Home Loan Resources:
Mortgage lending experts since 1966
Homebuyers throughout northern Indiana and surrounding areas can find affordable financing through First Federal Savings Bank. First Federal is a locally owned bank specializing in mortgage lending and loan servicing, with six Indiana branch offices in Rochester, Winamac, Bremen, Plymouth, Elkhart, and Mishawaka.
- Home Loan Products
We have a wide range of mortgage products available for purchases or refinances. Here are some of the loans we offer.
Fixed Rate Mortgage
- This is the most popular type of home mortgage loan.
- Fixed interest rate for the life of the loan
- Fixed monthly payments for the life of the loan
- Purchase or Refinance
- Primary residences, second homes, investment properties
- Terms from 10 to 30 years
- Longer the term, the lower the monthly payment
- Shorter the term, the higher the payment, however, less interest is paid over the life of the loan and the equity will build quicker
- For the person with limited or fixed incomes
- If you plan to stay in your home a long time
Adjustable Rate Mortgage (ARM)
This type of loan saves you money in the early years with a lower interest rate.
- Interest rate adjusts periodically with movement in a pre-selected index
- Lower interest rate than a traditional fixed rate mortgage loan
- Purchase or Refinance
- Select from many ARM adjustment periods: 3/1, 5/1, 7/1, 10/1
- Primary residences, second homes, investment properties, Jumbos, and constructions
- Index – U.S. Treasury Securities – 1 Year T-Bill
- Margin – a fixed percentage that is added to the index at each adjustment period
- Rate Cap – the maximum amount the rate can increase or decrease per adjustment period and over the life of the loan
A borrower does not have to have perfect credit to qualify for an FHA mortgage. And, FHA has many options to help borrowers stay in their homes and avoid foreclosure.
- FHA loans require a low 3.50% down payment, and the source of the funds can come from a family member as a gift.
- Fixed interest rate for the life of the loan.
- No ARMs available.
- Purchase, Refinance, Cash-out Refinance, or Streamline Refinance available.
- Single-family, primary residence only, 1-unit properties, manufactured homes are eligible.
- Terms from 15 to 30 years
- Borrowers are not required to conform to external MI Company underwriting guidelines. FHA insures all qualified borrower mortgages.
If you need to borrow more than $417,000
- Select from many ARM programs
- Primary residences, second homes, and construction loans
- Purchase or Refinance
- No point cap on our Jumbo loans
Construction and Modular/Perm Mortgage Loan
One transaction for the entire process
- Convenience of one application, one closing
- Adjustable Rate Loans available
- Eight month interest only
- At end of construction, interest rate will be modified to current market rate not to exceed interest rate at time of loan closing
- Fixed Rate and Adjustable Rate Mortgages available
- Purchase, No Cash-out, and Cash-out Refinances available
- Up to 85% LTV
80/10/10 Mortgage Loan
Avoid the added expense of mortgage insurance while making a down payment as low as 10%, or a great alternative to the Jumbo Loan.
- 80% LTV first mortgage (3/1, 5/1, 7/1, or 10/1 ARM or Fixed Rate available)
- 10% second mortgage (15 year fixed rate)
- 5% down payment funds must come from borrower's own funds
- Owner occupied, 1-2 unit primary residence only
- Purchase or No Cash-out Refinance
Portfolio Mortgage Loans
Loans that do not meet Freddie Mac guidelines.
- Adjustable Rate Mortgages
- Purchase, Cash-out refinance, No Cash-out refinance
- Up to 95% LTV - Purchase Loans only
- Owner occupied primary or secondary residence
- Construction Loan, Modular Loan, Improvement Loan, and Investment Properties
Properties up to 4 units
- Adjustable Rate Mortgages
- Purchase and No Cash-out Refinances available
- Maximum of 4 investment properties with total dollar amount not to exceed $500,000
Purchase With Improvement Loan
One mortgage for the purchase price and funds to make the improvements for your ideal home.
