This post is written by guest columnist Peg Ball, Vice President Lending at Dubuque Bank and Trust
I’ve had the pleasure over the past 30 years to work with many first time homebuyers and help them achieve the dream of home ownership. Throughout this process, many of these buyers have had many questions. It’s important to discuss your questions and concerns with your lender as well as your realtor so you can make the right decision. Being educated on the process will help you make one of the biggest decisions you’ll make in your life time…buying your first home!
The following are some of the questions that come up frequently:
- Why should I buy instead of rent?
A home is an investment and not just a monthly bill. When you rent that money is gone forever but when you own your home you continue to build equity monthly. Also, the interest accumulated yearly on the mortgage loan is normally a tax deduction on your federal returns.
You may be a good candidate for one of the Federal Housing Administration loans (FHA). The FHA loan allows for a lower credit score and lower down payment than a conventional loan. And, you’ll still enjoy the benefit of a fixed rate over the life of the loan. The advantage of a fixed rate mortgage is that you always know exactly how much your mortgage payment of principal and interest will be. There will not be any interest hikes or surprises throughout your mortgage term.
Dubuque Bank and Trust also partners with Iowa Finance Authority to provide assistance in down payments and closing costs. We also have been awarded grant money from Federal Home Loan Bank to help borrowers bring very minimal to the closing table. The City of Dubuque also teams up with Dubuque Bank and Trust offering City second mortgages.
- How do I know if I can get a loan?
It’s best to come in to see a mortgage professional for a “Pre-Approval” before starting your house hunting venture. Your realtor will recommend this also so he/she knows what price range to be looking at for you. Our Pre-Approvals are free and we’re able to give you an answer right away! At this time, they’ll also go over some of the loan programs and grants available to you.
- What happens after I find a house I want to buy?
After your offer is accepted by the seller, call your loan office to discuss further details on your loan situation and to lock in your loan application and rate. Then your bank starts the process of final approval. At this time, you and your realtor will schedule any inspections you may require. Once final approval and title work is complete, a closing is scheduled. After signing your loan documents at the bank, the house is yours!
Any other questions or concerns I can help answer, feel free to contact me at Dubuque Bank and Trust…563-584-2591.