First Time Home Buyers

• Homebuying: An Overview
• Choosing the Right Mortgage: A summary of mortgage programs
• Application Checklist: What to bring to your mortgage application meeting
• The Mortgage Process: What happens after you apply for a mortgage

You may find it helpful to familiarize yourself with the different types of mortgages Naugatuck Savings Bank has available and to have some idea of which will best fit your particular financial situation. It will be necessary to have all the information required for your application ready beforehand. Our Mortgage experts can answer any questions that will help you find the right mortgage.

With all the alternatives in today's housing market, the first thing to do is to identify the price range appropriate to your financial situation. We at Naugatuck Savings Bank can help with that.

Knowing your price range will enable you and your Realtor to begin exploring the market to find the right house for you.

Once you're satisfied that you've found the house you've been looking for, you may be asked to provide the seller with a “Binder” (or contract) and a deposit, usually held by the real estate broker. The purpose of a binder is to hold the house for a short period of time during which a Sales Contract is drawn.

Your qualifications for a mortgage loan will based on your ability to make your regular monthly payments (assuming you have met the following requirements and covered the costs of your closing). Considerations will also be given to your credit history, household income, as well as the formal appraisal of your new home's market value. Naugatuck Savings Bank will then confirm your mortgage application approval through a Commitment Letter.

The closing is the final stage of the homebuying process in which you pay for and receive title to your new home. Once all the checks and documents are signed and delivered, we will take great pride in congratulating you on your new home.

We urge you to review the details presented in the remainder of this guide. We'll be delighted to answer any questions you still might have, and we look forward to working with you. Please contact us if you have any questions or are ready to talk.

Naugatuck Savings Bank offers a variety of mortgage loan options; each designed to meet different financial needs and objectives. They fall into two broad categories: those which carry a fixed interest rate throughout their term, and those which interest rates vary.

At Naugatuck Savings Bank you can choose from a wide variety of rates and terms to find the mortgage that best suits your needs.

Fixed Rate Mortgages

Fixed rates offer the advantage of a fixed monthly interest rate for the life of the loan. (Monthly payments may change only if taxes or insurance change.) The 30-year fixed rate mortgage is the traditional and most recognized plan for real estate financing. It's the plan that families find most appealing because of its predictable monthly payment. Check out our Mortgage Rates.

Other versions of the fixed rate mortgage are the 15-year and 20-year fixed rate which also offer you the security of a fixed interest rate. These mortgages build equity faster and offer the advantage of early home ownership at generally lower rates than a 30-year fixed rate mortgage. However, the monthly payment of principal and interest may be higher due to the reduced loan term.

A wide range of fixed rate mortgages are available with several rate and term options. Our mortgage experts can assist you in choosing the one just right for you.

Adjustable Rate Mortgages

The adjustable rate mortgage (ARM) is a very popular loan because it offers a substantially lower initial interest rate than its fixed rate counterpart. Since the rate is lower, the monthly principal and interest payments are lower, which may help you qualify for a larger mortgage amount. You may choose to fix the initial rate for 1, 3, or 5 years. The rate adjusts annually after that.

The ARM may be the best option for the first time homebuyers, people who do not anticipate remaining in their home for the term of their mortgage or people who can realistically anticipate a growing income stream. These programs are also attractive to homebuyers that may be transferred often by their employers.

Of course as interest rates rise, the interest rate and monthly payment on your loan will increase. It is important to note, however, that such increases are limited generally both in terms of the annual amount, “Annual CAP” and the total for the life of the loan, “Lifetime CAP”.

On the other hand, you may also benefit from interest rate decreases, which will serve to lower your monthly payments.

We suggest you gather the following facts and items and have them ready for your mortgage application meeting.

Verification of Income

• Past months paystubs
• Proof of other income being used (rental income, interest income, etc)
• W-2s

Verification of Assets

• 3 months of consecutive bank statements showing evidence of sufficient funds to close the loan
• Gift letter (if appropriate)

Other Necessary Items

• Signed purchase/sales contract
• Social Security Number(s)
• Valid identification
• Information concerning new home: annual taxes, estimated homeowner insurance, etc.
• Name and address of employer(s) for past 2 years.
• Tax return will be required if you are relying on dividends, commission income or rental property income for qualifying
• Complete summary of other debt including creditor name, balances and monthly payments.

If applicable, a complete summary of your real estate holdings. Please include address, rental income and total monthly payment of mortgage, taxes and insurance. Also include copies of your lease or rental agreements.

For many of us, the period of time following the submission of a mortgage application is a very anxious one. We understand that and will keep you informed through the process.

It will also help put your mind at ease to know just what goes into this phase – the details that require attention and take what often seems like such a long time.

After we receive the completed application package and application fee, we will:

• Have the property appraised
• Verify your employment
• Verify your deposits
• Order your credit report

Upon receipt of these items, your loan will be reviewed by one of our underwriters. If everything is in order, we can then prepare the loan for commitment. Once you accept the commitment and all the conditions have been met, a closing can be scheduled. Prior to the closing, a title search and a survey of the property, if applicable, will be conducted.

As you can see there are many different people involved in the mortgage process.

• You and your Realtor
• Seller and seller's Realtor
• Appraiser
• Credit Bureau
• Your employer (for verification)
• Your creditors (for verification)
• Attorneys
• Town offices
• Surveyor
• Structural engineer
• Insurance agent