- Adjustable Rate Mortgage
- Primary and Second Homes only
- Max LTV 95%
Home Improvement Loans
Perfect loan for those repairs that are needed, or that extra bedroom you have been dreaming of.
- Adjustable Rate Mortgages available
- Up to 80% LTV
- Owner occupied primary or secondary residences and investment properties
We can provide the financing for that special lot that will become the location of your dream home.
- Adjustable Rate Mortgage
- Up to 80% LTV
- Limited closing costs
Credit Builder Loan
This lending tool can help establish credit by providing a consumer with the proceeds of that loan being used as collateral in a depository account.
- 3-year maximum loan term
- Loan amounts from $1,000 to $3,000
- Collateral: Savings account. Withdrawals from the savings account will not be allowed until the loan is paid off.
- Upon completion of the loan payments the borrower will have established credit and have a savings account.
The USDA Loan is available to eligible borrowers on homes in USDA eligible communities.
- No money down, with a loan amount up to 100% of the appraised value on the purchase of a new home.
- Refinance – Is the Time Right for You?
When you refinance, you are paying off your existing mortgage and replacing it with a new mortgage loan. Many homeowners consider refinancing the minute the interest rates suddenly fall. A standard rule of thumb for refinancing is if the interest rate is at least 1/2% to 5/8% lower than your current interest rate.
Here are some options for refinancing:
- Lower the interest rate or extend the repayment period
The result will be lower monthly payments. This option should be chosen if you plan on staying in your home for more than 5 years.
- Switch from an Adjustable Rate loan to a Fixed Rate loan
Convert your Adjustable Rate Mortgage into a Fixed Rate mortgage and give yourself a stable mortgage payment at a low interest rate.
- Draw on the equity in your home by doing a Cash-out Refinance
Use your cash-out to consolidate debt, or get rid of some high interest rate debt.
- Shorten the term of your loan
It's possible you could save thousands of dollars by shortening the term of your mortgage while maintaining about the same mortgage payment amount.
- Take advantage of a lower interest rate for an Adjustable Rate Loan
Watch the ARM programs for new rates and terms. It may be beneficial to refinance to a different ARM program for a lower rate.
Check our selection of Loan Products today to help you choose a loan program that answers your individual needs. Start the process now by contacting one of our Loan Originators or by calling or visiting any of our Branch Offices.
- Lower the interest rate or extend the repayment period
- Home Equity Loans
This loan is the homeowner's access to ready cash. It is the smart, flexible way to get the most out of your home. You don't have to go through an application process every time you need a loan. You can "write your own loan" based on the equity in your home. With a First Federal Savings Bank Home Equity Loan, there is one application and one approval for a continuous line of credit.
- Use your credit anytime – convenient access using your Home Equity Loan checking account
- Borrow up to 90% of the property value
- Money may be used for any purpose
- Monthly billing statement
- You will be billed monthly for interest only payments during the first 10-year term called the "Draw Period". During the second 10-year term, called the "Repayment Period", your minimum payment will be the accrued interest plus 1% of the principal balance outstanding on the last day of the Draw Period. Our originators can provide more information regarding our rate and term specifics.
- You may pay on your principal balance anytime
- Rate: Prime + 2.00% with a floor rate set at 6.00%
- Interest may be tax deductible. Consult your tax advisor for details.
- The Mortgage Loan Process
What should you expect when you are ready to buy a home? The following steps will give you a general idea of what will happen throughout the process. Your loan originator will be able to answer any specific questions you may have concerning your loan.
How much of a house can I afford?
Schedule an appointment with your First Federal Savings Bank loan originator. He or she will be able to give you an idea of your price range, based on your credit report and information you provide. This pre-qualification letter is based on unverified information, which you can take and give to your realtor.
I've found the perfect house. What happens next?
