FMFCU has a variety of options for purchasing or refinancing your home. Our experienced loan officers will be happy to help you evaluate your options.
Conventional loans are made in accordance with the guidelines of Fannie Mae and Freddie Mac. Conventional loans allow the borrower to borrow up to 95-97% of the value of the home. The 3-5% down payment requirement must come from borrower funds. The maximum loan limits are reviewed annually and, if needed, changed to reflect changes in the national average price for single-family homes. Currently, this limit is at $453,100. Loans with less than a 20% down payment require the payment of Private Mortgage Insurance (PMI). PMI is insurance that the borrower pays to the lender and its coverage protects the lender in the event of default.
Non-conforming loans do not meet the guidelines of Fannie Mae, Freddie Mac or FHA. Most lenders would not have an alternative for borrowers not meeting these guidelines, but FMFCU will listen to each borrower scenario and see if a counter offer can be made for those who may be credit challenged yet have substantial equity in a property or the ability to for a significant down payment. FMFCU has several non-conforming loan options for members who may not otherwise be approved for a mortgage loan and they are reviewed on a case-by-case basis.
The interest rate and principal payment remain unchanged throughout the length of the loan. We offer fixed rate mortgages with various terms.
Adjustable Rate Mortgage (ARM)
A loan with a payment that may adjust up or down based on interest rate changes. ARMs can be an attractive alternative since they offer lower interest rates than fixed-rate mortgages. When you see an ARM described as a 3/1 ARM or 5/5 ARM, the first number is the number of years the interest rate is locked in. The second number is the number of years between possible rate adjustments. These are known as hybrid ARM’s. We offer various ARM products to fit your needs.
FHA mortgages are made in accordance with the guidelines of the Federal Housing Administration. FHA loans were designed for low to moderate income borrowers who are unable to make a large down payment, however, borrowers of all income levels may qualify. FHA loans allow the borrower to borrow up to 96.5% of the value of the home. The 3.5% down payment requirement can come from a gift or a grant, which makes FHA loans popular with first-time buyers. The maximum loan limits are reviewed annually and, if needed, changed to reflect changes in the national average price for single-family homes. This mortgage type requires Mortgage Insurance Premium (MIP), which is insurance that the borrower pays to the lender and its coverage protects the lender in the event of default. MIP is required to be paid on all FHA loans, regardless of down payment amount and is significantly more expensive than PMI.
Jumbo loans are loans that exceed the conforming loan limit and, therefore, are unable to be purchased by Fannie Mae and Freddie Mac. The approval process follows conventional loan guidelines and FMFCU offers the same conventional rate for loan amounts up to $650,000.
Construction loans are loans that allow you to build your own home on your own lot using a General Contractor. Funds are distributed to you and your builder according to a draw schedule. As construction nears completion, you can lock in the terms of your permanent financing.
Some borrowers prefer to obtain two loans to purchase or refinance their home to avoid the payment of PMI, known as a piggyback mortgage.