Becoming a Homeowner with Eastern Bank
Whether you’re a first-time homebuyer just starting your journey to homeownership or you’re looking to upgrade your current situation to account for a growing family, or considering purchasing an investment property, Eastern Bank has a range of options for residential mortgages in Connecticut, Massachusetts, New Hampshire and Rhode Island to suit your individual needs.
Call us at 800-EASTERN to speak with a Mortgage Specialist and obtain an honest, accurate quote with integrity.
Take a first-time homebuyer class
For first-time homebuyers, the homebuying process will be unfamiliar territory and a first-time homebuyer program will help make the process clear and understandable. This will help you prepare for the road ahead and estimate the amount of time needed for each step, learn what documents you’ll need, how to compare different mortgage products and outline the entire process from home search to move-in day.
Many mortgage programs, including grants and down-payment assistance programs, will require that you take a first-time homebuyer loan course, and even if yours doesn’t, you will learn a lot about what you can expect from the homebuying process as well as what it’s like to be a homeowner.
A first-time homebuyer class will cover topics such as:
- Budgeting & estimating much house you can afford
- How to improve your credit score
- Deciding what type of property to buy
- Different mortgage products to consider
- How to comparison shop real estate agents and lenders
- Home maintenance
- Mortgage default prevention
The Homebuying Process
For first-time homebuyers and housing market veterans alike, there are a handful of steps to becoming a homeowner:
- Prepare yourself financially
- Get preapproved for a mortgage
- Find a home
- Get ready to purchase your home
- Close on your home loan & move in
Prepare Yourself Financially
Determine how much house you can afford
Financially, the first step toward homeownership involves improving your creditworthiness and saving for a down payment, which is the portion of the purchase price you'll pay up front in cash. The down payment can come from your savings, a gift, a grant or some combination of these depending on the program.
Speak to your mortgage professional about grants and down payment assistance programs. Many first-time homebuyers will be able to purchase a home with as little as 3% to 5% of the purchase price in down payment.
Your credit score: What does it mean?
You can obtain a free copy of your credit report each year from the three credit reporting agencies (Equifax, Experian and TransUnion) by visiting annualcreditreport.com.
These free reports provide an overview of your credit history; typically, there is a fee associated with getting your credit score. Your credit score can be adversely impacted by late payments, bankruptcy, collections and/or little to no revolving credit available due to high balances. And since your credit score (or rating) is a major factor in qualifying for a mortgage and determining the interest rate a bank will offer you, it is important to call the reporting agency right away if you feel there is a mistake.
Review your income and make a budget
Typically, lenders are comfortable with borrowers using 30-35% of their monthly pre-tax income for a mortgage payment, but it could be higher depending on other factors. Speak to your mortgage professional about your specific situation. Don’t forget to include estimated monthly taxes and insurance in your monthly payment. Remember that the cost of these items tends to increase over time.
To assess your ability to repay a loan, lenders will want to see two years of steady employment and the probability that your income will continue. Bonuses and overtime can generally be used if you’ve been earning them for at least two years.
Eventually, you'll need certain documents for your loan application to verify your income and assets, so it might be a good time to start pulling them together while you're reviewing your financial information. The documents listed below are typically required to process a mortgage application, although the specific requirements for each loan may be different.
Income and employment:
- Paystubs from the last 30 days
- W-2s from the last two years
- Tax returns for the last two years
- Award letters for pension, Social Security, disability or other payments
- Bank statements from the last two months
- Mutual fund, retirement account and stock account statements from the last two months
- Bankruptcy discharge documents
- Divorce decree
- Source of gift funds
Later, when you have received a Loan Estimate and provided an Intent to Proceed to your lender, your loan officer will tell you which documents are necessary for your loan application.
Get preapproved for a mortgage
Choose a lender
You can trust our Eastern Bank mortgage team to provide you with great service and advice, as well as competitive programs and rates. Our knowledgeable, local Mortgage Loan Officers live and work in your community, and can help guide you every step of the way through the homebuying process.
With a budget in mind, now is the time to start considering your mortgage options; keep in mind the type of property you buy may determine the type of loan for which you are eligible. Discuss the difference between a variable-rate mortgage and a fixed-rate mortgage, jumbo and conventional mortgages, and the pros and cons of each with your mortgage professional.
