A GUIDE TO
PURCHASING YOUR FIRST HOME
Before you start looking for a potential dream home, FMB recommends you research and become knowledgeable
about your possible mortgage options.
Good credit, a reliable income, and money saved are items FMB will consider when we begin your mortgage loan
approval process. Before you begin your search, make it a priority to meet with FMB’s mortgage team. We will review
your current financial situation, establish a price range for your home search, and help you choose the mortgage loan
that is best for you.
What you need to know before applying for your first mortgage.
ESTABLISH GOOD CREDIT HABITS
Paying your bills in a timely manner, positively affects your credit score. With a high credit score, you may qualify
for a lower interest rate on your mortgage loan. All consumers have access to a free annual credit report. Refer to
www.annualcreditreport.com or call 877.322.8228. Obtaining and reviewing this information prior to meeting with your
lender will help you identify any possible setbacks that could arise during your mortgage loan approval process.
AVOID CREDIT PURCHASES WHEN YOUR LOAN IS PENDING
To avoid jeopardizing your mortgage loan approval, it is recommended that you not apply for credit or make any major
purchases on your credit card until after closing. A large purchase could negatively affect your debt to income ratio.
What is a debt to income ratio? In order to ensure you can comfortably cover your new mortgage payment, as well
as your existing monthly debt, FMB’s mortgage team will assist you in determining your debt to income ratio. This ratio
is determined by adding your total existing monthly debt and new mortgage payment together, and then dividing it by
your gross monthly income. An acceptable ratio may be as high as 55%. The maximum allowable ratio will vary with each
mortgage loan product.
EMPLOYMENT HISTORY
Having a steady job shows your lender that you have the economic stability to pay back your mortgage loan. If you have
been working continuously for two years or more, you are considered to have steady employment. However, you are not
required to have held the same job for two years in order to be approved for a mortgage loan. There are circumstances
that are acceptable. Be sure to share your employment history with your lender to validate its strength.
REQUIRED DOCUMENTATION FOR SALARIED BORROWERS
The basic items you will need to provide during the mortgage approval process are your most recent paystubs and bank
statements covering a 60-day period. You will also need to include your most recent W-2’s covering a two-year period.
Having this information easily accessible will assist you and FMB in closing your loan as quickly as possible.
REQUIRED DOCUMENTATION FOR SELF-EMPLOYED BORROWERS
Self-employed borrowers will be required to provide different documentation than a salaried borrower. The basic items
a self-employed borrower must provide during the mortgage approval process are bank statements covering a 60-day
period, and personal and business tax returns covering a two-year period. This would also include all IRS Tax Return
Schedules (1099’s, W-2’s, and K1’s, if applicable).
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FUNDS REQUIRED FOR CLOSING
When you buy a home, you must have verifiable documented funds available to cover the down payment, closing costs,
and any other expenses associated with the purchase of the home. The amount of the down payment may vary, depending
on the loan product, but generally you must make a down payment that equals at least 5% of the purchase price. There
are certain mortgage loan products that require less of a down payment. Your FMB mortgage lender can help you
determine if these options are available to you.
CLOSING AGENT
The closing agent is the attorney/title company that will provide the title insurance on the property you are purchasing
in addition to facilitating the actual closing. The cost of the title insurance is set by the state and will not vary amongst
closing agents. The closing and document preparation fees may vary considerably. The title insurance, closing, and
document preparation fees will be charged by the attorney/title company. Be sure to talk with your mortgage lender
regarding a reference on choosing your closing agent.
With such a milestone happening in your life, FMB’s mortgage team will ensure you understand the mortgage process.
We will hold your hand and be there for you every step of the way — answer all of your questions and guide you in the
right direction towards closing and moving into your first home!
FMB Mortgage loans
FMB offers a variety of loan products including Conventional, FHA/VA/USDA, Jumbo, and Construction/Perm.
Speaking with an FMB mortgage lender will help you decide which product will best fit your needs.
CONVENTIONAL HOME LOAN
A conventional loan is any mortgage loan that is not insured or guaranteed by the government (such as under Federal
Housing Administration, Department of Veterans Affairs, or Department o
f Agriculture loan programs).
 typically allows up to a 45% debt-to-income ratio
 minimum 3% down payment if you are a first-time homebuyer (5% if you have owned a home in the past)
 P
rivate Mortgage Insurance (PMI) required with any down payment less than 20%
The monthly fee is added to your monthly mortgage payment and may be removed once you reach a 20% equity position.
