Purchasing a home is one of those steps in life that helps fulfill what we like to refer to as the American dream.
Few things in life give us the feeling of roots, belonging and success like a piece of the world we can call our own. Wrapped up in the hopes and dreams that are inherent in a home purchase, though, is a lot of paperwork.
It comes with the territory, says Alison C. Ball, home loan specialist with Carolina Farm Credit in the Yadkinville, Wilkesboro and Sparta offices. Ball guides clientele through the process, working to make it as easy and stress-free as possible.
Carolina Farm Credit offers three primary types of loans when it comes to homes: purchasing, refinancing or constructing a home. Each may require different documents. We also offer government loans including FHA, USDA, and VA loans.
Prequalifying, the First Step
“The first step is to get a person prequalified for a loan,” Ball explains.
For the prequalification step, the lender will want to see a pay stub and will also pull information on the customer’s credit to verify what the credit score is and the debt they are carrying. “That helps us get a true snapshot of a person’s income, debt and credit to determine the prequalification amount of what they can afford.”
When a person is prequalified, they have a good idea of the price range to stay within when looking for ready-built homes. For those who are planning to build a new home, they can start interviewing builders. “If you can only afford a $250,000 home but you’re talking to builders who are quoting a half million dollar home, you’re not going to be happy. That’s why the prequalification step is so important,” says Ball.
She explains that construction loans are one of Carolina Farm Credit’s niche products. “For a primary residence we will lend up to 95% of the value on a one-time closing construction loan."
After prequalification and as soon as customers determine the licensed builder they wish to work with, Ball encourages them to get a turnkey, fixed cost contract and to finalize their house plans. “With these items in place they can go ahead and apply for the loan.”
This is the point where a whole gamut of information may be required so it’s helpful to begin gathering documents in advance to be prepared when meeting with your lender for the actual loan application phase. For the entire process, allow 30-45 days from the date of the loan application.
In part 2 of “Navigating the Home Loan Process” we’ll outline some of the types of items you may need.
To read more about Carolina Farm Credit, our members and the ag industry, check out issues of our Leader magazine—you can read them online.
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