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 3% down payment option has a household income limit. The maximum loan limits are reviewed annually and, if needed, changed to reflect changes in the national average price for single-family homes. 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. FMFCU will review each borrower scenario to determine if a counter offer can be made for those who may be credit challenged, have excessive monthly obligations, and yet have substantial property equity to make 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. “Non-conforming” can also consist of the following alternatives:
The interest rate and principal payment remain unchanged throughout the term of the loan (30, 25, 20, 15, or 10 years).
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, 5/1, 5/5, or 7/1 ARM, the first number is the number of years the interest rate is fixed. The second number is the number of years between rate adjustments. These are known as hybrid ARMs. We offer various ARM products to fit your needs, some with no down payment requirements or cash out options, allowing more cash back than fixed rate loans.
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 amount.
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. The Piggyback Mortgage can be a fixed-rate option or Home Equity FLEX Line of Credit option.