The Loan Process

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• Five Ways to Make the Loan Process Go Faster

  We should say that "working with us" is the first way! When you let us help you find the loan that's right for you, you truly are taking advantage of some of the area's best technology and expertise to get you a loan decision and funding on your loan quickly.

  But here are five "other" ways you can speed up the process of getting a mortgage loan:

  1. Have everything ready and in one place.
     Elsewhere on our website, you'll find a list of things you might need in support of your mortgage application. If you get them all together and keep them in a safe, portable place like a special pouch or folder, you can cut down on time spent rooting around for things we may need. Also, you'll help cut down on your own anxiety and confusion.
  2. Be honest and complete when you fill out your application.
     "Fudging" your employment or residence history or omitting open credit accounts you'd rather not have considered doesn't increase your chances of getting a favorable loan. In 100 percent of cases, it makes it harder, and take longer.
  3. Respond promptly to requests for additional information.
     During processing, we or the lender considering your loan may need additional information. Provide it as soon as you get the request, or return the call as soon as you get the message.
  4. Be prepared to explain derogatory items in your credit report.
     This is really part of number 2 above. If you had an illness or a divorce where you missed or made late payments, or you have other instances of late payments or delinquencies on your credit report, be prepared to explain them. Be honest, and don't be nervous! The loan processor isn't judging you, they're trying to fill in all the blanks in their paperwork.
  5. Let the appraiser in!
     The appraisal is one of the lengthiest parts of the mortgage loan process. Studies have shown that the single biggest factor in appraisal "lag time" is the appraiser's inability to reach the homeowner to make an appointment. If you're refinancing and the appraiser calls to make an appointment, make it as soon as convenient for both of you.

  
  And remember that the appraiser doesn't want to buy your house. He or she will say what the house is worth clean and tidy and in reasonable repair, even if you have some dirty laundry on the laundry room floor or dirty dishes in the sink. Cleaning doesn't get you a higher appraisal! Letting the appraiser in as soon as possible gets you a loan faster, though.

• Differences Between Fixed and Adjustable Rate Loans

  Are you looking for a new mortgage loan? We can assist you! Contact one of our Mortgage Loan Officers today!

  A fixed-rate loan features a fixed payment amount over the life of the loan. The property taxes and homeowners insurance which are almost always part of the payment will go up over time, but generally, payment amounts on these types of loans don't increase much.

  At the beginning of a fixed-rate mortgage loan, most of your payment goes toward interest. This proportion gradually reverses itself as the loan ages.

  You might choose a fixed-rate loan to lock in a low interest rate. Borrowers choose fixed-rate loans because interest rates are low and they wish to lock in this low rate. For homeowners who have an ARM now, refinancing into a fixed-rate loan can offer more monthly payment stability. If you have an Adjustable Rate Mortgage (ARM) now, we can help you lock in a fixed-rate at a favorable rate. Call one of our First National Bank Mortgage Loan Officers to learn more.

  There are many kinds of Adjustable Rate Mortgages. ARMs usually adjust twice a year, based on various indexes.

  Most programs feature a "cap" that protects borrowers from sudden increases in monthly payments. There may be a cap on interest rate increases over the course of a year. For example: no more than a couple percent per year, even if the underlying index goes up by more than two percent. Your loan may have a "payment cap" that instead of capping the interest rate directly, caps the amount that your monthly payment can go up in a given period. The majority of ARMs also cap your rate over the life of the loan.

  ARMs usually start out at a very low rate that usually increases as the loan ages. You may have heard about "3/1 ARMs" or "5/1 ARMs". In these loans, the introductory rate is set for three or five years. After this period it adjusts every year. These types of loans are fixed for a certain number of years (3 or 5), then adjust. These loans are usually best for people who anticipate moving within three or five years. These types of ARMs most benefit people who will sell their house or refinance before the loan adjusts.

  Most borrowers who choose ARMs choose them because they want to get lower introductory rates and don't plan to stay in the house for any longer than the initial low-rate period. ARMs can be risky in a down market because homeowners could be stuck with rates that go up when they can't sell their home or refinance with a lower property value.

  Have questions about mortgage loans? Contact one of our Mortgage Loan Officers today! It's our job to answer these questions and many others, so we're happy to help!

• What Information Will Be Needed for the Application (And How it's Kept Private)

  Below is a list of documentation that may be required when reviewing your loan application. All applications and documentation can be submitted through our secure, online portal. Please review our Privacy Policy for more information on how we keep your personal information secure.

  For all loans

  • Social Security Number, for borrower and co-borrower if any
  • Employment History
    • For the last two years, employment dates, addresses, salary
    • 30-days of current pay stubs and last two years W-2's
  • Checking and Savings Accounts and Certificates of Deposit
    • List of bank accounts and balances
    • Last 2 month's statements (ALL pages)
  • Stocks, Bonds, and Investment Accounts
    • Last 2 month's statements (ALL pages)
  • Life Insurance Policies
    • Copy of most recent statement (ALL pages)
  • Retirement Plan
    • Last 2 month's statements (ALL pages)
  • Automobiles
    • Make and model of automobiles, their resale value
  • Liabilities and Other Non-Mortgage Debt
    • Creditors names, addresses, account numbers
    • Monthly payments and balances

  
  Other income information you may need

  • If you're self-employed
    • Two years tax returns, profit and loss statements, both company and personal if separate
    • Current balance sheet and profit and loss statement if more than 2 months into the new fiscal year
  • If you have income from:
    • Commission
    • Overtime
    • Bonus
    • Partnership
    • Rental Property
    • Trust
    • Notes Receivable
    • Interests/Dividends
      • You'll need 2 years' personal federal tax returns
  • If divorced or separated
    • Complete executed divorce decree and settlement agreement
    • If you choose to have child support considered as part of your income (you don't have to), be prepared to provide 12 months canceled checks or bank statements reflecting income deposits.

