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Mortgages and
Financing Options

F&M Mortgage lenders will take the time to personally lead you through the home loan application process. You can meet with one of our F&M Mortgage lenders in person or one can help you over a phone conversation. You can also apply online and promptly receive a response. Find an F&M Mortgage lender and start the journey to buying your new home!

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Mortgage Purchase

At F&M Mortgage you’ll find a variety of competitive mortgage loans and helpful services to suit your needs. Your F&M Mortgage lender will help you determine the right type of loan by explaining payment options and terms. Interest rates change every day and we can help you lock in a great mortgage rate today.

Purchasing Tips

Home Buying Tips

Pre-Qualify For Your Loan ... Then Go House-Hunting

An important step in purchasing a home is determining what you can afford to spend on the monthly mortgage payment. After evaluating your financial situation, you may be pre-qualified with an estimate of a purchase amount. Then you’ll be ready to shop for the homes that are in your price range….saving you time, effort and money. Let F&M pre-qualify your application so that you can shop with confidence when making an offer on a new home.

Once you have found a home your mortgage lender may request additional financial, employment and personal information. Providing complete, accurate information will result in a faster process, approval, and closing of your loan.

The Loan Closing

Before closing day, your closing agent will give estimates of your closing costs so you can plan your expenses. This loan estimate will help you and the lender decide if the expenses to buy a home can be covered by your income. Closing costs vary depending on financing, but they generally include items such as down payment, appraisal fees, prorated property taxes, insurance, attorney’s fees, and lender’s fees and expenses. Before the closing date, title companies will make sure the title is clear and you will also need to review a closing disclosure.

The final stage in the loan process is the Loan Closing. It’s the date on which the title for the property passes from the seller to the buyer… and the day you take legal ownership of your new home!

Explore Financial Calculators

Types of Loans | FIXED VS. ARM

FIXED RATE LOANS

The fixed rate mortgage is the most common type of mortgage product. In addition to being simple, a fixed loan provides the peace of mind of a set monthly payment (principal and interest) that do not change over the term of the loan. The loan balance is reduced monthly over the set term of the loan, and there is no prepayment penalty for making additional payments to the principal. This is ideal for someone who wants the peace of mind of a set payment, regardless of fluctuations in the financial markets. Repayment periods are generally 30 years, but they are shorter-term options as well.

ADJUSTABLE RATE LOANS

Adjustable rate mortgage allows the borrower to take advantage of short term rates, generally resulting in lower initial monthly payments than fixed-rate mortgages. The interest rate resets at the end of the rate term, usually resulting in a lower amount of principle to re-price, or refinance. This is ideal for someone who is interested in qualifying for a larger loan, lower payments, and the ability to save money in the short-term. Borrowers who are comfortable taking on risks or who feel their income will increase to cover possible payment increases often make this choice.

Refinance

People often choose to refinance their mortgage. When you refinance, you take out a new loan to finish paying off the original loan. The main reason people choose to refinance is to reduce their monthly payments and lower their interest rates. Another benefit of refinancing includes the ability to switch from an adjustable-rate mortgage to a fixed-rate loan.

How Does The Refinancing Process Work?

Reduced Monthly Costs

When you refinance your home, you reduce your monthly interest rate which can save you money. If you can lock in these reduced interest rates in a fixed income plan, you can save even more money in the long term.

Equity Access

As part of the refinancing process, you can borrow against your equity and get cash for the difference. This is called a cash-out refinance, and you can use these funds to further improve the equity in your home.

Pay Off Your Loan Faster

One of the biggest advantages of refinancing your loan is reducing how long it takes to pay off your loan. You can choose to switch from a 30-year loan to a 15-year fixed loan. Your monthly payments will probably increase, but you’ll pay less interest over the length of your loan than otherwise.

Consolidated Mortgage and Home Equity Line of Credit or HELOC

These plans allow you to focus on paying off a singular amount. Usually, HELOC plans are written with adjustable interest rates. Therefore, if you can find or switch to a fixed interest rate plan, you can save more money in the long-run.

Common Questions About Refinancing

How Does My Credit Score Affect Refinancing?

Like it does for the rates of other loans or credit cards, your credit score significantly influences your mortgage rates. It also influences when you can refinance. In summary, it boils down to the higher your credit score, the less you will have to pay on a monthly basis.

