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 $417,000. 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 36% 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 $417,000, 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 29% or less of gross monthly income and your total monthly debt payments, including the house payment, is 41% or less of gross income. The maximum loan amount varies among counties, with most at a maximum of $271,050.

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 1.35% 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: $417,000, including the guaranty fee if it is added to the loan.

Offered through the Minnesota Housing Finance Agency (MHFA), these loans offer below market interest rates if you meet program guidelines. They are designed for those who are a first-time homebuyer or haven't owned a home in the last 3 years and have limited income and funds for downpayments and closing costs. Income eligibility is based on the gross income of those who will live in the house. Maximum purchase price: $237,031 for most Minnesota counties.

You may also get an interest free second mortgage to help with the down payment and closing costs. For downpayment and closing costs, up to $5,000 is available in "entry cost assistance". If you receive HAF assistance, you can expect to repay this loan when you sell the property. No monthly payments are required.

Learn more about MHFA Loans at the Minnesota Housing Finance Agency (MHFA), website.

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 3.250% | APR 3.486%
Conventional Fixed, 20 Years
Rate 3.750% | APR 3.936%
Conventional Fixed, 30 Years
Rate 4.000% | APR 4.135%
FHA, 30 Years
Rate 3.375% | APR 4.528%
VA, 30 Years
Rate 3.500% | APR 3.624%
December 07

Duluth, MN