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ICBA Offers Tips for Homebuyers

Work with Your Community Banker to Find the Mortgage That's Right for You

Washington, D.C. (May 30, 2007)—June is National Homeownership Month and the nearly 5,000 members of the Independent Community Bankers of America (ICBA) help millions of Americans in communities throughout the country to become and stay homeowners each year through the personal attention that only a local community bank can offer.

"Talking first to a community banker is a great idea," said James P. Ghiglieri, Jr. ICBA chairman and president of Alpha Community Bank, Toluca, Ill. "Community bankers want to establish long-term relationships with their customers and take the extra steps necessary to give potential homebuyers the service and attention they need. We are not only interested in helping a homebuyer purchase a home, but in helping them find a mortgage they can live with so they stay in the home as long as they want to."

In addition to working with a community banker, ICBA offers the following suggestions:

  1. Know your budget: how much you spend on rent, utilities, entertainment, clothing, food and transportation.
  2. Organize paperwork: pay stubs, W-2 forms, tax returns, and bank and investment statements.
  3. Check your credit report and bring it to your community banker. Credit reporting agencies must give you one free report annually.
  4. Work with your community banker to find out how much you can borrow and which mortgage is right for you.
  5. Get pre-approved. It helps you shop for a home that fits your budget and shows sellers you are a serious buyer who can close on a home quickly.
  6. Learn as much as you can about the home buying process. Your community banker can help explain it to you. Look for classes on home buying and home maintenance. There are free online educational tools at www.hud.gov, www.federalreserve.gov/consumers.htm.
  7. If you are a first time homebuyer, ask if there are special first time homebuyer loan programs available, or grant programs to assist with down payment and closing costs.
  8. Consumers have a wide variety of mortgages to choose from. Ask your loan officer to carefully explain payment options, rate adjustments and other loan features so that you aren't surprised by payment increases down the road. Don't be taken in by promises of low payments and 100 percent financing.
  9. Always ask for a written good faith estimate to compare the real costs of your mortgage. It will tell you what your interest rate, monthly payment and closing costs will be.
  10. Visit homes to learn what you are getting for your money and what fits your budget.