Once your seller accepts your offer, take the signed offer to purchase to your loan originator. You will be given a Good Faith Estimate, which contains the terms of the loan being offered. It is good for 10 business days, or, you can go ahead and start the application process. You may also lock-in the interest rate at this time, which will be good until commitment. There is a fee to lock-in the rate. If interest rates fall by the time of the commitment, you will receive the lower rate for your type of loan.
What do I need to bring to the application?
You will greatly help get the process started in a timely manner if you come prepared.
- Bring your last two pay stubs
- Your two most recent bank statements
- Your last two W-2s.
You will also pay an application fee at this time.
Additional information will be needed
Because the property is security for the loan, the lender will have an appraisal made of the property, and you will need to have the following information available:
- A copy of the purchase contract, including any addendums, signed by all parties, showing the full names of the sellers and buyers as they will appear on the new deed
- The amount of earnest money deposited and who is responsible for closing costs, etc.
- If the house is to be built, or is still under construction, a set of plans and specifications
- The complete mailing address of the property, its age and its full legal description
- Name, address and phone number of the realtor and/or the seller of the property who will help the appraiser in obtaining access to the property
- Social Security numbers of you and your co-borrower, age, years of completed education, marital status, number and ages of dependents, and your current address and phone number
- If you have lived at your current address less than 2 years, be prepared to have your former addresses for up to 7 years.
- Detail your current housing expenses, including rent or mortgage payments, real estate taxes and insurance
- Name and address of your landlord(s) or mortgage lender(s) for the past two years
Employment history and sources of income:
- At least two years employment history with employer's name and address, your job title or position, length of time on the job, salary, bonuses, commissions and average overtime pay
- If you are self-employed, full tax returns and financial statements for two years, plus a profit and loss statement for the current year to date
- A written explanation if there are gaps in your employment record due to circumstances such as illness, layoffs, or for any other reason
- If you rely on income from other sources, such as rental property, social security or disability payments, or child support, you must provide adequate proof of the source. Appropriate documents could include cancelled checks, copies of leases, certification of benefits, divorce decrees, personal taxes, and similar evidence.
- All bank accounts with the name and address of the institution, name(s) on the accounts, account numbers and current account balances
- Last two bank statements
- Current market value of stocks, bonds, CDs and other investments
- Vested interest in all retirement funds
- Face amount and cash value of all real estate owned, along with the amount of rents collected, the mortgage on the property and the monthly mortgage payments (a profit and loss statement will be required for investment properties)
- An itemized list of current bills, loans and other debts, such as automobile loans and credit cards, including current balances and monthly payments. Include the account or loan number, the monthly payment, the number of payments remaining and the outstanding balance.
- If you have been through bankruptcy or foreclosure proceedings within the past seven years, be prepared to give full details and copies of applicable documents regarding them.
After the loan application, what happens next?
Your completed loan application will be given to the underwriter in the loan processing department. Loan processors send out the Verifications of Employment and Deposit and order the credit report, property appraisal and other documents.
Within three business days after completing the application, we will provide you with a Good Faith Estimate of the anticipated closing costs. It will show costs associated with the loan settlement, such as mortgage insurance, title insurance, escrow reserves and hazard insurance.
Within the same three days, you will also receive the Truth-In-Lending Disclosure statement, which shows the estimated monthly payment. The total cost of all finance charges is also shown, stated as an Annual Percentage Rate. The APR represents the dollar amount of finance charges you pay either up front or over the life of the loan, converted to an annual interest rate. Since the APR includes fees and other charges as well as interest on the mortgage loan, the APR is usually higher than the interest rate on the loan.
The loan approval process
The decision to approve your loan is based on your ability to repay it, your credit history, your qualification for the loan program, your available savings, and the property itself.
What if my loan is declined?
We are required to explain the denial decision in writing. Common reasons for loan denial include the following:
- Insufficient funds. If you don't have enough money to cover the down payment and closing costs, you might still be able to qualify for certain loan programs if you can get a gift from family, friends, an employer or a grant.
