First-Time Homebuyer Common Questions

Thinking about buying your first home? Congratulations! Purchasing a home is an exciting process and a big personal and financial step. The questions below are the most common mortgage questions first-time homebuyers have for lending institutions. Don't see your question on this list? Contact us and a loan originator will be in touch shortly to discuss your unique financial situation.

First-Time Homebuyer FAQ

Can I apply for a loan before I find a property to purchase?
We recommend applying for a mortgage before you start shopping. By figuring out how much home you can afford, you’ll avoid falling in love with a home that’s not in your budget. We will qualify you based on your affordability level and credit history.
How much home can I afford?
Our mortgage loan calculator can help you determine your monthly mortgage payment including taxes, insurance and the principle. You can also schedule a meeting with a loan originators to review options that will determine how much home you can afford.
If I have a past bankruptcy or foreclosure will I be unable to obtain a new mortgage?
To receive approval for a new mortgage, we generally require that two to four years have passed since your bankruptcy or foreclosure so that you’ve had time to establish an acceptable credit history.
Will an inquiry about my credit affect my credit score?
Generally your credit score will not be affected by our inquiry. Most lenders see multiple inquiries for the same type of loan and know that you are comparing rates between lenders. However, if you have applied for several different types of loans or credit cards in a short amount of time, your credit score could be negatively impacted.
Are 15-Year Mortgages Better Than 30-Year Mortgages?
Each borrower’s personal household budget is different, and there are benefits and drawbacks to both 15 and 30-year mortgages: the best option for you depends on your long and short-term financial goals. 15-year mortgages have lower interest rates, cost less over the life of the loan and are great for long-term savings. However, the monthly payments on these mortgages are typically much higher than the 30-year option. Our expert Loan Originators can help you determine which mortgage is right for you.
How can a Loan Originator help me?
Our Loan Originators have more than 10 years of lending experience and are always willing to answer questions and help future homeowners finance their dream home. Each mortgage application we receive is given personalized attention so we understand your unique financial situation to find the right mortgage for you.
What is the difference between Assessed Value and Appraised Value?
An Assessment is the value placed on a property by the town or city's assessor's office for the purpose of determining the property’s tax value. An Appraisal, on the other hand, is ordered for the specific purpose of determining the current market value of a specific piece of real estate on a specific date. The appraiser relies on current market data including recent sales on properties that are similar in style, size and location to the property. Assessed value and appraised value will not typically be the same since the appraised value will be impacted by market activity.
What is Private Mortgage Insurance (PMI)?
If the down payment on your home is less than 20%, most lenders require you to obtain private mortgage insurance (PMI). The cost of PMI varies depending on your credit score, down payment and the term of the loan. The payment will be added into your monthly loan payment and in some cases may be tax deductible.
What is the difference between a mortgage interest rate and an APR?
Interest rate is the cost you will pay each year to borrow the money, expressed as a percentage, and can be fixed or variable. This rate is used to calculate your monthly payment. An annual percentage rate (APR) is a broader measure of the cost of borrowing money. The APR reflects not only the interest rate but also any prepaid fees associated with the loan. APR is usually higher than your interest rate and is also represented as a percentage rate.
What is escrow and how does it work?
Escrow is when North Country Savings Bank pays bills associated with your property on your behalf. These may include PMI, real estate taxes, homeowners insurance, flood insurance, water and sewer tax, and life and disability insurance. A premium is added to your monthly principal and interest payment to cover these charges.
What is the difference between a fixed-rate loan and an adjustable-rate loan?
With a fixed-rate loan, the interest rate is determined when you take out the loan and will not change over time. An adjustable rate can fluctuate during the term of the loan depending on the changes in the market. This type of interest rate has maximums that the rate can change at each adjustment and over the term of the loan.
What is the difference between pre-approved and pre-qualified?
Pre-qualification is the first step in the mortgage process, when the lender determines if you are eligible to qualify for a mortgage loan, and determines how much money you are able to borrow based on basic financial information including your income, debt and assets. There are no rate or loan amount guarantees with pre-qualification. The pre-approval process is when the lender performs a credit review. This gives the lender a closer look at your financial history, and provides you with more accurate interest rates and loan amounts. Once you are pre-approved, you know how much money you can borrow and how much “home” you can afford.
What are closing costs?
Closing costs are the fees associated with the end of the transaction and should be considered by anyone looking to buy a new home. The amount you pay at closing can vary depending on your lender. Some examples of closing costs include attorney fees, deduction points, appraisal fees and loan origination fees.
What credit score do I need to qualify for a mortgage?
Although your credit score is an important factor in qualifying for a mortgage, it is not the only factor considered. Even if you have less than stellar credit or no credit at all, North Country Savings Bank also analyzes your work history and “alternative credit,” including utility payments and rental history.
In addition to the mortgage payment, what other costs do I need to consider when applying for a mortgage?
In addition to the mortgage payment, you will have monthly expenses of taxes and insurances for the property.
What do I need to apply for a mortgage?
Applying for a mortgage can be a daunting process, as most lenders explore every aspect of your financial and credit history. Having the proper documents ready can avoid slowing down the approval process so you can start shopping for your new home. Whether you choose to meet with a lender in person or apply online, having the following information on hand will speed up the process: •Proof of income (W2s, recent paystubs or federal income tax returns, if you are self-employed) •Balances and monthly payments of all your current debts including credit cards, personal loans, auto loans and student loans •A list of all your assets including any real estate, automobiles, retirement accounts and deposit accounts •The address and estimated value of the home you plan to purchase (if applicable)
What is Title Insurance?
Title insurance provides homeowners protection from possible title issues related to their property. Over time, a home can go through several ownership changes, leaving costly issues that are missed when the title is examined for defects. Title insurance covers the insured party for any claims and legal fees that could arise after the closing.
What is the difference between a home inspection and an appraisal?
Both a home inspection and an appraisal protect you against potential issues with your new home. A home inspection will inspect for structural defects, while an appraisal will determine the market value of the property. A home inspection is not usually required, although it is usually recommended.

First-Time Homebuyer Grant

The First-Time Homebuyer Class is hosted by the North Country Housing Council and provides new homebuyers with facts and advice about purchasing a home. It is also a requirement for anyone applying for the First Time Homebuyers Home Ownership Grant, which is available to income-eligible individuals residing in St. Lawrence County.

How do I qualify for the First Time Home-buyers Home Ownership Grant?
Qualification for the grant is based upon your income level and the number of people currently residing in your home.
What does the First-Time Homebuyer's grant cover?
The grant money covers the required 20% down payment and some closing costs.
Does North Country Savings Bank offer an incentive to take the First-Time Homebuyer's class?
Yes, we offer a rate discount towards your mortgage loan if you complete the class.
How much does the First-Time Homebuyer's class cost?
The class costs $75 per person and cannot be paid in cash. Checks should be made out to SLCHC.
How long is the First-Time Homebuyer's class?
Each class is held once a month from 9 a.m. to 3 p.m. You only need to attend one class.
Is there a time limit after the completion of the First-Time Homebuyer's class to apply for the grant?
Your income approval is eligible for 6 months with the North Country Housing Council. The certificate of completion for the class is eligible for two years.
Are there any types of homes I cannot purchase through this program?
You cannot purchase a home with more than two acres or an in-ground pool, a waterfront home or a manufactured home (single- or double-wide).
Are there any limits on the purchase price of the home?
The purchase price of the home cannot exceed $80,000.
Am I required to pay the grant money back?
If you live in the home for 10 years you are not required to pay the grant funds back. If you sell the home earlier you would be required to pay back a portion of the grant funds dependent on the number of years you lived in the home.