At Ulster Savings, we've built a strong reputation as an outstanding mortgage provider, serving the residential lending needs of individual homebuyers, builders and real estate professionals throughout the Hudson Valley and on Long Island. Our experienced staff offer their expertise - from purchase to refinance to construction lending - to all of our residential mortgage customers.
In addition to the personal interaction we can provide through our team of Mortgage Specialists, we understand and appreciate the fact that some may prefer to educate themselves online. Below are some important mortgage facts and tips that you might find helpful.
Common Types of Mortgage Loans
- Fixed-Rate (Conventional) Mortgages: The traditional fixed-rate mortgage has both an interest rate and monthly payment that remains constant (locked in) for the life of your mortgage loan. Typical loans of this sort come in 15-, 20- and 30-year terms, however, other terms may be available to suit your specific lending needs. Fixed-rate mortgage payments consist of principal and interest payments which have been amortized over the life/term of your mortgage loan. The longer loan term will result in a lower monthly mortgage payment, however, the disadvantage is that it will take longer for you to repay the loan. In contrast, shorter fixed-rate loan terms will allow you to pay off your mortgage loan sooner, however, you will have a larger payment commitment each month during your loan term.
- Adjustable-Rate Mortgages (ARMs): An ARM is a loan type that features an interest rate that will change/adjust at a scheduled interval. The most common type of ARM, called a "Hybrid ARM", begins with a fixed interest rate for a period of time and then switch to a variable interest rate loan that changes/adjusts on a yearly basis. (Example: A 5/1 ARM loan will have a fixed interest rate for the first five (5) years, followed by a variable interest rate that changes/adjusts on an annual basis.)
- FHA Mortgage: The Federal Housing Administration (FHA) mortgage program is one well-known example of a government-insured loan program. FHA loans are available to all borrowers, including first-time home buyers. Lenders are insured by the federal government against losses incurred if/when the borrower defaults on the mortgage loan.
- VA Mortgage: This loan type is made available by the U.S. Department of Veteran Affairs (VA) to members of the military and their families. It is similar to the FHA program in that it is also guaranteed by the federal government. This loan type is unique in that the lender can receive up to 100% financing for the purchase of a home. No down payment is required.
- Construction Loan: Construction loans are usually short-term (1 year maximum) and lenders will typically have specific guidelines related to how loan funds will be disbursed during the construction process. This disbursement schedule is commonly referred to as a "draw" and typically follows the phases of the construction project. During construction, borrowers are usually expected to make only interest payments on the borrowed funds. Upon completion of construction, the lender and borrower may make arrangements to convert the construction loan into a fixed-rate mortgage loan, which is referred to as a "construction-to-permanent" financing arrangement.
During the mortgage process, your lender (hopefully US!) will typically require the following information from you and any co-borrowers:
- Social Security Number (SSN)
- Income verification:
- Current paystubs and/or two years' worth of W-2 forms
- Self-employed persons: Tax returns (with all schedules) from the past 2 years
- Bank statements from the past 2 months
- Investment and retirement (i.e.: 401k, 403b, etc.) account statements from the past 2 months
- Information about, and value of, personal vehicles (make, model, resale value)
- Up-to-date account information about outstanding credit card or loan (auto, personal, student) obligations
- If you currently own real estate, you will also be required to submit account information regarding outstanding mortgages, home equity loans, home insurance policies, etc.
- If you currently rent, you will need to provide canceled checks for the prior 12 months
What to expect when buying a home:
When buying a home, especially when it's your first home, there are numerous things to consider. This will very likely be the single largest purchase of your life, so we want to be sure you're fully prepared to make the right decisions during the entire process. Our Mortgage Specialists will guide you along the way, making this an efficient, pleasant experience. Here's a summary of the roles that will be played during your home purchase process:
Your Mortgage Specialist will:
- Help you determine how much you can afford to borrow through our pre-qualification process
- Assist in finding you the right mortgage loan to fit your specific needs and goals (this includes finding the best available rates, disclosure of associated costs, etc.)
- Serve as your point of contact throughout the loan process, providing you with status updates along the way
- Relay status updates to your Real Estate Agent to keep him/her informed (this excludes any personal information, which is kept confidential between you and Ulster Savings Bank)
Your Real Estate Agent will:
- Review available homes and determine possible choices for you based on your price limits (based on your available downpayment and mortgage pre-qualification amount) and other personal homebuying preferences
- Negotiate the best possible deal for you!
You will need to:
- Make sure you are pre-qualified with your preferred lender as early as possible. When you have an understanding of your borrowing capabilities beforehand, you can spend more time concentrating on selecting your home!
- Be sure to keep your Real Estate Agent aware of any questions, concerns or changes quickly in regards to your home purchase
- Provide any necessary documentation to your Mortgage Specialist (or lender) in a timely fashion throughout the mortgage process. Staying on top of documentation will be very important and will help you focus on any last-minute details or needs that require your attention.
We look forward to working with you to achieve your goal of purchasing/building your new home or refinancing your existing mortgage loan! If you have any questions or concerns about the mortgage process, please call US at (866) 440-0391 or schedule a Free Consultation with one of our Mortgage Specialists at your convenience.