- Insufficient income.
- Too much debt. Loans are approved based on debt-to-income ratios. There may be a problem if your debit-to-income ratio is in excess of 40%.
- Poor credit report. If you are denied credit, you are entitled to a free credit report from one of the three credit bureaus: TransUnion, Equifax or Experian. Review it carefully and be sure to dispute any inaccuracies with the credit bureaus. Ideally, you should do this before applying for your loan. A credit score of at least 680 is a general guideline for a conventional loan. If your credit is poor, it is important to begin paying your debts off as soon as possible to build a stronger credit history.
- Low appraisal. If the appraisal comes back lower than expected, you have a few options. You can put down a larger down payment so that the loan is only for the appraised value of the property. Or, you might renegotiate with the seller (if permitted by your sales contact) for a lower purchase price.
If you are denied for the loan, it may be possible that a different type of mortgage loan program through First Federal Savings Bank would fit your needs better than the one for which you applied. Be sure to consult with your loan originator concerning other possible options
After loan approval
After the loan has been approved, you will receive a commitment letter which sets out the terms of the loan and the length of time for which those terms are offered. If the loan does not close within the specified commitment period, the terms are subject to change. You usually must accept the commitment by returning a signed copy to the lender within five to ten days.
Your originator will schedule a closing date.
What will happen at the closing?
At the closing, you will sign several documents, including the following:
- HUD-a Settlement Statement – It itemizes the services and charges to you and the seller
- Truth in Lending Statement – It discloses the annual percentage rate, terms of the loan, the amount financed, and the total payments
- The Note – It binds you to pay the lender according to the terms of the loan and details the penalties if you default on the loan
- Mortgage – It secures the note and gives the lender a legal claim to your home if you default
After you and the seller have signed all the paperwork and you have paid your down payment and closing costs (minus any earnest funds that you deposited) with a certified or cashier's check, the Warranty Deed and Mortgage will be recorded. Within one or two days, the property will be legally transferred to you.
- Houses for Sale
The properties listed below are bank owned properties. First Federal Savings Bank does not warrant the condition of these properties, and will not be held responsible for any repairs. Please contact the realtor who has the property listed for more information. You may always contact First Federal Savings Bank for financing one of these homes, as we offer many different financing options.
Property Address Realtor Realtor Phone Notes 5783 N. Lakeshore Dr., Macy IN Susan Morris 574-298-8652 1235 S. Zimmer Rd., Warsaw, IN Elaine Albertson 574-551-2127
- Home Loan Resources
To find a HUD-approved counselor near you, you may visit either one of these websites:
Please know that no lender, or party associated with or acting on behalf of the lender, may contact a counseling agency on a borrower's behalf. The borrower must contact a counseling agency directly and personally to initiate the counseling process and schedule an appointment. Note: Whenever a borrower calls to schedule an appointment, the counselor must mail, fax, or email HUD's required handouts to the borrower.
A lender may not contact a counselor or counseling agency to:
- Discuss a borrower’s personal information, including the timing or scheduling of the counseling;
- Request information regarding the topics covered in a counseling session, or
- Check on the progress of the counseling session.
Similarly, counselors and counseling agencies may not discuss any of these topics with a lender.
To view current interest rates on mortgage loan products, click here.
To sign up for Rate Watch, click here.
Online Mortgage Application
When you are ready to apply for a home loan, you can contact one of our Loan Originators near you, or you can apply online. After you fill out your application online, one of our originators will be in contact shortly.
When you make an appointment to apply for a home loan, you will help speed up the loan processing time if you have your information ready. For a printable borrower's checklist, click here.
Be prepared at application time and speed up the loan processing time.
