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Conventional Fixed Rate Mortgages
With a conventional fixed rate mortgage a contract is entered into between the borrower and the lender. The borrower's property is pledged as collateral for the loan, which means the lender may take your home should you fail to make payments in a timely manner. This type of mortgage is not guaranteed by any type of government loan program.
First Bank offers 15, 20, 25, and 30 year conventional fixed rate mortgages that are underwritten by Fannie Mae. Once we have received your completed mortgage loan application, credit history, and verifications of deposits and employment, we must turn them over to the underwriter for approval.
With a conventional fixed rate mortgage the interest rate remains the same for as long as you hold your mortgage. With this type of loan, your monthly payment remains the same for the term of the loan.
The normal down payment with a conventional fixed rate mortgage is 20%. Under certain conditions conventional fixed rate financing can be obtained with as little as 5% down payment if the loan is insured with private mortgage insurance (PMI).
Adjustable Rate Mortgages
First Bank offers adjustable rate mortgage loans to finance new homes also. Adjustable rate mortgage loans are an especially good option when conventional fixed rate mortgages are high, for those individuals that know their income will be rising in the future, and those individuals that know they will only own their home for a few years. With this type of financing the home is pledged as collateral for the loan and the loan is not guaranteed by the government.
The interest rate on an ARM may vary up or down depending upon changes in the market. The interest rate can generally only change on the annual anniversary date of the loan and the new rate is tied to the one year Treasury Bill rate plus 2.75%. The ARM loan generally offers a lower interest rate for the first year called a teaser rate. The one year teaser rate is a discount the lender is willing to give the buyer to entice them into accepting some of the interest rate risk of the loan. The interest rate on a First Bank ARM cannot go up or down more than two percent in any one year and no more than six percent over the life of the loan.
Balloon Mortgages
Balloon mortgages are a cross between conventional fixed rate mortgages with the interest rate fixed for the term of the loan and adjustable rate mortgages that have the interest rate fluctuate every year. With balloon mortgages the interest rate is fixed for a short period of time, such as 3, 5, or 7 years, but the monthly payment is based on a 15, 20 or 25 year payback. This type of mortgage has a lower fixed monthly payment with a larger final payment. At the end of the loan term the borrower and lender can renegotiate the interest rate to current market rates or the borrower may move the loan to another lender.
With this type of financing the home is pledged as collateral for the loan and the loan is not guaranteed by the government.
Rural Development Loan Program
First Bank participates in the U.S. Department of Agriculture's guaranteed home loan program. Under this program, the Federal Government agrees to guarantee a loan and the lender agrees to accept a smaller down payment at the origination date of the loan.
To be eligible for this type of loan an eligible person must meet the following criteria:
- Must have an adequate and dependable income.
- Must be a U.S. citizen or be legally admitted to the United States for permanent residence.
- Must have an adjusted annual family income that does not exceed 115 percent of the median income for the area.
- Must have a credit history that indicates a reasonable willingness to meet obligations as they become due.
- Must have the repayment ability based upon a total mortgage payment (payment, taxes, and insurance) to gross monthly income ratio less than 29% and total debt payments divided by gross monthly income cannot exceed 41%.
First Time Home Buyers Program
First Bank participates in the Illinois Housing Development - First Time Home Buyers Program. This program defines a first time home buyer as an individual that has not owned a home during the past 3 years. Participation in this program is restricted by family income and the purchase price of the home. Participation in this requires a minimum downpayment of 5% with PMI insurance.
To speak with a Types of Mortgages Available at First Bank representative,
contact Andrea Hays at (618) 382-4118 or
 customer-service@surffirst.com.
 Mortgage Calculator - Use our mortgage calculator to compare and save by computing your monthly payment. Please Note - The calculated amount is an approximate value and may differ from the bank's final calculation.
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