How Can I Find the Best Refinancing Rates?

In order to find the best mortgage rates for you, you’ll need to do some research and crunch some numbers. We have a refinance calculator here on our website to help you get started, as well as other financial calculators. Remember that fixed rates can help you save more money over time.

When Should I Refinance?

Because the market is always changing, it will depend on your personal situation. Your credit score can also influence these rates. If you have any questions about refinancing, give us a call!

Using a Refinance Calculator

Call F&M Bank and our financial advisors can help you explore your financing options. In order to use our refinance calculator, you’ll need to know your remaining balance, your interest rate, and your monthly payment rate. In addition, you’ll need to know your new rates, the desired new loan length, as well as your income tax rate, investment rate of return, and how long you’ll be keeping the property.

What If I Plan On Moving In A Few Years?

As with your existing mortgage, there will be paperwork and fees for refinancing your mortgage. If you plan on leaving your refinanced property in a few years, then you should determine your “break-even point.” By way of definition, the break-even point is where the savings from the refinance offset the cost of completing the refinancing process.

It usually takes at least two years for most mortgage holders to reach this point. To determine your specific break-even point, you will need to look at your closing costs, taxes, and other fees. After examining your costs, compare them against your savings from the reduced costs of your monthly mortgage payments.

How Long Does It Take to Get A Loan?

Due to the many factors involved in the loan process, it’s hard to pinpoint a general timeframe. It may take a few weeks, a few months, or more than a year to receive approval for your loan.

When you start the loan process, work with your financial advisor to estimate the timeframe for your loan.

What Does the Process Look Like?

First, determine the goal for your loan. Do you want to want to switch to a 15-year fixed-rate plan? Or do you want to save money and reduce your interest rates?

Second, begin shopping for mortgage rates. Keep in mind that even if rates are low, you may have higher fees when you first buy that plan. Take time to look into the details.

Third, begin applying for your mortgage. Keep in mind that you should execute this step quickly, so your credit score remains healthy. If you wait too long between filling out a loan application and selecting a lender, your credit score may decrease.

Fourth, compare loan amount and fee estimates and select your refinance lender.

Fifth, settle on your interest rate with your lender.

Finally, close out your loan. Here you’ll pay the closing costs stated in your loan’s terms. Then, the new loan is yours.

Home Construction

If you're building a home, a construction loan can be an ideal source of cash through the building process. Interest rates are competitive and closing costs are minimal. You won't pay any interest until the funds are used or drawn, giving you a convenient and affordable way to meet ongoing building expenses. And at F&M, we can easily convert your construction loan into permanent financing once your house is ready to be occupied.

Home Equity Loans

Ask About Our HOME EQUITY LOANS! If you own your own home and want to get favorable interest rates and terms. You can get the money you need from either a fixed-rate Home Equity Loan or more flexible Home Equity Line of Credit (HELOC). A home equity loan can help you get a lump sum of cash with a lower interest rate than a credit card. These loans are often used for home repairs. These loans can have a variable interest rate during the draw period, and this often depends on your credit score. Having a great credit score can ensure you get a prime rate.

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We'll Make Your Dream A Reality

Purchasing a home can be one of the most thrilling experiences of a lifetime. Whether you're a first-time home buyer, moving up to a larger home or refinancing your current residence, you'll find F&M Bank is here to help you every step of the way. Buying a home can also have its anxious moments. We understand the importance of your home-buying decision, and will make the journey an enjoyable one.

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Home Ownership Programs

F&M Mortgage offers several government-sponsored homeownership incentive programs. These financing options are designed to lower your interest rate, down payment amount and/or closing costs. Here are a few examples:

Ownership Program Examples

 Federal Housing Association (FHA) Loans

FHA loans provide mortgages for low and moderate income borrowers. FHA loans are only available from an FHA approved lender, like F&M Mortgage. Generally, these loans are available with low down payment options. Occasionally, closing costs can be included in the loan amount to further reduce up-front costs.

In order to qualify for an FHA loan with the lowest down payment option, you must have a credit score of at least 580. At this level, you will be required to pay a 3.5% down payment. If your credit score is under 580 and not less than 500, you can still qualify for an FHA loan with an initial 10% down payment.