Monthly payments for a fixed-rate mortgage will not change over the life of the loan, whereas with a variable-rate mortgage, monthly payments rise and fall with interest rates. Additionally, the rate on an adjustable-rate mortgage will typically be below market rate for the introductory period, then resets to the market rate for the remainder of the loan once that ends. If you think you might move or refinance within a few years of buying your home, an adjustable-rate mortgage may be an option to consider.
There are also local and federal programs to help people buy a home through down payment and closing cost assistance, as well as special loan terms. Your Eastern Bank mortgage professional can provide you with more information about these.
Choose the mortgage that's right for you
|Conventional Mortgages||First-Time Homebuyer Mortgages||Portfolio Mortgages||Government Mortgages|
Best if you...
Have stable income and credit history
Need to make a smaller down payment
Want your loan serviced locally by Eastern Bank
Are a veteran, are looking for a home in a rural area or have challenges with your credit profile
Often have the lowest rates and fewest restrictions
- Allow for small down payments
Larger fixed-rate loans and competitive adjustable-rate mortgages (ARMs)
Offer special features for veterans or those looking for a home in a rural area
Adjustable-rate mortgage (ARM)
Massachusetts Housing Partnership (MHP) ONE Mortgage
Eastern Bank Portfolio First-Time Homebuyer Mortgages
Adjustable-rate mortgage (ARM)
Veterans Administration (VA) loans
USDA Rural Housing Programs
Federal Housing Administration (FHA) mortgages
Get your preapproval letter
Before you start house hunting, you should get a preapproval letter so you know how much house you can afford. To do this, you will need to provide information about your income and assets to your lender and give permission to obtain your credit report.
Find a Home
Choose a real estate agent
Just as you'll want to work with a lender you trust, you’ll want to choose a real estate agent who will work hard for you and with whom you'll feel comfortable. Get recommendations from friends, family or your lender, and meet with several real estate agents before making a decision.
Real estate agents receive a commission on the sale of a property, so you may want to compare commission rates between any real estate agents you're considering.
Some real estate agents represent the buyer and some, the seller. Be sure to clarify representation.
Make an offer
Once you’ve found a home that meets your requirements, you should work with your agent to submit an offer. Your agent can help you determine the best price to offer and any other terms you may want to add, such as an ability to close quickly. You will also need to provide a small deposit, usually $500 or $1,000 at the time of the offer, then up to 5% when the Purchase and Sale Agreement is signed. An offer is a binding agreement, so it is a good idea to have an attorney at this stage.
Have your offer accepted
Getting your offer accepted may require some negotiating before you reach an agreement that is documented in the Purchase and Sale contract. Your agent will negotiate on your behalf. Once you and the seller agree on terms, you’re on your way!
Get ready to purchase your home
Apply for a loan
If you were already preapproved for a mortgage, you should notify your mortgage officer once your offer is accepted so (s)he can update your mortgage paperwork with information about the property and collect the documents necessary to complete your mortgage application – as well as any associated fees – and order an appraisal.
Final approval will be subject to receipt of a signed loan application and disclosures, verification of income, assets and other factors, satisfactory appraisal and title reports, continuance of satisfactory credit history and any other pertinent factors.
Shop for insurance
If you are buying a single- or multi-family home, you will need homeowner’s insurance; houses located in a flood zone require flood insurance as well. If you are purchasing a condominium, you may need to purchase a condominium insurance policy to cover the inside of your unit.
Prepare to move
Hire movers or a moving truck and start packing items you won’t need before moving day. Make sure to identify what's in each box and what room it belongs in.
Change your address
In addition to changing your address with the post office, make a list of all the other places you’ll need to update it: subscriptions, bills, doctors’ offices, your driver’s license, etc., and be sure to provide them with your new contact information.
Close on your home loan & move in
At the closing, you will need to bring a check for closing costs: fees for services such as processing the mortgage and the title search, the rest of your down payment, and prepaid expenses like taxes and insurance. You will sign all the documents that obligate you on your loan. The closing may be held at a title agent’s office, a registry of deeds or another place that you, your lender and the closing agent agree on.
You will receive a First Payment Letter that will tell you the amount of the first payment, the date it is due, and the address to which it should be sent. If the servicing on your loan is being sold, you may receive a letter from the servicer with a new payment address.
If at any time during the term of the mortgage you think you may have trouble making a payment, notify your lender as soon as possible so they can help you figure out a plan to get back on track.
Additional resources for homeowners
Visit the Eastern Financial Academy for more information about preparing for home ownership.
This is not a commitment to lend. Subject to program guidelines and credit approval. Other terms and conditions may apply.