FIBT | Mortgage Welcome Packet

WELCOME HOME

Congratulations

on

taking

the first step in financing your home with First International Bank & Trust

Our mortgage experts are committed to providing you with the highest level of customer service possible. Check out our team online at FIBTmortgage.com. We look forward to serving you.

Whether you’re buying, building or refinancing, we offer a variety of loan solutions to fit every financial situation:

• Conventional

• FHA/VA

• Jumbo

• Construction

The importance of getting pre-qualified

• Lot Loans

• Portfolio Loans

• and more

Pre-qualification is the process of determining how much money you will be eligible to borrow before you apply for a loan. It is important to know how much you qualify for before you start looking for a home. This allows you to know your approximate monthly mortgage payment. You want to make sure that you’re not looking for homes with values that are outside of your ideal payment range.

The benefits of local servicing

Typically, when you obtain a mortgage, your loan will get sold to a third party investor. When you get a mortgage with First International Bank & Trust, your loan stays with us*. This means if you have any changes to make or questions to ask, you can reach out to us and we’ll be there to help. You’ll continue to receive the exceptional service you’ve come to expect from First International Bank & Trust. You’re able to pay your mortgage through online banking, by phone, or simply stop by your local branch.

*Some exclusions may apply.

You can feel confident knowing that you’re working with a team of experts who provide the heritage of a trusted bank, local decision making and personal service

WHAT IT MEANS TO LIVE FIRST

Whether big or small, dreams are what make life worth living. First International Bank & Trust knows it’s not just money in your account, there are hopes, goals and dreams. Our wish for you is to have more dreams and less worrying about money so that you can have more moments of being in the moment – to live first. Because when your finances are in order, you can focus on what matters most.

More than a century of helping dreams come true

Since our humble beginnings in 1910 as Farmers State Bank in Arnegard, ND, we’ve been helping dreams come true, one customer at a time. Through good economic times and bad, the Bank continues to serve as a strong financial partner for families and businesses to grow and protect their wealth. Today, four generations strong, the Stenehjem family continues to lead First International Bank & Trust with a focus on long-term customer relationships.

As a community bank, our employees live in the same community as you. We’re active in local organizations that help make our communities better places to live, work and play. Our Company invests locally in helping small businesses grow and large businesses plan for expansions. We establish plans for a comfortable retirement and protect legacies for future generations. At every stage of life, First International Bank & Trust is here with dedicated employees who put you first to help realize your dreams.

Purchase and Refinance Overview

The majority of mortgage loans are for the purchase of a home

Whether you’re a first-time homebuyer or a seasoned investor, purchasing a home is an exciting adventure. We’ve included a homebuyer checklist to keep your notes organized as you go through various houses trying to find your dream home. You’ll also find a moving checklist to help you stay on track as you prepare to move into your new home.

Refinancing is a great way to make sure that your home mortgage is still the right fit for your financial situation

Whether you’re hoping to lower your rate, restructure your payment, or change the length of your loan, our mortgage experts are here to help. For your convenience we’ve provided some good do’s and don’ts that can be applied to every mortgage loan, regardless of it’s purpose.

TYPES OF LOANS

Conventional Fixed-Rate

The conventional fixed-rate mortgage is the most common type of mortgage loan. One of the biggest benefits of this mortgage type is that the interest rate will stay the same throughout the life of the loan. This means that it will not increase if market rates rise. Having a stable interest rate means the monthly mortgage payment (principal & interest) will be predictable. This peace of mind is why most mortgage loans today are conventional fixed-rate loans.

Did you know? You don’t have to put 20% down to get a conventional mortgage.

Federal Housing Administration (FHA)

The Federal Housing Administration does not lend money but it does insure loans made by private lenders. This loan type typically has some of the lowest down payment requirements; however, borrowers will pay for mortgage insurance throughout the life of their FHA loan.

Did you know? FHA loans aren’t just for first-time homebuyers.

Veteran’s Affairs (VA)

This loan type is available for most active-duty service men and woman as well as military veterans. Many of those serving in the reserve or National Guard may also be eligible. It is important to note that eligibility is determined by the VA, not the lender. Like the Federal Housing Administration, the VA does not lend money. What they do is guarantee loans made by private lenders. This guarantee allows lenders to typically give a lower rate in addition to offering 100% financing for the home.

Jumbo Loan

Most loan types have a limit on the maximum amount that can be borrowed; for those who have mortgage needs that exceed those limits, the jumbo loan is another option. Loan limits will vary by county. The process for obtaining a jumbo mortgage is similar to getting a conventional loan but it may have stricter credit and down payment requirements. Also, the interest rate may be higher on a jumbo loan.

U.S. Department of Agriculture (USDA) Loan

The U.S. Department of Agriculture offers various mortgage programs and mortgage assistance programs. This loan type is ideal for those who live in eligible rural and suburban neighborhoods. USDA loans can be used as direct loans or for home improvement. Another option is to get a USDA guaranteed loan, like FHA and VA Loans, these aren’t issued directly by the government, but they are guaranteed by the government. The upside to these loans is that you may get low interest rates, even without a down payment. One downside is that only those in eligible neighborhoods may apply.

Ask your lender about options for first time homebuyers as well as down payment assistance programs.

What to expect when going through the mortgage process

1 2 3

APPLICATION

Complete the mortgage loan application either online over the phone, or at your local branch. Some questions will include income, debts, and personal information. Within three business days of application, you will receive an invitation to consent to e-sign all your loan documents - this is optional. You will also receive your initial disclosures and your Loan Estimate. Please note that if you choose to prequalify while you’re searching for a home, you will not receive your loan disclosures until you have decided on a home and provided the address to your lender. The Loan Estimate shows your anticipated fees, interest, and cash required for closing. Your loan officer can answer any questions you may have.

