Mortgage Options

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Find the Right Mortgage Option for Your Home Financing Needs

There are several types of mortgages that a person can choose from when buying a home. It’s important to understand each one before making a decision.

Conventional

Conventional mortgages follow the lending guidelines set forth by government-sponsored enterprises the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). A conventional mortgage can come with low closing costs and flexible payment options.

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Highlights

  • Down payments as low as 3%
  • No mortgage insurance options
  • Low monthly mortgage insurance, if required
  • Multiple mortgage insurance payment structures available, if required
  • There are several types of conventional mortgages:
    • Fixed Rate: For borrowers that prefer to keep the same rate and same monthly payments throughout the duration of their mortgage.
    • Adjustable Rate: These start with a fixed rate for a set amount of time (7 or 10 years), after which the rate resets to the prevailing interest rate which may vary over the remaining loan life. For borrowers who don’t plan to be in their home very long or are prepared to refinance later.
    • Jumbo: Mortgages above $726,200 are considered jumbo mortgages and have special rules. Because of the large size of these loans, the interest rates tend to be higher and the approval requirements more stringent.

Renovation

Do you love your neighborhood, cherish your connections with neighbors, or hold countless memories in your family home? Perhaps you’ve been house hunting but just can’t find the perfect fit within your budget. The solution may be closer than you think—right within your own walls.

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New Construction

With a new construction loan, you can afford to turn a fixer-upper into your dream home or build it entirely from scratch. These loans are available as a stand-alone option or, in some cases, in conjunction with a new home purchase or refinance.

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FHA

Federal Housing Administration (FHA) loans offer many benefits for those seeking a low down payment with less than perfect credit. As an FHA-approved lender, BankSouth Mortgage may offer you this type of loan, guaranteed by the FHA, to provide you with more financing options.

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Highlights

  • Less restrictive qualification guidelines
  • Designed to benefit many first-time homebuyers
  • Some borrowers may qualify for down payment assistance
  • FHA refinance products, including low documentation or streamline refinance options, are also available.
  • FHA’s Streamline Refinance program allows qualified FHA-insured homeowners to refinance without an appraisal.

Jumbo loans

A jumbo loan is a loan with a loan amount larger than the limits set by the Federal Housing Finance Agency (FHFA) and followed by Fannie Mae and Freddie Mac. For most parts of the country, the current Conforming Loan Limit is $832,750 for a single-family home. Loan limits are higher in more expensive counties. Because of the large size of these loans, the interest rates tend to be higher and the approval requirements more stringent. BankSouth Mortgage offers jumbo programs with low down payments.

USDA Rural Housing

USDA Loans are an excellent option if you’re purchasing a home in a rural area. Funds can be used to build, repair, renovate, relocate a home, or purchase a home. There are no down payment requirements, and qualifying is typically easier than for conventional mortgages. The property must be located in an eligible area to qualify and income caps also apply.

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Highlights

  • 100% financing options available
  • Thin or alternate credit allowed
  • Low monthly mortgage insurance
  • No maximum sales price

Refinancing

With interest rates still at relatively low levels, refinancing your mortgage could be a wise financial decision. Refinancing may lower your rate, reduce your loan term, allow you to take cash out to pay down debts or do home improvements.

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VA Home Loans

You served with honor, now let us honor your dream of home ownership with special financing for our country’s military personnel. VA loan programs offer favorable terms and include options to buy, build, renovate, and refinance your primary residence. Veterans and spouses may also qualify.

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Highlights

  • 100% financing options available
  • No monthly mortgage insurance
  • No borrower paid underwriting costs or lender origination fees (optional)
  • Thin or alternate credit allowed
  • We invite you to speak with one of our Mortgage Bankers about learning if a VA Loan or VA Renovation might be right for you.
  • You can request proof of eligibility by contacting the VA Loan Eligibility Center (1-888-768-2131) or by having your BankSouth Mortgage Banker request this certificate on your behalf.
  • VA loans have a one-time Funding Fee, unless the Veteran/borrower is exempt, with no monthly fee charged.

Mortgage Programs

Low to No Down Payment

ReadyAssist connects qualified buyers with down payment assistance (DPA) programs that help reduce upfront costs. These options are designed to make homeownership more accessible by providing support for your down payment so that you can move into your new home with less money out of pocket.

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Escrow Holdback Program

If needed repairs are holding up your home purchase, our Escrow Holdback Program can help. It allows up to $25,000 to be set aside at closing for non-structural repairs—so you can move forward without delays.

Available for FHA, VA, USDA, and Conventional purchase loans, this option gives you time to complete required repairs within 15 days of closing. The lock period must cover that timeframe, and work must be done by a licensed contractor.

Talk with your loan officer to see if an escrow holdback is right for your situation.

