- Meet Your Lenders
- Get Pre-Approved
- The Home Buying Process
- Mortgage Terms
Farmers & Merchants State bank services most of the loans we do. This means that you will always make your mortgage payments and deal directly with Farmers & Merchants for the life of the loan! We truly want to be your partner for life.
Some lenders, after closing, sell the servicing of your mortgage to a distant company and you deal with them directly when questions, problems, or issues arise! Have you ever called an 800 number and wanted to speak with a real person?
Jim SchaeferMy name is Jim Schaefer, I have been with Farmers & Merchants State bank since 2003. My mission is to provide you with exceptional service and value. I also have a wonderful support staff which allows me to keep you, the customer, my top priority. Whether you are buying, building, or refinancing I want to be your partner through the entire process.
Deb EgliMy name is Deb Egli, I joined Farmers & Merchants team in October of 2006, but have been in banking since 1988. I am a full relationship banker, from checking accounts to mortgage loans. I believe in exceptional customer service and would like to work with you, whether it is to help you realize your dream or to refinance your current home.
Personal Banker/Mortgage Lender
My name is Brad Chadwick, I am the newest member to the Farmers & Merchants mortgage lending team, but don’t let that fool you. I have been in the lending field for the past six years. I am looking forward to helping you with your mortgage and all of your personal banking needs.
Personal Banker & Mortgage Lender
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Pre-Approval is very simple and is the first and most important step in the home buying process! We will qualify you for a loan amount based on your income, debts, and down payment, if any. The type of loan and closing costs will depend on; your credit history, amount of down payment, and the type of home. There are many loan options and payment options available, we can help you choose one that is a good fit for your lifestyle, but ultimately you make the decision about what you are comfortable with.
Here is what you will need; prior two years W2's and a recent pay-stub from your employer showing year to date income. If you are self-employed please have prior two years complete tax returns.
Please contact one of our mortgage lenders to schedule an appointment at your convenience.
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Home Equity Loans
Home Equity Lines of Credit (HELOCS)
Loans for second homes
The first step is to determine how much you can spend. We will qualify you for a loan amount based on your income, debts, and down payment, if any. In order to do this you will need to provide the following information; Prior 2 Years W2s, (if self-employed, prior 2 years tax-returns), and pay stubs documenting 1 full month of earnings. The type of loan and closing costs will depend on; your credit history, amount of down payment, and the type of home. There are many loan options and payment options available, we can help you choose one that is a good fit for your lifestyle, but ultimately you make the decision about what you are comfortable with. Any home purchase will have upfront "out of pocket" expenses. These costs may total as much as $1,750 for: earnest money deposit, home inspection (if you choose to have one), and your home owner's insurance coverage.
A good place to start looking is with a realtor. Did you know that the realtor's services are at no cost to you as a buyer! Your realtor will schedule showings with the sellers and handle most of the paperwork for you. When you find a home your realtor will submit an Offer To Purchase to the seller. The seller will either; accept the offer, or counter-offer. If accepted, you may be required to put down an earnest money deposit (approx. $1,000 which is credited towards the purchase price at closing) and a closing date is usually set for approximately 30 days later to allow time for the rest of the process. During this time you may choose to have a home inspection. Though it is not required, they are a good idea. For a fee, a home inspector will walk through the home with you and do an overall check of the condition. The inspection could save you from buying a house that is in need of major repairs.
Now that you have an accepted offer and the home has passed inspection, your lender will proceed with the mortgage approval. This may include additional verifications, an appraisal of the home, and title insurance. Your lender and realtor will take care of everything except for obtaining homeowners insurance. You are required to obtain Homeowners Insurance for your new home by the closing date and are required to have coverage throughout the life of the loan. You will also be responsible for paying the yearly property tax.
This where all of the final documentation is signed to change ownership from the seller to you the buyer as well as your loan documents. This event usually occurs at a title company.
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Your home purchase transaction will have different types on insurance.
Homeowners Insurance (required): A policy that protects you and the lender in the event of fire or flood which damages the structure of the house; a liability, such as an injury to a visitor to your home; or damage to your personal property.
Title Insurance (required): Insurance that protects lenders and homeowners against loss of their interest in the property because of legal problems with the title. Paid at closing.
Private Mortgage Insurance (may apply): Needed for mortgages with low down payments (usually less than 20% of the price of the home). Paid monthly with your mortgage Credit Life and Disability Insurance (optional): Policy which helps borrower(s) repay mortgage if disabled and unable to work or passes away. Paid monthly.
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Adjustable-Rate Mortgage (ARM): Also known as a variable-rate loan, usually offers a lower initial rate than fixed-rate loans. The interest rate can change at specified time periods based on changes in an interest rate index that reflects current finance market conditions. The ARM promissory note states maximum and minimum rates. When the interest rate on an ARM increases, the monthly payments will increase and when the interest rate on an ARM decreases, the monthly payments will be lower.
