FNBO Mortgage Loans

An interest rate is the annual cost of borrowing money expressed as a percentage. It does not include fees. The annual percentage rate (APR) is a broader measure of the cost, since it does include the interest rate and other fees you pay to get the loan. Talk to a loan officer and they can further explain interest rate vs. APR.

An adjustable rate mortgage (ARM) is a loan that offers a lower initial interest rate than most fixed-rate loans but will adjust up or down to match changes in the market on interest rates after a certain length of time. It can be a trade-off, depending upon a few things. You could start with a lower monthly payment knowing interest rates may increase in the future, leading to a higher monthly payment, or the opposite—rates could decrease. When considering an ARM, think about how long you plan to own your home, whether you expect your income to increase, and your tolerance for risk.

Points are considered a form of interest and are an optional fee you pay to lower the long-term interest rate on your home loan. Each point is equal to one percent of the loan amount. Paying points requires more funds at the time of closing but can result in lower monthly payments over the term of the loan.

Mortgage interest rates are as hard to predict as the stock market, and we don’t know for certain whether they’ll go up or down. If you feel that rates are on an upward trend, then you may consider locking in your rate early in the loan process. Review your contract for the estimated closing date to help choose the right time to do so. Also, ask your loan officer about FNBO’s Lock & Shop program¹.

¹ First National Bank of Omaha’s Lock & Shop program locks the initial interest rate for 60 or 90 days on 15- and 30-year conventional, 30-year FHA and VA fixed-rate purchase loan products. Your exact interest rate will depend on the date you lock your rate. In order to obtain this rate, a fully executed purchase agreement must be received by First National Bank of Omaha (FNBO) within 30 calendar days of a 60-day lock or 60 calendar days of a 90-day lock. You will have the option to extend the due date for the purchase agreement and the rate lock expiration one time by 15 days. In addition, you may exercise a float down in the rate to the current market rate within seven calendar days of executing a purchase contract. Please contact your loan officer to exercise this float down option. Additional fees, conditions or exclusions may apply. This is neither a commitment to lend nor an approval of the loan inquiry. Any change in rate or fees may affect approval of the loan.

The interest rate on a 15-year loan is typically lower and, because of the shorter amortization period, you’ll often pay less than half the total interest of a 30-year mortgage. Monthly payments on a 15-year term may be significantly higher, so keep that in mind. Many people feel that a 30-year loan makes financial sense, but your situation may permit you to choose a shorter term.

None of the mortgage loan programs we offer (on a first mortgage) have penalties for prepayment. You can pay off your mortgage any time with no additional charges.

Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment. It protects the lender against the additional risk associated with low-down-payment-lending. Because a homeowner purchases mortgage insurance, many lenders are comfortable with down payments as low as 0 - 5% of the home's value; benefiting those who want to get into a home but don’t have the cash for the down-payment on hand.

Once you have at least 20% equity in your home, talk to your loan officer about how you can either reduce your costs or possibly eliminate the need for mortgage insurance.

Yes. Starting with a loan officer is advised. Getting pre-qualified before you begin your home search can give you an edge when looking for a home in a competitive buyers’ market. You’ll also know how much home you can afford. Keep in mind that pre-qualification is different than preapproval. Preapproval requires additional documentation and a review of your credit history.

A credit score is a compilation of information converted to a number that helps a lender determine the likelihood that you will repay your loan on schedule. Items that affect your credit score include payment history, outstanding obligations, the length of time you’ve had outstanding credit, the types of credit you use, and the number of recent inquiries regarding your credit history.

Your credit score is calculated by a credit bureau, not by the lender. It has proven to be an effective measure to determine credit worthiness. As a rule of thumb, a higher credit score means you’re a lower credit risk and, in some situations, will help you attain a lower interest rate.

It could. An abundance of credit inquiries can sometimes affect your credit score since it may indicate that your extension of credit is or may increase.

You will be charged for a credit report only if you go through the complete process of acquiring and closing a mortgage loan. There are no fees charged for your pre-qualification.

Yes, you can borrow funds to use as your down payment. However, any loans that you take out must be secured by an asset that you own. Please keep in mind that the terms of the borrowed funds may impact your loan qualification.

Generally, the income of self-employed borrowers is verified by obtaining copies of personal federal tax returns, and business when applicable, for the most recent two-year period.

In order for bonus, overtime, or commission income to be considered, you must have a history of receipt of compensation and it must be likely to continue. We'll typically obtain copies of W-2 statements for the previous two years and your most recent 30 days of pay stubs to verify this type of income. There may also be cases where additional information directly from the employer is required.

We will ask for copies of your recent pension check stubs or bank statement—if your pension or retirement income is deposited directly in your bank account. Sometimes, it will also be necessary to verify that this income will continue for at least three years since some pension or retirement plans do not provide income for life. This can usually be verified with a copy of your award letter.

An appraisal report is a written description and estimate of the value of a property. National standards govern not only the format for the appraisal, they also specify the appraiser's qualifications and credentials. In addition, most states now have licensing requirements for appraisers. The appraiser will create a written report for FNBO, and you will be provided with a copy. Usually the appraiser will inspect both the interior and exterior of the home. An appraisal is required to determine the value of the property you are either purchasing or refinancing.

Licensed appraisers, who are familiar with home values in your area, perform appraisals. Generally, it takes 10-14 days before the written report is sent to the lender. FNBO will provide a copy of the appraisal, even if your loan does not close.

As soon as we receive your appraisal, we will update your loan with the estimated value and provide you with a copy of the appraisal.

The appraiser will make note of obvious construction problems such as termite damage, dry rot or leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported.

However, appraisers are not construction experts and won't find or report items that are not obvious. They won't turn on every light switch, run every faucet or inspect the attic or mechanicals. That's where a home inspection comes in. A detailed home inspection can inform you about possible concerns or defects that may not be revealed in an appraisal.

If you get an inspection, it’s wise to accompany them while they go through the home. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and ask questions about the condition of the home.

Federal law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by the Federal Emergency Management Agency (FEMA). The Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.

We work with a third-party company that specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If so, then flood insurance coverage will be required since standard homeowner's insurance won’t protect you against damage from flooding.

In some areas of the country it is customary to have an attorney represent you at closing, and occasionally it is required by law. In other areas, attorneys are not as common nor are they required for closing. Once you have been assigned or choose a title company, ask their closing agent if you have specific questions regarding attorney representation.

Yes. At least three days prior to closing, you will receive and review the documents in your closing disclosure.

The closing agent acts as the lender’s agent and will represent FNBO at closing. You will of course attend! Your personal loan officer may or may not attend but will contact you prior to closing to discuss your documents and to provide a final breakdown of all closing fees.

If you aren’t able to attend the closing, contact your loan officer to discuss your options.

The location can vary. It is typically determined by the title company, seller and by you, the buyer. Regardless of location, FNBO will deliver loan documents and wire transfer your funds to the closing agent or attorney prior to your closing date, so they'll have time to prepare.