 Private Mortgage Insurance (PMI) is not required with a down payment of 20% or more
 620 minimum credit score
 maximum loan amount $424,100 (anything over this amount is considered a Jumbo loan)
FHA LOANS
The Federal Housing Administration (FHA) administers a program of loan insurance to expand homeownership
opportunities. FHA provides mortgage insurance to FHA-approved lenders to protect these lenders against losses if the
homeowner defaults on the loan. The cost of the mortgage insurance is passed along to the homeowner. The standards
for qualifying for these loans are generally more flexible than for conventional loans.*
 typically allows up to a 55% debt-to-income ratio
 minimum 3.5% down payment
 m
ust pay for mortgage insurance which includes an up-front funding fee as well as monthly mortgage insurance
— 1.75% funding fee can be paid at closing or financed into the mortgage loan
— M
ortgage Insurance Premium (MIP) required for any FHA loan This monthly fee is added to your monthly mortgage payment for the life of the loan no matter your equity position.
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 620 minimum credit score
 maximum loan amount $275,665
VA LOANS
The Department of Veterans Affairs (VA) offers loan programs to help service members, veterans, a
nd their families
buy homes. The VA does not make loans, but rather sets the rules for who may qualify, arranges the terms under which
mortgages may be offered, and guarantees any loan made under the program. Some VA loans are available with no down
payment.*
 must have a valid Certificate of Eligibility (COE) received from the Veterans Administration (VA)
 100% financing available
 b
orrowers with a VA loan must pay an upfront funding fee (unless considered exempt)
The percentage of this fee depends on what type of veteran you are, how many times you have used your Certificate of Eligibility (COE) in the past, and your down payment amount. This fee ranges between 1.5% and 3.3%.
 upfront funding fee can be paid at closing or financed into the mortgage loan
 typically allows up to a 55% debt-to-income ratio with a credit score over 640
 typically allows up to a 50% debt-to-income ratio with a credit score between 620-639
 620 minimum credit score
 m
aximum loan amount $424,100
(for 100% financing – depending on down payment amount, the maximum loan amount can change)
To learn more about VA loan programs, including whether you might qualify for one, visit the Department o
f Veterans
Affairs website at http://benefits.va.gov or call 1.800.827.1000.
USDA LOANS
The Rural Housing Service (RHS) is part of the U.S. Department of Agriculture (USDA). It offers mortgage p
rograms that
can help low- to moderate-income rural residents purchase, construct, and repair homes. The RHS both lends directly to
qualified borrowers and guarantees loans that meet RHS program requirements made by approved lenders.*
 p
roperty being purchased must be located in a rural area as determined by USDA Rural Development
Property eligibility requirements at http://eligibility.sc.egov.usda.gov
 100% financing available
 u
pfront guarantee fee of 1%
This fee can be paid at closing or financed in to the mortgage loan.
 a
nnual guarantee fee of 0.35% This fee is added to your monthly mortgage payment for the life of your loan no matter your e
quity position.
 typically allows up to 45% debt-to-income ratio
 b
orrower must be within income limits
Income eligibility requirements at http://eligibility.sc.egov.usda.gov
 640 minimum credit score
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JUMBO LOANS
A loan that exceeds the maximum amount Fannie Mae and Freddie Mac, and their regulator, the Federal Housing
Finance Agency (FHFA) will buy from lenders. The cost of obtaining a jumbo mortgage is generally h
igher than the cost of
obtaining other loans.*
 typically allows up to a 43% debt-to-income ratio
 minimum 20% down payment required
 720 minimum credit score with 20% or 25% down payment
 700 minimum credit score with 30% or more down payment
 maximum loan amount $1,000,000 with 20% down payment
 maximum loan amount $1,500,000 with 25% or more down payment and credit score exceeding 720
 6 months reserves required up to $1,000,000 loan amount
 9 months reserves required up to $1,500,000 loan amount
 most current 2-year tax returns must be provided in order to receive loan approval (extensions cannot be accepted)
CONSTRUCTION-TO-PERM LOAN
FMB’s construction to permanent home loans are a perfect option for those interested in building t heir dream home since
you will only incur closing costs once. The initial period of the loan covers the construction of the home (traditionally one
year). During this time, you will only pay interest on thefunds borrowed to date. Prior to finalizing your home, the loan will
then modify to a permanent loan.
 typically allows up to a 40% debt-to-income ratio
 minimum 20% down payment required (equity in land owned can be used toward down payment)
 620 minimum credit score
 maximum loan amount $424,100 (anything over this amount is considered a Jumbo Loan)
 during construction, borrower will only pay interest on the funds borrowed to date
 after completion of the home, the loan will modify to a permanent loan
 only pay closing costs once
* Source: www.consumerfinance.gov
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