Amortization: A term used to describe the process of paying off a loan over a predetermined period of time at a specific interest rate. The amortization of a loan includes payment of interest and a portion of the outstanding principal balance during each payment cycle.
Annual Percentage Rate (APR): The cost of credit expressed as a yearly rate. The APR includes the interest rate, points, broker fees and certain other credit charges that the borrower is required to pay.
Appraisal: A professional analysis, including references to sales of comparable properties, used to estimate the value of the property.
Appraiser: A professional who conducts an analysis of the property, including references to sales of comparable properties in order to develop an estimate of the value of the property. The appraiser's report is called an "appraisal."
Assets: Everything of value an individual owns.
Balloon Mortgage: A mortgage with monthly payments based on a 30-year amortization schedule and the unpaid principal balance due in a lump sum payment at the end of a specific period (usually 5 or 7 years) earlier than 30 years. The mortgage contains an option to reset the interest rate to the current market rate and to extend the maturity date provided certain conditions are satisfied.
Bankruptcy: Legally declared unable to pay your debts as they become due. Bankruptcy can severely impact your ability to borrow money. Talk to a credit counselor as soon as you realize you are having problems paying your bills on time to try to prevent bankruptcy.
Capacity: Your ability to make your mortgage payments on time. This depends on your income and income stability, your assets and reserves, and the amount of your income each month that is available after you have paid for your housing costs, debts and other obligations.
Closing: When the real estate transaction between buyer and seller is completed. The buyer signs the mortgage documents and the closing costs are paid.
Closing Costs: The costs involved with the real estate transaction. These costs are in addition to the price of the home and are paid at closing. They include points, taxes, title insurance, financing costs and items that must be prepaid or escrowed and other costs. Ask a lender or real estate professional for a complete list of closing cost items.
Collateral: Property which is pledged as security for a debt. In the case of a mortgage, the collateral would be the land, the house, and other buildings and improvements.
Commitment Letter: A letter from your lender that states the amount of the mortgage, the number of years to repay the mortgage (the term), the interest rate, the loan origination fee, the annual percentage rate and the monthly charges
Counter-offer: An offer made in return by the person who rejects the previous offer.
Credit: The ability of a person to borrow money, or obtain goods with payments over time, as a consequence of the favorable opinion held by a lender as to the person's financial situation and reliability.
Credit Bureau: A company that gathers information on consumers who use credit and sells that information in the form of a credit report to credit lenders.
Credit History: A record of credit use. It is comprised of a list of individual consumer debts and an indication as to whether or not these debts were paid back in a timely fashion or "as agreed." Credit institutions have developed a complex recording system of documenting your credit history. This is called a credit report.
Credit Report: A document used by the credit industry to examine an individual's use of credit. It provides information on money that individuals have borrowed from credit institutions and a history of payments.
Credit Score: A computer-generated number that summarizes an individual's credit profile and predicts the likelihood that a borrower will repay future obligations.
Debt: A sum of money owed from one person or institution to another person or institution.
Debt-to-Income Ratio: The percentage of gross monthly income that goes toward paying for your monthly housing expense, installment debts, alimony, child support, car payments, and payments on revolving or open-ended accounts such as credit cards.
Deed: The legal documents conveying title to a property.
Down Payment: A portion of the price of a home, usually between 3-20%, not borrowed and paid up front.
Earnest Money Deposit: The deposit you make to show that you are committed to buying the home. The deposit will not be refunded to you after the seller accepts your offer, unless one of the sales contract contingencies is not satisfied.
Equity: The value in your home above the total amount of the liens against your home.
Escrow: The holding of money or documents by a neutral third party prior to closing. It can also be an account held by the lender into which a homeowner pays money for taxes and insurance.
Fixed-Rate Mortgage: A mortgage with an interest rate that does not change during the entire term of the loan.
Good-Faith Estimate: A written statement itemizing the approximate costs and fees for the mortgage.
Gross Monthly Income: The income you earn in a month before taxes and other deductions. Under certain circumstances, it may also include rental income, self-employed income, income from alimony, child support, public assistance payments, and retirement benefits.
Home Inspection: A professional inspection of a home to review the condition of the property. The inspection should include an evaluation of the plumbing, heating and cooling systems, roof, wiring, foundation and pest infestation.
Homeowner's Insurance: A policy that protects you and the lender from fire or flood, which damages the structure of the house; a liability, such as an injury to a visitor to your home; or damage to your personal property, such as your furniture, clothes or appliances.
Housing Expense Ratio: The percentage of your gross monthly income that goes toward paying for your housing expenses.
