Discover the fast, affordable and hassle-free Summit difference
- Lock your rate when you choose – at the time you apply or up to seven days before closing
- Get online mortgage loan status updates throughout the process
- Great rates, local servicing and so much more!
Your mortgage loan officer will connect with you in one business day!
Q: I just got preapproved! How long is my preapproval good for?
A: Congratulations! Your preapproval is valid for 90 days, as long as your financial situation stays the same. If your employment changes or you take out any new debts, get in touch with your Mortgage Loan Officer to make sure the preapproval is still valid. And here’s a helpful tip: avoid any major purchases on your credit card – changes in your credit score can put your preapproval at risk.
Q: Can I change the amount I’m preapproved for?
A: Maybe! Check in with your Mortgage Loan Officer to go through your options. You might be able to qualify for a higher amount based on your income. Or, if that isn’t the case, there might be other loan programs that allow you to increase the amount you’re preapproved for.
Q: I only have a one-year work history. How will that affect the preapproval process?
A: It depends on your situation. If you were in school before you started working, we’ll consider school as part of your work history. If you took some time off, we may want to see what type of work you did before that. If your previous work was in a different country, we’ll want to document your income and employment there. As always, check in with your Mortgage Loan Officer. They’ll help you navigate your personal situation and find options that meet your needs.
Q: We had some troubles with our credit in the past. How long will it take before we can get preapproved to purchase a new home?
A: The waiting period will be somewhere between two and seven years. Where you fall depends on what happened in the past and what type of loan program you’re interested in. Please reach out to one of our Mortgage Loan Officers to discuss your specific situation and be sure you know the answers to these three questions:
- Whether you filed for bankruptcy (and if so, if it was Chapter 13 or Chapter 7).
- If you sold a house for less than you owed (a short sale).
- If you had a foreclosure.
Debt and Income
Q: How do you figure out how much of a monthly payment I can afford?
A: We’ll focus on two things: your monthly gross income (before taxes) and your monthly bills. For monthly bills, we include your new house payment, and what you owe each month on your installment loans – auto, credit cards, student loans, etc. We don’t factor in utilities, phone bills, grocery bills, etc.
We use your income and bills to come up with your debt-to-income ratio:
Total monthly bills / Gross monthly income = Debt-to-income ratio
Q: Do I need to have a certain debt-to-income ratio to get a loan?
A: When we’re qualifying you for a loan, we look for a debt-to-income ratio of no more than 43%. But look at your overall budget and make sure that amount matches up with your comfort level. Maybe you really like to travel, want to build up your savings or are starting to save for your kids’ college. A smaller loan payment might be a better fit. Let’s talk!
Q: I’m trying to pay down debt before I apply for a mortgage. How long should I wait before applying?
A: It usually takes 30-45 days for paid-down debt to show up on your credit report. You’ll have a better credit score, and less paperwork to fill out, if you wait until your hard work shows up.
Q: Does Summit have a calculator I can use to figure out my debt-to-income ratio?
Q: I have a part-time job and a full-time job. Will you look at the income from both jobs when I apply for a mortgage?
A: When we’re qualifying you for a loan, the big thing we’re looking for is stability. We typically want to see a two-year history of all the income you use to qualify – so if you had both your full-time and part-time gigs for at least two years, you might be able to use your part-time income to qualify.
Q: I’m self-employed. How does that affect my mortgage application?
A: Our big focus is always on stability. We’ll look at the last two years of your federal income tax returns to figure out if you qualify for a loan. Depending on the time of year, we might also ask for a Year-to-Date Profit and Loss statement.
Q: What is the ideal credit score for loan approval?
A: To get the best interest rates and loan pricing, you’ll need a credit score of 740 or more. Have a lower score? That doesn’t mean you won’t qualify. There are a lot of program options for people with lower credit scores and you can count on our team to help.
Q: What’s the minimum credit score I’ll need to qualify for the different loan programs?
A: We like to see a credit score of at least 620. Already know you’re not going to hit that level? Let us pair you up with one of our branch team members. They’ll walk through your credit report with you and help you come up with a plan to get your finances on track.
Q: I’m going to have more than one borrower on my loan. How do credit scores work then?
A: We pull what we call a tri-merge credit report on every borrower. First, we get the score for each borrower from each of the three credit bureaus – TransUnion, Equifax and Experian. Next, we select the middle score for each borrower, and then we use the lowest of these middle scores for the loan application. For example, if one borrower’s middle score is 680 and the other borrower’s is 720, we would use the 680.
