Alerus Mortgage Services extends a broad range of home loan options to meet various needs, which range from the purchase of a new home to refinancing an existing mortgage. Read more below to have an in-depth understanding of home loan products under their belt.
### **1. Types of Home Loans Offered**
#### **1.1. Fixed-Rate Mortgages**
– **Overview**: A fixed-rate mortgage is one where the interest rate borne by the loan remains constant throughout the entire loan duration, hence offering regular, fixed monthly payments.
– **Term Options**: Can be taken for 15, 20, or 30 years. The shorter the term, the higher the monthly payment, and less interest will be paid on the life of the loan.
– **Benefits**: Monthly payments remain predictable, stable.
#### **1.2 Adjustable Rate Mortgages**
– **Overview**: An initial interest rate that is lower compared to fixed-rate mortgages, which remain fixed for a specified period. After finishing this period, interest is periodically adjusted based on current market conditions.
• **Adjustment Periods**: These are typically 5/1, 7/1, or 10/1 ARMs. In a 7/1 ARM, for instance, the rate is fixed for the initial seven years and, thereafter, the rate will be reset each year using the fully indexed rate.
• **Advantages**: The initially lower rate may enable borrowers to afford a more expensive home because they will have smaller initial monthly mortgage payments.
#### **1.3. FHA Loans**
• **Definition**: Insured by the Federal Housing Administration, these are loans for first-time homebuyers and those with low credit ratings.
– **Down Payment**: As low as 3.5% of the home’s purchase price.
– **Benefits**: More lenient credit score requirements and lower down payment options.
#### **1.4. VA Loans**
– **Description**: Guaranteed by the U.S. Department of Veterans Affairs and available to veterans, active-duty service members, and some surviving spouses.
– **Down Payment**: No down payment required in many instances.
– **Benefits**: Lower interest rates, no PMI payments, and generally more lenient qualification standards.
#### **1.5. USDA Loans**
– **Overview**: Offered by the U.S. Department of Agriculture for homes situated in eligible rural areas.
– **Down Payment**: Generally, no down payment is required.
– **Benefits**: Lower interest rates and reduced mortgage insurance costs on applicable rural properties.
#### **1.6. Jumbo Loans**
– **Overview**: Loans amount more than the cap on conforming loans; these loans are applicable to high-value property.
– **Requirements**: Usually, stricter on credit, income, and down payment requirements.
Provides financing for more expensive homes beyond what regular loan limits can accommodate.
### 2. Key Features and Benefits
#### 2.1. Competitive Rates
– Feature: Alerus offers competitive interest rates on its different types of loans, potentially saving you money over the life of the loan.
#### 2.2. Flexible Terms
– Feature: Get the loan with different terms and payment levels that best suit your financial needs and objectives.
#### 2.3. Personalized Service
– ** Description ** : Alerus offers dedicated support from mortgage professionals in order to guide you at every step through the loan process, from pre-approval to closing.
#### **2.4. Online Tools**
– **Description**: Online tools including mortgage calculators and application forms estimating the payments, check rates, and start your application.
### **3. Mortgage Application Process**
#### **3.1. Pre-Approval**
– **Description**: Pre-qualification was more for your and your lender’s benefit, to give you an idea of how much you’d be able to borrow. Now this may show some strength as you begin making an offer on a home.
#### **3.2. Application**
– **Description**: A formal application for a mortgage will be completed with your and other personal financial information, including income, assets, debts, and credit history.
#### **3.3. Documentation**
– **Description**: Now provide backup documentation. That includes pay stubs, tax returns, bank statements, and ID.
#### **3.4. Underwriting**
– **Description**: The underwriter will carefully assess both your application and your financial support information to assess whether you merit a mortgage and how risky it is.
#### **3.5. Closing**
– **Description**: You will be signing the final loan papers, paying the closing costs, and locking your mortgage. After that, the loan is funded and finally you will complete purchasing your home.
### **4. Other Things to Consider**
#### **4.1. Down Payment**
– **Description**: The amount of down payment required will depend upon the loan type obtained. Conventional loans will generally carry a more substantial down payment compared to an FHA or VA loan.
#### **4.2. Mortgage Insurance** – **Description**: Some loan types require mortgage insurance, i.e. FHA loan, or with conventional loans, if the down payment is less than 20%. This can be paid as part of the monthly payment or separately.
#### **4.3. Closing Costs**
– **Description**: Include in the loan process charges appraisal, title insurance, and other pertinent fees. Factor these costs into the loan.
### **5. Contact and Support**
#### **5.1. Mortgage Professionals**
– **Description**: One can contact the Alerus mortgage professionals for personal consultation and to resolve any query relating to their loan products and processes.
#### **5.2. Online Resources**
Descriptions: Using Alerus FAQ’s, learning resources, and calculators will enable you to fully understand before making decisions for your mortgage products.
Learn about the various home loan options, loan features, benefits, and how to apply with Alerus Mortgage Services to make informed decisions that will be of great importance to your financial goals and homeownership plans.