HUD-1 settlement statement: A final listing of the costs of the mortgage transaction. It provides the sales price, and down payment, as well as the total settlement costs required from the buyer and seller.
Interest: The cost you pay to borrow money. It is the payment you make to a lender for the money it has lent to you. Interest is usually expressed as a percentage of the amount borrowed.
Liabilities: Your debts and other monetary obligations.
Lien: A claim or charge on property for payment of some debt. With respect to a mortgage, it is the right of the lender to take the title to your property if you do not make the payments due on the mortgage.
Loan Origination Fees: The fee paid to your mortgage lender for processing the mortgage application. This fee is usually in the form of points. One point equals 1% of the mortgage amount.
Lock-in rate: A written agreement guaranteeing a specific interest rate when your mortgage closes.
Margin: The amount (expressed as a percentage) added to the index for an ARM to establish the interest rate on each adjustment date.
Market Value: The current value of your home based on what a willing purchaser would pay. The value determined by an appraisal is sometimes used to determine market value.
Mortgage: A loan secured by a lien on your home. In some states the term mortgage is also used to describe the document you sign to show that you have granted the lender a lien on your home; other states use a deed of trust document instead of a mortgage. It may also be used to indicate the amount of money you borrow, with interest, to purchase your house. The amount of your mortgage is usually the purchase price of the home minus your down payment.
Mortgage Insurance: Insurance needed for mortgages with low down payments (usually less than 20% of the price of the home).
Mortgage Lender: The lender providing funds for a mortgage. Lenders also manage the credit and financial information review, the property and the loan application process through closing.
Mortgage Rate: The cost or the interest rate you pay to borrow the money to buy your house.
Offer To Purchase: A formal bid from the homebuyer to the home seller to purchase a home.
Open House: When the seller's real estate agent opens the seller's house to the public. You do not need a real estate agent to attend an open house.
Points: Fee paid upfront to decrease interest rate of the mortgage loan. For example, if a loan is made for $50,000, one point equals $500.
Pre-approval Letter: A letter from a mortgage lender indicating that you qualify for a mortgage of a specific amount. It also shows a home seller that you are a serious buyer.
Pre-qualification letter: A letter from a mortgage lender that states that you are pre-qualified to buy a home but does not commit the lender to a particular mortgage amount.
Principal: The amount of money borrowed to buy your house or the amount of the loan that has not yet been paid back to the lender. This does not include the interest you will pay to borrow that money. The principal balance (sometimes called the outstanding or unpaid principal balance) is the amount owed on the loan at any given time. It is the original loan amount minus the total repayments of principal you have made to date.
Private Mortgage Insurance: see Mortgage Insurance
Rate Cap: The limit on the amount that the interest rate on an ARM can increase or decrease during any one adjustment period.
Real Estate Professional: An individual who provides services in buying and selling homes. The real estate professional is paid a percentage of the home sale price by the seller. Unless you have specifically contracted with a buyer's agent, the real estate professional represents the interest of the property seller. Real estate professionals may be able to refer you to local lenders or mortgage brokers, but are generally not involved in the lending process.
Refinance: Obtaining a new mortgage with all or some portion of the proceeds used to pay off the original mortgage.
Title: The right to, and the ownership of, land by the owner. Title is sometimes used to mean the evidence or proof of ownership of land; although another term used for that is "deed."
Title Insurance: Insurance that protects lenders and homeowners against loss of their interest in the property because of legal problems with the title.
Underwriting: The process a lender uses to determine loan approval. It involves evaluating the property and the borrower's credit and ability to pay the mortgage.
Uniform Residential Loan Application: A standard mortgage application that your lender will ask you to complete. The form request your income, assets, liabilities and a description of the property you plan to buy, among other things.
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Are there any upfront "out of pocket" expenses when purchasing a home? Yes. You will most likely need an earnest money deposit once you have an accepted offer to purchase. Typically ranges from $500 to $1,000 (credited back to you at closing).
A home inspection, if you choose to have one, usually between $275 and $400. And also one year of homeowners insurance coverage, typically ranging from $300 to $600 depending on the value of the home and coverage.
How long does it take to get pre-approved? Minutes.
What do I need to get pre-approved? A recent paystub showing year to date income and last years W2. If you are self-employed I will need prior two years complete tax returns.
I do not have perfect credit, is it possible to buy a home? Yes. You may be able to purchase a home, you credit is only part of the evauation.
I do not have any down payment, are there options available? Yes. There are financing options for little and no payment. Down payment can also come from a personal loan, secured by personal property, such as a vehicle. Or, in some instances be a gift from a family member!
Does Farmers & Merchants service loans? We service all the loans we do except WHEDA.
Feel free to contact one of our mortgage lenders for more details.
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