- List of all previous addresses for the past 2 years
- Social Security Number(s)
- Divorce decree, if applicable
- W-2 forms for the previous 2 years
- Employment information for the previous two years, including name, address and phone number
- Copy of most recent pay stub(s) for one month
- Award letter for Social Security, and 1099 for disability income
- If rental income, commission, interest, or income other than salary, tax returns may be required
- If child support/alimony, a court printout showing 12 months history
- If self-employed, a signed, completed tax return for the past 2 years, including personal, partnership and corporate if applicable and all schedules. Also, a business profit and loss statement year-to-date for current year if more than three months have passed since the end of the tax year
- Copy of bank statements for the previous 2 months, including savings, checking and investment accounts
- Stock and securities account statements for the previous 2 months
- HUD settlement statement if using funds from the sale of property for down payment
- List of other assets including life insurance, retirement funds, automobiles, etc.
- List of all open credit accounts, i.e. charge accounts, open loans, including outstanding liens, rental income, mortgage payment, etc.
- Signed purchase agreement, including legal description
- If new construction – year land/lot acquired, original cost of land/lot, amount owed on land/lot, and a signed contract
- If refinance – year property acquired, original cost of home, cost of improvements, amount owed on property, and description of improvements
An application deposit will be requested at time of application. This non-refundable deposit will be applied toward closing costs.
Why should you sign up for the Carefree Plan? It's free!
If you have applied for or currently have a mortgage loan with us, your payments can be made automatically each month from your First Federal Savings Bank checking or savings account, or you can authorize us to electronically withdraw your mortgage payment each month from an account at your current (non First Federal) checking or savings account.
Sign the Authorization Form and return it with a voided blank check to one of our Branch Locations, or fax it to 574-223-8462. The authorization must be received by the 17th of the month. Continue to make your payment until you receive notification from us that you have been set up for the Auto pay. Call 800-422-3372 and ask for the Loan Servicing Department if you have further questions.
This authorization may be cancelled at any time by sending written notification to First Federal Savings Bank by the 17th of the month. First Federal Savings Bank reserves the right to cancel this agreement at any time for any reason.
Adjustable Rate Mortgage (ARM)
A mortgage in which the interest rate changes periodically during the life of the loan according to the movement of a pre-selected index.
An opinion or estimate by a qualified person of the property value.
A timetable for payment of a mortgage showing the amount of each payment applied to interest and principal and the remaining balance. Amortization period is the time period of time over which a calculated mortgage payment will fully repay a set loan amount at a specific interest rate.
Annual Percentage Rate (APR)
The total yearly cost of a mortgage stated as a percentage of the loan amount. It is higher than the interest rate because it includes interest, fees, points, and mortgage insurance. The APR gives you a tool to compare various kinds of mortgages with different lending institutions.
A mortgage that has a fixed rate, level monthly payments that amortizes over a certain term, with the unpaid balance due as a lump sum on the balloon maturity date
A provision of an ARM limiting how much the interest rate or mortgage payments may increase.
A loan transaction in which the borrower receives funds at the time of closing
The occasion where a sale is finalized; the buyer signs the mortgage and notes, closing costs are paid, and the funds are disbursed to complete the sale and loan transaction
A loan that does not allow for additional extensions of credit as the principal balance is repaid and whose term has a stated maturity date.
Expenses incurred in the closing of a mortgage loan, whether it be a purchase or a refinance. The costs usually include items such as: origination fees, discount fees, appraisal, credit report, and prepaid items such as t axes and insurance.
A formal offer by a lender stating the terms under which it agrees to loan money to a homebuyer.
Any mortgage that is not insured or guaranteed by the federal government.
An adjustable rate mortgage that can be converted to a fixed rate mortgage under special conditions.
A report of an individual's credit history prepared by a Credit Bureau and used by a lender in the loan approval process.
A calculation of total monthly obligations to total monthly income used to determine the maximum financing terms which should be extended.
A document by which the ownership of real property is transferred from one party to another
The failure to make mortgage payments on a timely basis or to comply with other conditions of a mortgage.
A loan in which a payment is overdue but not yet in default.