FHA loans require you to also have:

  • A Mortgage Insurance Premium (MIP)
  • A steady income
  • Proof of employment
  • A Debt-to-Income Ratio of less than 43%

Finally, because these loans are designed to help people who are buying a home, your mortgage must be for your primary residence.

Why You Should Consider an FHA Loan

Compared to other government-sponsored loan programs, FHA loans offer some of the lowest rates and down payments. Most of the time, FHA loans are most popular with first-time homebuyers. However, FHA loans can also be a good option if you have experienced foreclosure or bankruptcy.

Another benefit of an FHA loan is access to loan relief. If during your loan term, you experience financial hardship from extenuating circumstances like loss of income, you may be able to adjust your payment amounts through the FHA Home Affordable Modification Program.

Veterans Affairs (VA) Loans

VA financing available to qualified military veterans with at least six months of active duty. This loan is also available to the unmarried spouses of a deceased veteran whose death was service related, or spouse of an MIA or POW.

How Do I Qualify for a VA Loan?

The requirements for a VA loan will depend on which branch of the military you served in and for how long. Active duty members generally have shorter service requirements than reserve members.

If you do not meet the minimum service requirements, you may still be eligible if you were discharged on certain grounds. For example, hardship, early out, medical conditions, and service-connected disability will allow you eligibility.

You will also need to apply for a Certificate of Eligibility (COE), as a part of the loan application process.

What Are The Benefits of VA Home Loans?

These types of loans allow VA to act as intermediaries between you and the mortgage lender. What this means is that the VA guarantees a portion of your mortgage to the lender, providing more security for you and the lender.

VA-backed mortgage loans also give you access to better terms and conditions. For instance, most of these loans can be obtained with no down payment. There’s a variety of VA plans available, so be sure to talk with an advisor or bank associate as you explore your options.

Tennessee Housing Development Association (THDA) Loans

First-time buyers, or those who have not owned a home within at least three years, may qualify for these lower-down-payment loans (financing is subject to the availability of state funding).

The loans from this homeownership program, like FHA loans, are intended for low and moderate-income borrowers. These mortgage plans offer fixed rates over a 30 year period in order to keep your costs down. The minimum credit score for these loans is 640. Additionally, there are limits on your maximum household income, but these limits depend on which county you live in.

If you decide to take advantage of a THDA loan, you will be required to pay some down payments. Also, you will need to either have proof of income or some savings. If your plan falls under a Great Choice, Great Choice Plus, or Homeownership for the Brave, you will need to enroll in a homebuyer education program.

USDA-Rural Development Loans

These loans are distributed by the Department of Agriculture in an effort to help rural families buy new homes or upgrade their current homes. It allows people who do not have easy access to mortgages to obtain financial assistance. However, if you plan to build a new home, you will have to purchase a construction loan.

With this program, financing is available for rural properties provided program guidelines are met. The rates are very competitive and you do not have to be a first time homebuyer. In order to qualify for a USDA Rural Development loan, you must take the mortgage out on your primary residence.

If you qualify for the minimum credit score, your payments will be 29% or less of your monthly income. Should you have a credit score above 680, the USDA may consider allowing you to have a debt ratio of 41% or more.

You must also have a steady income for at least two years, and a good credit score. If you have a credit score above 640, the process should be easier and faster. For more information about a Rural Development loan, please contact the F&M Bank near you.

*For all of the products listed (i.e., FHA, VA, THDA, and USDA Program) the interest rate and terms are subject to credit review and approval.

THDA'S Take Credit MCC Program

THDA.ORG -- TAKE CREDIT is a Mortgage Credit Certificate (MCC) program administered by Tennessee Housing Development Agency. The MCC Program was authorized by Congress in the 1984 Tax Reform Act. An MCC is not a loan. A MCC permits eligible homebuyers to take a federal tax credit up to $2,000 maximum per year based on the mortgage interest paid by the homebuyer. The tax credit may be used to lower a homebuyer’s income tax liability each year the home remains owner occupied by the certificate holder (the homebuyer).

Calculate Your Loan Payment

Wondering how much house you can afford? Try out our financial calculators to get an estimate of payments and much more!

Calculators

 
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