Mortgage FAQs

There is no simple formula to determine the best type of mortgage for you. The choice depends on several factors, including your current financial picture and how long you intend to keep your house. Our mortgage lenders can help you evaluate your options and make the right decision. 

With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us. 

The amount of cash necessary depends on a number of items, including: 

• Earnest Money, the deposit supplied when you make an offer on a house 
• Down Payment, a percentage of the cost of the home due at settlement 
• Closing Costs to process paperwork to purchase or refinance a home 
• Reserves, the monthly portion of taxes and insurance set aside to establish escrow accounts, if applicable 

Typically, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you’re willing to make. You may also be able to take advantage of special loan programs for first-time buyers to purchase a home with a higher value. We can help you determine exactly how much you can afford. 

An index is an economic indicator that lenders use to set the interest rate for an ARM. Generally, the interest rate that you pay is a combination of the index rate and a pre-specified margin. Three commonly used indices are the One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR). 

For most homeowners, the monthly mortgage payments include three separate parts: 

• Principal, the repayment on the amount borrowed 
• Interest, the payment to the lender for the amount borrowed. 
• Taxes and Insurance, the monthly payments normally made into a special escrow account for items like hazard insurance, property taxes and monthly mortgage insurance, if applicable or paid by you directly to the County Tax Assessor and property insurance company 
• Private Mortgage Insurance, if applicable, added to the monthly payment schedule 

If you have a request for information or believe there’s an error with your loan, please write to us: 

First National Bank 

ATTN: Credit Department 

P.O. Box 289 

Pulaski, TN 38478 

 Please include the following information in your letter: 

• Your name 
• Home address 
• Loan account number 
• Specific details of the request or error