Mortgage Center

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Home Ownership

Buying a home is exciting and a little frightening all at the same time. Take some time to review our resources below to help you through your home buying process:

Our Lenders

Tracy Watters

Senior Vice President

Mortgage Center Manager

Head of Mortgage Lending – West

Peggy Overschmidt

Senior Vice President

Head of Mortgage Lending – East

Mortgage Payment Calculator

This calculator will compute a mortgage’s monthly payment amount based on the principal amount borrowed, the length of the loan and the annual interest rate. This calculator will also compute your total mortgage payment which will include your property tax, property insurance and PMI payments. Then, once you have computed the monthly payment, click on the “Create Amortization Schedule” button to create a report you can print out.

Purchase Center

Are you thinking about buying a new home? Is it your very first home, or has your family outgrown your current home? Whatever your circumstances may be, the outcome is the same: you want a new house! We hope that you will find this information helpful as you start the process of buying a home.

The First Step to Buying a Home

The first step to buying a home is talking to a Sullivan Bank lender. We’ll help you pre-qualify, get an idea how much you can afford, help you understand your credit, understand the different loan products available to you, and what you can expect as you start looking. A pre-qualification doesn’t guarantee that you will get a loan, but it may be expected when you make an offer on a home. It assures the realtor and seller that you are serious about buying, and that you have taken the right steps toward buying a home; starting with financing. 

What Can You Afford?

Determining how much home you can reasonably afford is an important step in understanding the buying process.

  1. The first step is to determine your gross monthly income.
  2. Next, determine your total monthly debt. This does not include utilities, car insurance, or daily living expenses.
  3. Your monthly housing expense, including taxes and homeowners insurance should not exceed around 28 – 30% of your gross monthly income.
  4. In addition, your monthly housing expense plus your other total monthly debts cannot exceed 41 – 43% of your gross monthly income. Each of us has a unique situation and different loan programs may be more flexible than the suggested guidelines, but this will give you a starting point. At Sullivan Bank, we have an easy chart that helps you to calculate the guidelines above, and we are always happy to help you through it.

Tips for the First Time Home-Buyer

Determining how much home you can reasonably afford is an important step in understanding the buying process.

  1. Know your credit. Understanding your credit and taking the time to discuss any credit issues with a qualified Sullivan Bank Lender may mean waiting a few months to buy a home, but it may also help you afford more home, and get a better interest rate.

  2. Look for first time home buyer’s programs. Some are tailored for people with slight credit issues, and most can help people who haven’t saved a lot for a down payment.

  3. Get pre-qualified! Pre-qualification is a pretty casual process, where the lender will look at your credit, discuss your income, and tell you how much home you can afford based on the information you have given. It doesn’t cost a thing and will help make the process of buying a home much easier.

  4. Don’t borrow too much money. Buying your first home doesn’t necessarily mean that you should get the biggest loan (and home) that you can qualify for. Budgeting is an important part of homeownership. There will be unexpected expenses that occur when you own a home, and it helps if you can be somewhat prepared. It is a good idea to have 3 months reserves (equal to 3 months’ worth of expenses) after closing to help you handle the added costs of owning a home.

  5. Trust your lender. At Sullivan Bank, we have the same standards and ideals that the Bank has had for over 100 years. We are your friends, our kids go to school together, we shop together, and we have your best interest at heart. We are your community mortgage lender, and want to stay that way. You can trust that your loan is the best that the industry has to offer.

  6. Plan for closing costs. There are fees involved with buying a home, and you should be prepared to pay for those fees in some way. Each loan program has guidelines that allow for the fees to be paid in full or in part by the seller, the lender, a gift, from a loan, or your 401K. You should always understand what your expected closing costs will be and how much of that you might have to come up with on the day of closing. A good faith estimate will be provided to you after you apply for a loan, and at Sullivan Bank, we will also give you an estimate when you apply..

Refinance Center

Thinking about refinancing your home can be just as daunting as it was when you bought for the first time. Mortgages are always changing and the media is full of advice on what you should or shouldn’t do. How do you make sense of it all? We can help. We will sit down with you, discuss your current loan, look at options, and actually crunch numbers before you start spending time or money on refinancing. No sales pitch, no gimmicks, just sound advice that you can trust.

When is Refinancing Worth It?

Refinancing is a big decision. Consider how long you expect to live in the home, if you can roll the closing costs into the loan, if you want cash out to pay off other debts, and what the difference will be in your payments. Divide the total costs by what you will save each month – the result is how many months it will take to break even on the deal. This will help you decide if refinancing is right for you.

How Much of Your Home’s Value Can You Borrow?

This depends on a variety of factors. Most borrowers can borrow up to 80% of the value of their home, but there are several loan options to borrow more; private mortgage insurance, or a government loan. An appraisal will require 3-5 comparable homes that have sold within the last 12 months, within a certain mile radius of your home. We can help you understand the appraisal process and what loan options are available with your appraisal valuation.

Financial Calculators

Information and interactive financial calculators are made available to you as self-help tools for your independent use. We cannot and do not guarantee their accuracy or their applicability to your circumstances.

Mortgage Resources

Homeownership Counseling

Mortgage FAQ's

What if you have had credit problems?