Q: Can I check my credit report on my own? And will checking my credit report hurt my credit score?
A: Just go to Annualcreditreport.com. Federal law authorizes them to provide your credit report once a year, free of charge, and checking your report won’t affect your credit score. It’s a good idea to monitor your credit report annually, whether you’re looking for a loan or not. This lets you make sure nobody has hacked into your accounts or signed you up for an account you didn’t know about. And if there are mistakes, you can get them cleared up ASAP and be all set when you do want a loan.
get a mortgage with a down payment as low as 3%^
Summit is here to help you make homebuying process easy with low down payment options and $500 off closing costs!^^
Q: What does it take to qualify for a Rural Housing Loan?
A: There are three qualifications: household size, income and the geographic location of the home. Typically, you have to buy a home in an area with a population under 20,000 and have a low- to moderate-income level. Your Mortgage Loan Officer can provide information specific to your personal situation.
Q: How does a construction loan work?
A: In a lot of ways, a construction loan is like a credit card. To get started, you qualify for a loan for the amount needed to build the new home – sort of like the credit limit on your credit card.
Whenever your builder completes some agreed-upon part of the work on your home, they ask you for payment. A third party confirms the builder has completed the work they agreed to and Summit pays the builder out of your total loan amount. This partial payment is called a “draw” and most new home or major reconstruction projects have somewhere between three and five draws over the course of construction.
You don’t have to pay interest on the entire amount of your loan – just on the amount that’s been disbursed, just like a credit card. When construction wraps up, you’ll have a final loan amount and your payments will switch over to principal and interest payments – just like a regular mortgage.
Q: I’ve been hearing about WHEDA loans. What are they? And how do I find out if I qualify?
A: WHEDA stands for Wisconsin Housing and Economic Development Authority and this program helps make housing affordable for lower income Wisconsin residents. These loans have lower rates and you might not have to make a down payment. Plus, you might get to pay less in private mortgage insurance than you would with a conventional loan. You’ll qualify for WHEDA based on your household size and income and where you live. There aren’t any downsides to the program, but there are maximum income limits. Summit’s Mortgage Loan Officers will be happy to help you learn if this program is a fit for you.
Q: I’m a veteran – how do I learn more about loans from Veterans Affairs (the VA)?
A: Thank you for your service! Your Mortgage Loan Officer will be happy to help you find out if you qualify for a VA loan. The program offers financing to eligible veterans for up to 100% of the value of the home. And while you won’t have to pay any private mortgage insurance costs, it’s possible you’ll be assessed a funding fee. The VA loan program waives the funding fee if you have a 10% (or more) disability. And, if VA does assess the fee, it can typically roll into the loan amount so you don’t have to come up with that money at closing.
Q: Do you have any special loan programs at Summit Credit Union that other places might not have?
A: We do! One we’re really excited about is our Welcome Home program. This program has two exciting benefits: lower Private Mortgage Insurance costs and the ability to get a loan for up to 100% of the value of the home. You’ll need to meet additional underwriting criteria to qualify for the program, and your Mortgage Loan Officer will be happy to discuss this program with you and figure out if it’s a match.
Down Payment Assistance and Grants
Q: It’s going to be hard for me to pull together a down payment. I’ve heard of something called Down Payment Plus grants. Do you have those?
A: Yes. This program is offered through the Federal Home Loan Bank (FHLB) system, which is a group of regional banks that works together to make sure financial institutions have access to cash. Summit participates in the FHLB grant program and it’s just one of the many down payment assistance options that we’re proud to offer. Your Mortgage Loan Officer will be happy to tell you more about possible programs and help you find one that works for you.
Q: I’m a first-time homebuyer on a limited income. Are there grants and programs for me?
A: The answer is likely “yes.” There are quite a few different grant programs available. They all have different criteria to qualify so it’s hard to answer this question without knowing more about you. But why not set up an appointment with a Summit Loan Officer and find out? Our team knows their stuff and they’d love to help you find an option that works for you.
Q: How do Down Payment Assistance programs work and what can the money be used for?
A: Each program is a little different. Some require you to pay the money back over time, some require the money to be paid back when the home is sold and some don’t require you to pay the money back at all. In many cases, there’s some flexibility in how you use the funds – you might be able to use them toward your down payment and your closing costs too. It just depends on the program. As always, Summit’s Mortgage Loan Officers would love to help you find an option that meets your needs.