  
  If you own real estate

  Provide most recent mortgage statement and verification of taxes and insurance, if not included in payment, for each property owned.

  • If you've sold your home but not closed:
    • A copy of the sales contract
  • If you've sold your home, closed, and you will use the proceeds for your new down payment:
    • A copy of the HUD-1 Uniform Settlement Statement

  
  If you rent

  • Name, address and phone number of landlords for the past 24 months

  
  If you're buying a home

  • Purchase sales contract or offer to purchase and all addenda
  • Furnish contract with original signatures of buyer and seller
  • If a source of your down payment is a gift:
    • Name, address and relationship of donor
    • Gift funds will be verified in both the donor and recipient's accounts
    • Note: Not all loan programs allow gifts to be part of your down payment

  
  Identification

  • Copy of driver's license or other photo identification for each borrower

  
  For VA financing

  • DD214 and VA form 1880 or Certificate of Eligibility

  
  For Construction/Perm Loan

  • Signed construction contract with cost breakdown, builder plans and specifications
• Why It's Important to Pre-Qualify

  Have questions about pre-qualifying? Contact one of our Mortgage Loan Officers today! First National Bank answers pre-qualifying questions every day. Want to get started? Apply Online Now.

  It's valuable to consult with your mortgage professional as soon as possible - even before you have started to consider neighborhoods. Why? How can we help before you have made your offer, and do not yet know the amount you want to borrow?

  Pre-Qualify

  We can help determine how much of a mortgage loan you can afford, and how much money you can borrow, by walking you through the pre-qualification process. In the process, we explore your ability to borrow - analyzing your employment, money available for down payment, debts, income, and other areas. We require a minimum amount of paperwork, with a quick process.

  We'll award you a Pre-Qualification Letter when you qualify, that documents that we're confident you'll qualify for up to a predetermined amount of mortgage loan dollars.

  Buying Clout

  Armed with your pre-qualification letter, several advantages are yours when you locate the home you want to make an offer on. First, it helps you know the amount that you are able to offer. Being pre-qualified also will make your offer more attractive to the seller, as if you were bringing them a suitcase of cash! They won't have to wonder if they have been wasting their time if you can't have the ability to qualify for a high enough mortgage loan. The seller won't worry if he can count on you to qualify for your mortgage in the amount you will need. Your qualifying for your needed loan amount will not be something for them to be concerned about. They have a virtual guarantee that they can trust your buying power.

  We can help you pre-qualify

  We can help you calculate how much of a mortgage you can afford, and the amount of money you will be able to borrow, by walking you through the pre-qualification process. This process outlines your current financial situation - your debt, income, employment, cash available for down payment, among other things. We will require a minimum amount of paperwork, and avoid a lengthy process.

  One-on-One

  While you are able to use our mortgage calculators on our site, it's a good idea to meet with one of our mortgage professional team members. For one thing, you will want a Pre-Qualification Letter! For another thing, we may locate a different mortgage loan option that fits your goals better. We are eager to meet with you: contact one of our Mortgage Loan Officers.

• When is Refinancing Worth it?

  Want to know more about refinancing your home? Contact one of our Mortgage Loan Officers today!

  It has been said that only when your new interest will be at least 2 points lower, should you refinance your loan. Maybe several years ago that was sage advice, but since refinance costs have been falling recently, it could be a good time to take a serious look. Refinancing has some advantages that can make it worth the initial expenditure many times over.

  Benefits from Refinancing

  You could be able to bring down your interest rate (sometimes by a lot) and make smaller monthly payments with a refinanced mortgage loan. Additionally, you may be given the option of tapping into your home equity by "cashing out" some money to fix up your home, consolidate debt, or plan a special vacation. With lower interest rates, you might also get the chance to build up home equity faster by moving to a shorter term mortgage loan.

  Expenses and Fees

  All of these advantages do cost something, though. When you refinance, you're paying for basically the same things you paid for during your current mortgage. Among these may be settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.

  You could have to pay a penalty for refinancing your present loan too soon. This depends on the rules of your present mortgage loan. These penalties might just apply for the first couple of years. We'll help you with the details: Contact one of our Mortgage Loan Officers today!

  Doing the Math

  You might investigate paying points to be given a better interest rate. Your savings over the life of the mortgage loan could be significant if you have paid up front about three percent of the new loan balance. You may be told that these points may be deducted on your income taxes, but since tax regulations can be ever-changing, please consult a tax professional before considering this in your calculations.

  Another thing about taxes is that if your interest rate is reduced, naturally you will also be lowering the paid interest amount that you'll be able to deduct from your taxes. This is one more expense that borrowers take into consideration. Contact one of our Mortgage Loan Officers to help you do the math.

  All things considered, for most borrowers the total of initial costs to refinance will be paid back soon in savings each month. We will help you determine what loan program is the ideal fit for you, taking into account your cash on hand, how likely you are to sell your house in the next few years, and how refinancing might affect your taxes. Contact one of our Mortgage Loan Officers today to get started.

  Shopping for a mortgage loan? We will be glad to assist you! Contact one of our Mortgage Loan Officers today! Ready to get started?