Brian Parkinson Mortgage Banker

Latest Posts

  1. 5 Tips in Preparing for a Home Purchase

    1. Education!

    First time home buyers especially should start the home buying process by educating themselves. There are many ways to do this – reading articles, listening to podcasts, talking to professionals in the industry. That’s where we come in! By talking to a loan officer, you will better understand how much you can afford, what financing options and strategies are best for you, and what assistance programs may be available. Surround yourself with knowledgeable professionals who you trust, and you’ll start on the right path!

    2. Check your Credit Score

    Make sure to check your credit score before applying for a loan. To do this, visit one or each of the three credit bureau’s websites (Experian, Transunion, and Equifax); each bureau allows you one free credit report each year. Your credit score determines whether you’re eligible for a mortgage and influences your interest rate. The higher your score, the better your interest rate, the cheaper your monthly mortgage payment. Most mortgage programs require a minimum credit score between 580 and 620, however any score at or above 740 will get you as good a rate as possible.

    Checking your credit score well ahead of the home buying process will grant you time to improve a low credit score if necessary. To maintain a good score, make sure to keep making your debt payments on time and don’t close or open any new credit accounts prior to the mortgage approval process, as sudden changes could negatively impact your credit scores. Keeping your credit card balance at or below 20% of the credit limit will also be an important key to gaining high credit scores. We are here to help you in the event your credit score needs improvement!

    3. Save and Plan for the Down Payment and Closing Costs

    Make sure you have a savings plan in place when planning a home purchase! Outside of special programs we offer (VA and doctor loans, for example), you’ll need to pay a down payment and closing costs at closing. Conventional loans require at least 3 – 5% down, and closing costs are typically 3-4% of your loan amount. Note that part of these closing costs aren’t actually fees associated with your loan, as they include setting up tax and insurance escrows and paying for your first year of home insurance at closing.

    For example, say you’re purchasing a home for $300k and putting 5% down. This amounts to $15k in down payment costs and about $10,000 in closing costs; $25,000 in total.

    When applying for a loan, we will ask you for asset statements to confirm you have enough cash for your down payment and closing costs. In the event you are short on cash, we will help you explore options such as down payment assistance programs and use of gift funds, or a loan from a 401K account.

    4. Get pre-approved!

    Getting pre-approved with us at Alerus is easy. Our online application prompts you to answer questions and upload documents necessary to get you approved. If you’re a salaried employee, all we need to get you started are paystubs, W2s, bank statements, and a picture of your driver’s license. Pre-approvals are an important part of putting an offer in on a home: they show the seller that you are both willing and able to buy the home. Along with your pre-approval, you will know what price point you are qualified for and what kind of interest rate you’ll receive.

    Pre-approvals expire after 120 days, but can be quickly renewed with updated paystubs, bank statements and pulling new credit, which will not hurt your credit scores. Alerus is unique in that we guarantee our pre-approvals with a $20,000 Platinum Guarantee letter. This helps makes your offer more trustworthy to sellers!

    5. Hang tight!

    Once you’re pre-approved and begin the home search, make sure you don’t undergo any major changes in your finances. Don’t switch jobs, don’t open a new line of credit, don’t make large purchases, and keep up with your debt payments to ensure your pre-approval isn’t negatively impacted.  Make sure to keep our contact information on hand in case you have any questions about how major life changes could affect the buying process. We want to be there for you whether you purchase today, tomorrow, or in the next year.

    Ultimately, having a conversation with a loan officer is a great place to start the home buying process. I will help you weigh all the many factors and find a solution and product that’s best for you. Please do not hesitate to reach out to me to get this conversation started. I am always available to answer an email or a phone call at 612-282-5863 and!!