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Escrow holdbacks are often used to address issues like:

  • Approval of newly installed systems like a septic system, for instance
  • Repair work that has not yet been completed
  • Renovations that have yet to be completed
  • Title issues
  • Other seller obligations required for closing

Rate Lock

A rate lock is a commitment issued by a lender to a borrower which guarantees a specified interest rate and lender costs for a specified period of time based on transaction details and meeting required qualifications.

What Happens After I Prequalify?

 
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Step 1

Initial Mortgage Consultation

When you begin thinking about buying a home, contact BankSouth Mortgage to get prequalified. A prequalification gives you an estimate of the size of mortgage loan you qualify for based on your credit history, income, and assets. At this time, your mortgage banker will discuss loan options, down payment requirements, and current interest rates. Simply follow this link to securely apply online. This will give your loan officer the preliminary information they need to determine your prequalification. This is also the perfect time to get set up with our electronic portal to make it easier to securely exchange documents and information throughout the mortgage process.

Step 2

Initiate Loan Application

Once you go under contract, we will provide you with an initial list of documentation needed to begin processing your loan. Quickly providing all requested documentation is essential to moving through the loan process without delays. Also, your BankSouth Mortgage expert will discuss locking in your interest rate and encourage you to get a hazard insurance quote from an insurance agent.

Step 3

Disclosures

Once we have a complete application, we will prepare a packet of disclosures for you to sign. Included in these disclosures is the Loan Estimate, which contains information on the cost of your loan. It is very important to review this closely and talk to your loan officer about any questions you may have. Revisions to your loan later on in the process may push your closing date back. It is extremely important for you to sign and return all disclosures within 24 hours from receipt. Any delay with returning your disclosures may delay your closing. Fees for your appraisal will be collected once we have received your disclosures and payment information.

Step 4

Estimated Market Value

Once you have received your loan estimate and disclosed your intent to proceed, BankSouth Mortgage will order your title work and appraisal. The appraisal process identifies the market value for the property. These generally take at least 10 days from the date requested to delivery. As soon as we receive the appraisal, we will provide you and your realtor* with a copy.

*We commit to providing timely and accurate information to your realtor when prior authorization is received from you.

Step 5

Loan Processing

Next, the loan moves to a loan processor, who reviews the file to ensure all the proper documentation is included. You may be contacted to provide any outstanding or additional items, and verifications of employment, etc. may be obtained. Once all the requested information is gathered, the loan will be passed on to underwriting so that a final determination can be made. By this point in the process, please try to limit changes to your contract to ensure a smooth closing.

Step 6

Underwriting

An underwriter will investigate the information in the file and make the final decision on the loan approval. Underwriting can take as little as one day and up to two weeks, depending on the type of transaction and market conditions. Because each loan is unique, it is common practice for the underwriter to request additional documentation to support what was submitted in the original file. We will notify you if additional items are needed, as well as when a final decision has been made.

Step 7

Review Your Closing Disclosure

A critical component of the loan process is YOUR confirming receipt by signing the Closing Disclosure (CD) a minimum of 3 business days before closing. This document further reviews the cost of your loan. BankSouth Mortgage makes every effort to send you this document with ample time to review. However, due to the often expedited nature of the mortgage process, you may receive this document close to the third day prior to closing deadline. As soon as you are able to review this document, it is imperative you sign and return it as quickly as possible. Signing only confirms your receipt of the CD. This integral step requires close communication with your lender to ensure an on-time closing.

Step 8

Closing!

Three days after you return your signed Closing Disclosure, you are able to close on your loan! Depending on the amount due at closing, you may need to send a wire to the closing attorney. At the closing, you and the seller will be required to sign the final loan closing documents. After the closing documents are signed, BankSouth Mortgage will wire funds for the amount of the loan to the closing agent. The closing agent will disperse the funds. The deed that transfers the title from the seller to you will be sent to the county in which the home is located to be recorded. You will receive the original deed once it has been recorded along with your owner’s title insurance policy if you purchased insurance at closing.

Modern two-story suburban home with warm exterior lighting at sunset, representing the dream of homeownership.

About the Homebuying Process

Buying a home is one of the biggest financial decisions you’ll ever make, and understanding your options is the first step toward feeling confident. Download our free Homebuyers Guide for a complete walkthrough of the mortgage process, including loan types, required documents, and expert tips to help you prepare from pre-approval to closing.
Learn More & Download the Guide

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BankSouth Mortgage Company, LLC, NMLS #690971, is a wholly owned subsidiary of BankSouth, NMLS #688851, a federal savings bank and Member FDIC. BankSouth Mortgage Company, LLC, is not a bank or other depository institution and is not FDIC-insured. Alabama Consumer Credit License #MC 21415 DBA LoanSouth Mortgage.