Inside Business: Home Loans - KFYRTV.COM - Bismarck, ND - News, Weather, Sports

Inside Business: Home Loans

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Spring is finally in the air and the Bismarck-Mandan real estate market is warming up. BNC loan originator Cindy Drengson says first-time home buyers make up anywhere from 20 to 30 percent of the business.

"I would say a good 25 percent for sure is first time home buyers. A lot of other people are moving up or moving to town," says Drengson.

First-time buyers are almost always concerned about how much they have to come up with for a down payment. Drengson says there are four basic loan types, and each has its own down payment requirement.

"We handle all four different types of loans. VA, FHA, Conventional and Rural Development. A lot of people assume that 20 percent is required. That is not the case. Rural Development will let you in with zero down payment, as will VA if you have a certificate of eligibility. FHA is only three and a half percent, and conventional five is the minimum," says Drengson.

The next big question is usually closing costs: How much should a new buyer budget for things like appraisals, origination fees and title work?

"Closing costs should be very similar from bank to bank. I would plan for $3,000 to $4,000 in closing costs. That does not include your first year of home owner's insurance, and escrow accounts if you choose to have one," says Drengson.

For first time home buyers, the paperwork process can seem quite intimidating, but Drengson says that it isn't that difficult.

"It's not nearly as complicated as people make it out to be. It's a fifteen minute application, collection of some paperwork, tax returns, pay stubs, bank statements and we handle most of the work from there," says Drengson

And Drengson says it's important for all buyers, especially first-time buyers, to get pre-qualified with a lender before they start shopping for that new home.

"My word of advice to first time home buyers is meet with your lender before you meet with your realtor, so that you know, and have realistic expectations of what you can afford. We will go through your income, your assets, and were you need to be on your monthly payments which will help you get to the price range of house you need to start looking at," says Drengson

And with area home prices averaging around $240,000, you might need a little help with that down payment or the closing costs. Drengson says down payment gifts are becoming more common.

"Gifting, up-down payment and closing costs can happen, for all types of loans, and that's a nice resource. The paperwork has to be documented on all four of the loan types mentioned earlier," says Drengson

Builders have been busy all winter, and there are lots of new homes coming on the market.

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