First Federal Community Bank’s Senior Vice President Brad Meyer offers tips when homeowners consider home improvement loans and what the homeowner can expect if they are approved.
“I always tell them to bring in their income information and ensure we have a general understanding of their assets and liabilities, so we can fill out the application accordingly,” Meyer said. “When going through the application process, it’s pretty self explanatory. We basically ask for your current cash balances, any real estate you own, etc.”
First, Meyer said, they will determine the purpose behind the loan.
“That would be the first process,” Meyer said. “They would define it as home improvement, home equity or purchase. After we determine that, then we do the application process.”
Meyer said First Federal encourages borrowers to explain a credit issue. He said if a borrower has a “not-so-well” credit, First Federal will consider the borrowers reason behind the credit.
“We’re a community bank,” Meyer said. “We’re here to support our community, we’re not your typical secondary market lender.”
Meyer said First Federal’s mortgage loan officers will sit down with the potential borrower and go through the application process and obtain supporting documents — financial information such as tax returns, pay stubs, a bank statement.
“We need to document their current financial condition,” Meyer said. “When you are doing a home improvement loan, we’ll need cost projections so we can determine if they are within the standards or not.”
Terms offered at First Federal Community Bank includes a 5/5 Adjustable Rate Mortgage, 15 year fully amortized mortgage and a 15/1 mortgage amortized rate.
Meyer said the 15/1 mortgage amortized rate is amortized over what the borrower prefers, with a maximum amortization of 30 years.
“The 5/5, your interest rate will be fixed for five years, and then it will adjust after five year, and then it will be fixed for another five year period,” Meyer said. “Basically every fifth year, your interest rate is going to adjust.”
Meyer explained the 15/1 mortgage amortized rate has a similar concept.
“The 15/1 adjusts after the 15 year period,” Meyer said. “You have a 15 year fixed rate mortgage, and after the 15 years, every year there after it adjusts.”
Meyer said interest rates can fluctuate, depending on the mortgage market.
“Your interest rate can go up or down in that scenario,” Meyer said, “just depends on what rates have done in the mortgage market. It depends on what rate environment we’re in.”
First Federal Community Bank has two branches in Paris, 3010 N.E. Loop 286, 903-669-0600, and 630 Clarksville St., 903-784-0881.