Residential Mortgage Loan
Information and Terms

Fixed Rate Mortgage Loans

Fixed rate mortgage loans are available for terms from ten to 40 years. The interest rate is fixed for the life of the loan. There is no prepayment penalty and the loan is not assumable.

Fees associated with this loan include and application fee, commitment fee, tax service fee and an attorney review fee.

Adjustable Rate Loans

The interest rate for an adjustable rate loan is variable. All ARM loans are based on an index. The ARM products and parameters are listed below:
1 year ARM & 5/1 year ARM - 30 year amortization
The index used is the 1-year Treasury Securities. The minimum down payment for the purchase of a primary residence is 5%. The maximum LTV for a refinance is 90% for owner occupied and 80% for investment properties. The margin used is 2.75%. Caps are 2% per adjustment and 6% lifetime. The floor is the rate as designated with three points.
7/1 year ARM - 30 year amortization and 5/1 year ARM 40 year amortization
The index based on the 1-year Treasury Securities. The minimum down payment for the purchase of a primary resident is 5%. The maximum LTV for a refinance is 80%. The margin used is 2.75%. Caps are 2% per adjustment and 6% lifetime. The floor is the rate designated with three points. All 40 year products available for single-family, owner occupied residences only.

1 Year Arm Disclosure  5/1 Year ARM Disclosure  7/1 Year ARM Disclosure  5/1 Year ARM Disclosure-40 Year amortization

Purchase Mortgage Loan

The minimum required down payment for purchase transaction is five percent for all fixed rate loans. PMI will be required on all loans with a LTV greater than 80%. See adjustable rate loan parameters for additional information.

First Time Home Buyer/New Beginning Program

Franklin offers two programs for first time home buyers: First Time Home Buyer Program and New Beginning Program.

First Time Home Buyer Program

Franklin Bank makes it easy to get your own piece of the American dream. The interest rate is discounted .125%, making it easier than ever to become a home owner. The minimum down payment is 5% for Fixed Rate and ARM mortgages. All applicants that have not had ownership interest in a home in the last three years qualify to apply for a residential mortgage loan under our First Time Home Buyer Program.

New Beginning Program

The New Beginning Program is designed for first time home buyers with income limitations. The interest rate is discounted .125%. The minimum down payment is 5% for Fixed Rate and ARM mortgages. Total income of the applicant(s) may not exceed 115% of the HUD median income for each Metropolitan Statistical Area (MSA) which encompasses the counties in which Franklin offers mortgage loans. The following chart outlines income limitations:

INSERT: 2008 HUD Median Income chart

Construction Loans

Franklin offers three different types of construction financing:

• Construction to Permanent: Temporary construction financing provided for the construction with the commitment from customers to convert to a permanent mortgage loan. Rates on permanent loan will be the same as regular mortgages, locked in 10 days prior to final settlement. With the construction financing, the rate will be Prime plus .50%, plus bank fee of 1 point. The minimum rate is 7.00% and is fixed for 9 month term. The point collected at first draw. Fees include: application fee, inspection fees, attorney review fee, commitment fee and tax service fee.
• Construction only: Prime rate plus .50% (Prime Rate is currently 3.25%) plus bank fee of 1 point. The rate is fixed for the construction period. Minimum rate 7.00%, maximum term is 9 mos., maximum LTV is 90%. The point collected at first draw. Fees include: application fee, inspection fees, attorney review fee, and commitment fee. Add one point for an investment property .
• Land Acquisition/Construction to Permanent: Same parameters as construction to permanent mortgage except there is a 30% down payment on value of land required. The rate will be Prime plus .50%, plus bank fee of 1 point. The minimum rate is 7.00%. Applicants must apply for land acquisition and construction financing at initial application. The point is collected at first draw. Fees include: application fee, inspection fees, attorney review fee, commitment fee and tax service fee.

Property Types

Primary residence

Available for 1-4 family residential properties and condominiums.

Investment Properties

A premium of 1% is added to the rate for investment properties. Additionally, one point (1%) is charged. Loan types available include adjustable rate mortgage and fixed rate mortgage. The maximum financing is 80% LTV. Available for 1-4 family residential properties.

Second Homes

A premium of .25% is added to the rate for second home properties. The minimum down payment is ten percent and private mortgage insurance will be required for all loans exceeding 80% loan to value.

Condominiums

The minimum required down payment for an owner-occupied condominium is 10%.

NOTE: Any property that is not classified a single family or a 2-4 family will require an individual quote from the Loan Department.

Large Acre Properties

Franklin offers financing for residential properties with land greater than 25 acres. The interest rate would be the current rate plus .25%.

PMI

Private Mortgage Insurance, PMI, is required on mortgages with less than 20% down payment for purchase transactions or with a LTV greater than 80%.

LTV

LTV is the loan to value ratio used for underwriting a loan. The LTV is the loan amount divided by the appraised value or purchase price, whichever amount is less. For all residential mortgage loans with a loan to value ratio greater than 80%, PMI will be required.

Maximum Loan Amounts

Conforming 30 year fixed rate maximum loan amount $417,000
$417,001.-$650,000 - Add 1/2% (0.50%) to the rates stated, max LTV 90%.
$650,001.-$850,000 - Add 1% to the rate, max LTV 90%
$850,001 and up - Requires individual interest rate quote from loan department

Fees associated with a Residential Mortgage Loan

• Application fees (non-refundable), to be paid at closing:
  • $100.00 on all first mortgages applications, except construction loan requests.
  • $150.00 on all construction, construction to permanent or land acquisition/construction to permanent , for single family dwellings.
• Appraisal feess (non-refundable), to be paid and returned with the initial disclosures:
• $95.00 on all first mortgages-New Beginning SFR.
• $325.00 on all single family dwelling first mortgages.
• $375.00 on all condominium first mortgages.
• $450.00 on all 2-4 family dwelling first mortgages.
• The appraisal fee may be higher for properties with large acreage or for jumbo loans. 
• Commitment Fee: $300.00 commitment fee is due for all conventional mortgage loans, paid at closing.
• Tax Service Fee: $110 fee for properties in New Jersey, Delaware and Pennsylvania. This fee is paid at closing.
• Attorney Review Fee: $150 fee for all mortgage transactions. Fees for properties in Delaware and Pennsylvania will be higher.
• Inspection Fee: $100 inspection fee will be charged for each inspection of a construction loan.

Additional Rate Factors

Your actual interest rate and annual percentage rate may be higher depending on your credit history, loan to value, down payment, property value, property type, loan purpose and income to debt ratios