A one-time charge assessed at closing to decrease the interest rate. One point is equal to ¼ percent of the loan amount.
The portion of the purchase price which the buyer pays in cash and does not finance with the mortgage; this is the difference between the sales price and the amount of the mortgage.
The difference between t he market value of a property and the homeowner's outstanding liens.
An account which has been created specifically to hold a portion of an applicant's mortgage payment for the subsequent payment of real estate taxes, hazard insurance, PMI insurance, and special assessments
Federal Home Loan Mortgage Corporations
FHLMC (Freddie Mac) – Freddie Mac is a shareholder-owned corporation that creates a continuous flow of funds to mortgage lenders by purchasing mortgages from lenders and packaging them into securities that are sold to investors.
A real estate mortgage that has first claim over any subsequently recorded mortgages
Fixed Interest Rate
An interest rate that does not change during the loan term.
A mortgage in which the interest rate and payments remain the same for the life of the loan.
The process by which a mortgaged property may be sold when a mortgage is in default.
Flood Hazard Area
An area in a community which has been designated by the Director of the Federal Emergency Management Agency (FEMA) as having a high degree of risk for becoming damaged by flooding at any given time.
Good Faith Estimate
A disclosure at application time which provides a breakdown of the estimated closing costs.
Gross Monthly Income
The total amount you earn each month, prior to any deductions.
An insurance policy that covers any physical damage to your property, such as fire, wind, hail, and other natural disasters.
Home Equity Line of Credit (HELOC)
A real estate loan that provides a revolving line of credit based on the equity available in your home.
A regularly published rate that is used with the margin to establish interest rates charged on Adjustable Rate Mortgages.
Property owned that is used for supplementing income and not intended for owner occupancy.
A manner in which real property may be titled. It means that two or more persons hold the same interest in the property and upon the death of one of the joint tenants, the interest of the deceased person passes to the survivor(s) and the entire parcel of land is then owned solely by the surviving joint tenant(s).
A charge when a scheduled payment is received later than its due date and any allowed grace period.
Loan to Value Ratio
The amount of the proposed loan versus t he appraised value of the subject property, expressed as a percentage.
The number of days during which a lender guarantees a borrower a specific interest rate and terms on a mortgage.
A fixed percentage that is added to the index at each adjustment period to determine the interest rate for an ARM.
A legal document that pledges a property to the lender as a security for payment of a debt.
See Private Mortgage Insurance.
A written promise to pay a sum of money at a stated interest rate during a specified term. The note contains a description of the conditions under which the loan is to be repaid and when it is due.
A loan that does not conform to the traditional Freddie Mac or Fannie Mae requirements.
The amount charged for services performed by the company handling the initial application and processing of the loan.
See Discount Points
A fee charged to a borrower who pays off a loan before the maturity date.
A residence which the borrower intends to occupy as the principal residence.
This indicates the loan amount you may qualify for before the proposed new home is found. This prequalification is issued using non-verified information. Final rate and commitment issued only after final underwriting has been completed.
Items that must be paid for at the time of closing; most common are: interim interest, taxes, first year premium for required insurance, and fees applicable to certain loan products.
Private Mortgage Insurance
Insurance provided by non-government insurers that protects lenders against loss if a borrower defaults.
Real Estate Settlement Procedures Act (RESPA)
A federal law requiring lenders to provide home mortgage borrowers with information on known or estimated settlement costs. It also establishes guidelines for escrow account balances.
The borrower replaces a debt from proceeds of a new loan using the same property for security for the purpose of getting a better interest rate, loan term, or to get cash out.
A mortgage on the same property, that is in a second position (or subordinate to) the original first mortgage.
A loan sale in which the original lender's servicing department continues to service the loan after the sale to a secondary institution, such as Freddie Mac or Fannie Mae.
See Closing Costs.
The contribution by the applicant to the construction or improvement of a property in the form of labor or services rather than cash.
A legal document establishing the right of ownership.
A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the APR and other changes.