Your credit history is a very important consideration in your ability to qualify for a loan. If you know that you have credit issues, now is the time to sit with one of our lenders and let us help you figure out how they can be repaired. This doesn’t mean that you will be automatically turned down for a loan, but if you are approved, having credit issues can affect the interest rate that you are charged, as well as the amount of any PMI.

What is PMI?

PMI (Private Mortgage Insurance) is insurance that provides your lender a way to recoup its investment if you are unable to repay your loan. It is usually required with a conventional loan when the loan amount is more than 80% of the lesser of the home’s value or the purchase price, depending on whether you are buying or refinancing. If you buy a home and you don’t have 20% as a down payment, you will probably have to pay PMI. 

What are closing costs and who pays for them?

Closing costs are the fees that are charged for the services involved in getting a loan. These expenses are charged to the borrower and cost between 3% and 6% of the amount being borrowed. Typical closing costs include loan originations fees, credit report, title search and insurance fees, property appraisal, recording fees, title company fees, and prepaid interest, as well as escrow account deposits, pro-rated property taxes, and property insurance. Closing costs can vary depending on the type of loan program. 

The borrower is responsible for most of the closing fees, but they can be negotiated into the purchase price or added to the purchase price, depending on the loan program. Depending on the loan program, closing cost may qualify. Also be paid by the seller or lender. You might also receive a gift from a qualifying relative, secure a loan, or draw from a retirement fund.

What is hazard insurance?

Hazard insurance is the insurance that you as the homeowner will have to protect your interest in the property. It protects you against damages to the property caused by fire, storm, or other unforeseen occurrences. Typically proof of one year of insurance will be required before you can close on a loan. You are allowed to pick the insurance company yourself, and simply need to make sure that the lender has ongoing proof that you have current, acceptable hazard insurance. This monthly premium can be included as part of an escrow account.

Why do you need title insurance?

A title search and report will review any impediment that would prevent you from purchasing a home with a clear title. It will show liens, restrictions, and interests of others that own the property, easements, and anything that might limit the use of the property. A policy is issued by a title insurance company and will insure the homeowner against errors in the title search or report. The cost is dependent on the cost of the property and the work involved with clearing up the title. Typically the search is paid for by the seller and the actual policy is paid for by the buyer. An owner’s policy is only needed when you purchase the property, however; a lender will typically require a new search and insurance policy to protect them each time the property is used for collateral.

What is APR?

APR (Annual Percentage Rate) is the total cost to borrow money from the lender over the life of the loan, including the interest rate charged to borrow the money, certain closing costs and lender points. By comparing the APR to the actual interest rate, you will be able to see a true picture of what the loan is costing you. If the APR is much higher than the actual interest rate, extra closing fees or points may have been charged.

What is the rescission period?

The rescission period is the waiting period of 3 business days between signing loan papers and the disbursement of the loan proceeds. It is required by federal law on almost all financing of property that is owner occupied at the time the loan papers are signed, such as a refinance or HELOC. It is not required if you are purchasing your primary residence and also using it for collateral on the loan (a typical purchase).

What is an ESCROW account?

An escrow account is a trust account established by a lender to hold money for real estate taxes, PMI payments, and hazard insurance premiums as they are received each month. The money is sent to the lender each month in addition to your regular principal and interest payment. When the bill is due, the escrow account disburses the money. If you borrower more than 80% of the home’s value you will be required to escrow with most lenders. Choosing not to escrow can also affect your interest rate.

Mortgage Options

One of the most difficult aspects of the finance process is sorting through the multitude of loan products currently available. It is confusing! We can help you easily eliminate the mortgages that you definitely don’t want and focus on the mortgage that will be best for your family. Things to consider are: How much down payment you have, if any? How long you plan to live in the home? How much home do you need? How you will pay for closing costs and other expenses? How many recreational activities outside the home do you enjoy? Considering all aspects of home ownership is key to being a happy and confident homeowner.

Fixed Rate Loans

The interest rate stays the same throughout the life of the loan, so the principal and interest payments never change. Several types of fixed rate mortgages exist and range from a simple refinance to a purchase with no down payment. Based on where the market has been over the last few years, a fixed rate loan has been the obvious choice for most homeowners.

ARM (Adjustable Rate Mortgage) Loans

The interest rate stays the same for a fixed period of time and then can change periodically, so the payments will also change. Depending on what is happening in the market, the rate on an ARM loan may be higher, somewhat lower, or much lower than the rate on a fixed rate loan, so it pays to examine both options carefully.

First Time Homebuyer Loans

The term First Time Homebuyer Loan is used throughout the industry to explain any loan that helps someone purchase their first home, or a new home if you haven’t owned a home in the last 3 years. At the Sullivan Bank we have access to several different financing options for the first time homebuyer and will gladly help find the right one for your family.

Construction to Permanent Loans

A construction loan is for those who wish to build their own home, and is typically a short term loan. After completing construction, long term financing (a permanent loan) will be needed; which is generally a fixed rate loan. Working with Sullivan Bank can assure a smooth transition from construction to permanent financing.

Government Backed Loans

A government backed loan is a loan that is backed by the federal government in case of default. It protects the lender, and in order to get the backing, the borrower typically pays a guarantee fee or insurance fee. USDA, FHA, and VA loans are considered government backed loans.