government offers a service, like repairing the roads, building a public park or a new school. This is also an important thing to plan when deciding where you plan to purchase your home.

Once you are ready to start your home search, you’re ready to start the loan process. See below for our guide to the loan process:

1. Pre-Approval. The first stage is to apply for a pre-approval, which will give you an idea of what you can truly afford. For more information on this, it is helpful to refer to our Pre-Approval Document Checklist.
2. Submit an application. After your offer has been accepted, you’re ready to submit your application! At VDM, there are 3 ways to apply: Online, over the phone, or in person. Some documentation, such as a government-issued photo ID, home address and income are required at this stage. For a full list of required documentation, please refer to our Application Checklist in the Loan Survival Guide.
3. Loan Submission. Once your application is complete, your loan package will be sent to a Loan Processor who will verify all the necessary documents have been received. If they have, all documentation is sent to underwriting for approval.
4. Conditional Approval. At this stage, underwriting has reviewed and your loan is conditionally approved based on the receipt of possible additional documentation needed to clear your loan for closing.
5. Final Approval. A loan processor has reviewed the conditional documentation for completeness and sends them to back to underwriting for final approval. At this stage, your loan officer prepares you for the closing process.
6. Closing. A title company or closing attorney prepares documents which are reviewed and signed by you. And… voila! You’ve just become a homeowner! Congratulations and welcome to your new home!

1. Pest Inspection. It is best to ensure these issues are resolved before escrow closes, in the case that further action needs to be taken by either the buyer or the seller.
2. Low Appraisal. In the case of a lower-than-expected appraisal, the seller may have to lower the selling price, or the buyer will have to pay the difference in cash. We think it is always a good idea to get a second opinion.
3. Claims to the title. Title insurance protects both the buyer and lender against claims on the property. If there is in fact a lien or a claim, this will have to be resolved before the transaction can move forward. By performing a title search, you can ensure that no party – including the IRS, state or relative of the seller – has any legal claim to the property.
4. Home Inspection Defects. Most individuals sign a home inspection contingency which allows the purchaser to back out of a deal without penalty in the case that there is a major defect in the home inspection. If a contingency is not put in place, the purchaser can lose the entirety of their earnest money down. If the sale proceeds, there may be a delay due to the time taken to go through negotiations.
5. Buyer or Seller Doubt. Having cold feet is a very real phenomenon, and one that can certainly delay the closing of the purchase of a home. Unless there is a legitimate reason to back out of the purchase, i.e., not waiving a contingency or a deadline not being met, the buyer will lose their earnest money should they decide not to go through with the sale. This compensates the seller for the time that the property was taken off the market and missing out on other possible offers. In the case of a seller having cold feet, the buyer is eligible for damages from the seller.
6. Financing Falls Through. It is best practice to get pre-approved, in the very beginning of your homebuying journey, to secure the best mortgage loan program for you. However, there are cases, such as, a drastic increase in interest rates, a change or loss in employment, or a decrease in credit score, when financing falls through. If this happens, the homebuying process can be delayed or even stopped altogether.
7. High Risk Location. In some locations, homes may require Hazard Insurance. By requesting a National Hazard Disclosure Report, the buyer can see if any national hazards in the area will affect their home. Hazard Insurance is often greater than homeowner’s insurance and can certainly delay the closing process. To avoid this, you can ask your agent or city planner about national hazards in your area.
8. Survey Issue. Before closing on your home, a qualified land surveyor will draw up the boundary lines for your property. In the case of an infringement, either by a neighboring tree or fence, you may have to hire an attorney to facilitate a lot line agreement.

In addition to exceptional customer service and over 30 years of experience, we provide an effortless process that takes the stress out of applying for your loan. Please refer to our Road Map to Homeownership for a step-by-step guide of the process.

Most loans close in 30 days or less. We make it a priority to never miss a contract date.

Please reference our Documentation Checklist for a full list on what you will need to collect prior to applying for your mortgage loan.

It is best practice to get pre-approved before looking for a home. This way, you are aware of how much you are approved to spend. This will help narrow down your search field and save both you and your real estate’s time.

Working with a real estate professional can be extremely helpful – especially for first time homebuyers with little to no experience. They can save you time, money, and the stress than can come with navigating the unknown of the real estate market. Here are a few reasons hiring a real estate professional can be a good idea:

• Paperwork. Real estate professionals provide assistance with all the necessary paperwork and disclosures required in today’s heavily regulated environment. Their expertise can help save time by avoiding common errors made by those who are unfamiliar with the laws and regulations.
• Experience. Highly educated and with years of real estate experience, a professional knows the ins and out of the entire sales process, saving you both time and unnecessary distress.
• Negotiations. Real estate professionals often act as “buffer” in negotiations with all parties throughout the entire transaction. Which can be helpful and even necessary when negotiations become more complex.
• Pricing. Lastly, real estate professionals can look to their understanding of today’s market when setting an offer price. Not only do they have the years of experience behind them, but they also have access to online tools and resources that are only available to industry professionals.

If you need help finding a real estate agent, reach out to one of our loan originators for a referral.

When thinking about owning a home, many will immediately think of the cost. However, it is important to look at all the benefits that come along with it.

• Build Equity. When you make the decision to purchase a home, you are making a great financial investment. As you continue to make your mortgage payments, you will continue to build equity, which is a considerable asset that can provide assistance with almost any future financial need.
• Tax Advantages. Both the interest on your mortgage and your real estate taxes are tax deductible, which is not the case when you rent.
• Freedom and Control. Owning your home provides you the freedom and control to make any wanted changes, such as updates or renovations.
• Stability. Fixed rate mortgage payments, often provides financial stability, as opposed to rent which can increase as when you sign a new yearly lease.
• Pride and Sense of Community.
  Many take pride in owning a home, as an asset and an expression of your own personal style. Owning a permanent residence can also build a sense of community amongst fellow homeowners within your neighborhood.