PROCESSING

Once you receive your Loan Estimate, your loan officer will send you a list of the documentation that they will need to process your loan. Keep in mind that your lender may ask you for additional documentation throughout the loan process. These documents are requested in order to verify the information on the loan application. This may include a verification of employment, verification of deposit, tax documents, and more. If you have any questions about why something is required, feel free to ask your loan officer.

APPRAISAL

An appraisal is the valuation of the home you wish to purchase. The main method that the appraiser will use to come up with the final value is the Comparison Approach. The Comparison Approach uses the recent selling price of similar homes. Similarities include: size, quality, and location. The appraiser will reach out directly to either the seller of the home or you, if you’re refinancing. For regulatory purposes, the appraisal is done by a third party company.

FINAL APPROVAL

The loan officer or processor will take all of the documents provided while the loan was in processing. The bank is required to prove your ability to repay the loan. Unlike most financial institutions, this decision is generally made internally. Final approval is one of the most important parts of the mortgage process. You may rest assured knowing your loan is in the hands of our mortgage experts.

PRE-CLOSE

At least three business days prior to your loan closing, you will receive what's called your "Closing Disclosure" or CD. You'll need to review this document carefully. If everything is in order, all borrowers will need to sign and send this to your loan officer. This can be done either in person or via e-signature. At least three business days will need to pass in between signing this document and your closing. Remember to review your Closing Disclosure carefully and make sure you understand whether or not you are expected to bring cash to the closing.

CLOSING

During the time between signing your CD and your closing, your loan officer is preparing your documents for closing. They will then be sent to the title company. If the CD stated that you are to bring cash to close, you'll want to authorize a wire transfer to be sent to the title company. If you want to avoid a wire transfer, ask your loan officer if a cashier’s check is an option. Depending on which state you live in, either the title company or your loan officer will set up a time to sign and close.

DO’S AND DON’TS

Whether you are in the process of buying a new home or you are considering refinancing your current mortgage, it is important to know what you can do to help make the entire process go smoother. There are a lot of moving pieces and it’s essential that they are all moving in the right direction. Remember, your loan officer is there to help you throughout the entire process so if you ever have any questions or concerns, please don’t hesitate to reach out to them.

DO’S

Avoid new credit inquiries: Aside from shopping around for a mortgage, avoid new inquiries as this may affect your credit score

Pay all your bills on time: late payments can adversely affect your credit

Keep the balances steady: lower credit balances, if possible to improve your debt-toincome ratio but don’t pay off bills unless directed by your loan officer

Work consistent hours: keeping paychecks at a consistent amount throughout the loan process is important to prove stable income

Keep your lender in the loop: your lender is there to help

DON’TS

Change jobs: it’s important to have stability in your work history from the beginning to the end of the loan process. You want to show a consistent income.

Add new debt: adding new debt may affect your debt-to-income ratio

Close any open credit accounts: your credit accounts help prove your credit worthiness

Move money around: don’t make any large and/or unexplainable transfers of your funds especially funds needed to close. Consistency is key, avoid cash transactions that are hard to track.

Make major purchases: keep your assets steady

HOMEBUYER CHECKLIST

Listing Price

Real Estate Taxes

# of Bedrooms

# of Bathrooms

Garage Size

# of Stories

Closet Space

Storage Space

Neighborhood Quality Views

Near Work

Near Supermarket

Near Freeway

Near Park Kitchen

Dining Room

Living Room

Formal Area

Office/Den

Finished Basement

Fireplace

Flooring

Landscaping

Patio/Deck

Notes

4 WEEKS PRIOR

O Collect estimates from moving companies and budget for moving expenses

O Ask all medical professionals for referrals in your new city/town

O Arrange to have school records and veterinarian records transferred

O Gather copies of legal and financial records

O Plan how you will move valuables and difficult to replace items

3-5 WEEKS PRIOR

O Start using items that can't be moved such as frozen foods, bleach, and aerosols

O Pinpoint your move date and begin packing items you don't use often

O File a change of address with the Postal Service, or ask them to hold your mail at the post office in your new city

O Notify your utility services of your move (both at your old and new locations) – electric, gas, cable, water/ sewer/trash, phone companies, etc.

O Make travel arrangements for your pets and plants

Moving Checklist. Stay organized while preparing for the big day.

1-2 WEEKS PRIOR

O Notify professional services of your move: medical professionals, attorneys, accountants, schools, insurance agents, financial planners, etc.

O Notify frequently used companies of your move: auto finance, bank, credit card, gym/health club, gardeners, monthly subscription companies, pharmacy, government offices

O Plan meals for the last weeks to use up your food

O Pack an essentials box to keep with you during the move –including prescriptions, be sure to get these filled

O Drain gas and oil from lawn equipment, gas grills, heaters, etc; drain water hoses; empty and defrost refrigerator

DAY MOVING

• Leave your contact information— including the names, addresses, and phone numbers of the hotels where you are staying—with a family member, so they can reach you while you’re away

• Check every room and closet one last time to make sure nothing is left behind and leave a note with your new address so that future residents can forward stray mail

• Place carpet, floor and door frame protectors throughout your home

• Personally supervise hired labor and direct them as to which rooms the boxes and furniture should go

NEW BUILD SEARCH CHECKLIST

Builder

Floor Plan

Base Price

Incentives

Build Time

Square Footage

# of Bedrooms

# of Bathrooms

Garage Size

# of Stories

Neighborhood Quality

Views

Near Work

Near Supermarket

Near Freeway

Near Park

Dining Room

Living Room

Formal Area

Office/Den

Finished Basement

Fireplace

Landscaping

Mud Room

Notes

NOTES

NOTES