Buying a Home

The Loan Process

Whether you are a first time buyer or a seasoned home purchaser, the loan process can seem overwhelming. But we'll make it quick and manageable. It only takes about 30 days from initial application to closing. Use this site to help guide you through the process, or come in for a visit. We're available to walk you through every step of the way.

Start with Some Calculations. Use our calculators to obtain valuable mortgage financing information.

Learn About the Types of Mortgages:

These loans have no government insurance, private mortgage insurance or guarantees for the lender, and a loan limit of $424,100. Fixed Rate Mortgages are best if you have the ability to make a cash downpayment of at least 20% and prefer a fixed payment over the life of a loan.

As a general guideline, you may qualify if your monthly mortgage, taxes and insurance payment are 28% or less of gross monthly income, and total monthly debt payments, including house payments, are 43% or less of gross income. If you do not satisfy those qualifications, a larger downpayment or other strong credit factors can help you qualify.

Rates typically start lower than fixed rate loans and are great for those who need lower monthly payments for the first few years, need more borrowing power, and/or want to qualify for the highest loan amount possible. You can choose an ARM that adjusts interest rate every 1, 3 or 5 years; or a 3/1 or 5/1 ARM where the interest rate is fixed 3 or 5 years after which time it adjusts every year. ARM loans are also attractive for those who only plan to stay in their home for a short period of time.

Properties on land leased from Minnesota Power can be financed using our portfolio or "in-house" products. You can borrow up to 80% of the lesser of the sale price or value of the house. You can choose from a 1/1, 3/1, 3/3, 5/1, or 5/5 ARM with various term options.

Conventional loans for loan amounts more than $424,100, Jumbo Loans generally have higher interest rates than conventional loans.

Identical to conventional loans, except for a downpayment requirement as low as 3%. These loans require a mortgage insurance premium, payable monthly until the principal balance drops to 78% of the original purchase price or appraised value, whichever is less.

These loans are insured by the Federal Housing Administration (FHA) and require a mortgage insurance premium at closing. They are best for those who have limited funds for downpayment and closing costs (downpayment and closing cost requirement is as low as 3.5% of the purchase price) and who are first time homebuyers or may not qualify for other loan types.

You may qualify if your monthly mortgage, insurance and taxes payment is 31% or less of gross monthly income and your total monthly debt payments, including the house payment, is 43% or less of gross income. The maximum loan amount varies among counties, with most at a maximum of $275,665.

Mortgage Insurance: FHA requires a mortgage insurance payment at closing of 1.75% of the loan. This can be added to your loan. You also must pay a monthly premium of 0.85% of the balance of the loan for the life of the loan.

The Veteran's Administration (VA) guarantees these loans for the lender and there is no downpayment required. VA Loans are designed for those who are active military or military veterans with limited funds for downpayment and closing costs, and who may not qualify for other loan types. Terms: available with a fixed interest rate. Fees: VA requires a "guaranty" fee of 2.15% for first time use and 3.3% for second or subsequent use (lower if a downpayment is made) payable at closing. This can be added to your loan. Maximum loan amount: $424,100, including the guaranty fee if it is added to the loan.

Minnesota Housing offers Start Up loans for first time homebuyers (those who have not owned a home in the last 3 years), Step up loans for repeat buyers and current homeowners, Mortgage Credit Certificate (MCC) for first time homebuyers and down payment and closing cost assistance loans. Borrowers must meet income eligibility guidelines. Maximum purchase price for most Minnesota counties is $255,500.

Purchase and refinance options are available. Minnesota Housing works with industry standard products including FHA, VA, Conventional (with down payments as low as 3%) and Rural Development and offers low, fixed interest rates for the life of the loan.

Optional down payment and closing cost assistance loans are available. The Monthly Payment Loan has a 10 year loan term with monthly payments and an interest rate equal to the first mortgage rate. Loans go up to $10,000 and must be used with Start Up, Step Up or MCC with First Mortgage. Deferred Payments Loans have loan terms equal to the first mortgage term with 0% interest and must be repaid when the property is sold, refinanced or is no longer the primary residence. Loan amounts may go as high as $8,500 and must be used with Start Up.

Learn more about MHFA Loans at:

Get Buying Power With a Prequalify Letter
Increase your buying power with a prequalify letter from North Shore Mortgage. Get pre-qualified online or come in to one of our branches to meet with a loan expert. We can let you know if you are approved for a specific loan amount within hours. Most sellers require this assurance before they'll accept your offer. We'll e-mail, fax or mail a prequalify letter to you so you can start shopping for your new home right away!

Find It & Buy It!
Find the perfect house that fits your wants, needs and budget!

Protect Yourself
When you have found a house, many buyers make their offer contingent on a home inspection.

Final Approval
Lock in on a rate with us and supply needed paperwork. At this point we'll need a copy of the purchase agreement. See our application checklist for other documents we may ask for when you apply. Meanwhile, we'll order the appraisal and get the title to the property updated and reviewed. Once this paperwork is complete we send it all over to your Title Company and you're ready for closing. Final approval takes about 2 weeks.

After all the closing documents are signed, you are a homeowner!

Conventional Fixed, 15 Years
Rate 3.500% | APR 3.737%
Conventional Fixed, 20 Years
Rate 3.750% | APR 3.936%
Conventional Fixed, 30 Years
Rate 4.000% | APR 4.135%
FHA, 30 Years
Rate 3.500% | APR 4.654%
VA, 30 Years
Rate 3.625% | APR 3.750%
January 17

Duluth, MN