The Homebuying Journey
No two paths to buying a home are precisely the same. Finding the right mortgage loan depends on an array of factors including your goals, budget and credit. Though the homebuying process can initially appear complicated, we have the tools, tips and experts
to help you navigate it.
We’ve simplified the process by breaking it down into simple steps.
Mortgage Pre-Approval
The first step to buying a home is figuring out how much you can afford.
First Merchants’ Mortgage Loan Calculator is the perfect place to start. Our mortgage loan estimator breaks down your budget by reviewing your target home purchase price range, down payment, property taxes, homeowner’s association fees and home insurance, among other costs.
Before you start shopping around for a new home, we also recommend going through the First Merchants mortgage pre-approval program. This program will quickly analyze your financial history, including your credit report and score, to determine whether
you’re a viable candidate for a loan. Getting pre-approved for a home loan signals to sellers that you’re a serious buyer and can put you a step ahead of other prospective buyers. Learn more about
getting pre-approved.
Finding a Home
Once you’re pre-approved and understand your budget, it’s time to start shopping for a home. Look for homes that fit your lifestyle and budget. Once you find your home, work with your real estate agent to negotiate the price and address any
potential issues before you apply for a mortgage.
Securing a Mortgage Loan
Factors to consider when evaluating loans include:
Term length: Generally, mortgage durations range from 15 to 30 years. The length of your term determines how much you pay each month, as well as how much you pay in interest over the life of the loan. The primary differences between the
two mortgage loans are that monthly payments for shorter term loans are significantly higher, because you’re paying off your debt in a shorter period of time. However, over the full life of the loan, borrowers will pay less with shorter term
loans because the interest charged is lower.
Interest rates: Fixed and adjustable rate mortgages are the two most common types of mortgage loans. Deciding which type of mortgage to apply for depends on which best fits your needs.
- Fixed rate: For a fixed rate mortgage, the interest rate is generally set above market rates but remains consistent over the entire life of the loan.
- Adjustable rate: Adjustable interest rates can fluctuate over the length of the term, but the initial interest rate is set below the market rate. In other words, it can save you money in the short-term, but interest rates fluctuate and may increase
over time, so it could cost you more in the long-term.
Closing on Your New Home
Once you’ve applied for and secured a mortgage loan, you’re ready to close, which is also a process your MLO can assist with.
As part of the closing process, you’ll generally want to get a home inspection, which provides an in-depth examination of the home. Home inspections can reveal any underlying issues that you might want to address. Some prospective buyers negotiate
with sellers by asking them to make repairs or replace major appliances before they finalize their purchase.
Before you move into your new home, you’ll also need to pay closing costs to finalize your purchase, which commonly include fees for appraisal, inspection, origination and title fees, among others.
Connect with a lending expert today to find out how you can apply for a mortgage.
Types of Mortgages:
The type of mortgage you ultimately select will depend on multiple factors. Certain buyers might qualify for programs that are designed to support specific individuals, like first-time homebuyers, veterans and buyers in rural areas. Mortgage loans are
generally broken down into two primary groups: conventional and government sponsored.
- Conventional: A conventional mortgage is a loan made by a private organization, such as a bank. First Merchants offers a variety of conventional mortgages, including fixed rate, adjustable rate, jumbo and construction loans.
- First-Time Homebuyer: We offer lending products to meet first-time homebuyer and newly single mortgage needs. Grant
funds are available periodically through our partnership with the Federal Home Loan Bank of Indianapolis.
- First Merchants Next Horizon Program: The First Merchants Next Horizon Program offers buyers with limited credit history affordable housing with up to 100% financing, lower monthly payments and options for Grant funds. Learn more
about the First Merchants
Next Horizon Program benefits and eligibility requirements.
- Jumbo mortgage: Buyers seeking a home valued above traditional limits will likely need to qualify for a jumbo mortgage loan. These loans, which are available with fixed or adjustable rates, are intended for borrowers seeking
to finance loan amounts above $548,250.
- Construction loans: We also provide construction loans for buyers who prefer to start from scratch. Whether your project is big or small, we’d love to serve you.
Government programs: First Merchants can also assist buyers who qualify for government sponsored mortgage programs, some of which offer down payment assistance and reduced interest.
Download First Merchants Mortgage Loan Originators' Unique Identifier Numbers