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Ask the Lender – How can I compare the best options for selecting a mortgage?

Purchasing a home is one of the largest financial commitments you will make in your lifetime. Sometimes it helps to see the numbers in black and white in order to determine what really makes sense for you and your family. Fortunately, Citizens National Bank’s website offers some really invaluable tools to help you compare purchasing options. By using our mortgage financial calculators, you can input your actual financial information to view different scenarios and allow you to make an educated decision about purchasing a home. All these tools are free to use and available 24/7 from our website,

Mortgage Calculators
Adjustable Rate Mortgage Calculator This calculator helps you to determine what your adjustable mortgage payments will be.
ARM vs. Fixed Rate Mortgage Use this calculator to compare a fixed rate mortgage to a Fully Amortizing ARM.
Maximum Mortgage Use this calculator to determine your maximum mortgage and how different interest rates affect your how much you can borrow.
Mortgage Comparison: 15 Years vs. 30 Years Use this calculator to compare these two mortgage terms, and let us help you decide which term is better for you.
Mortgage Loan Calculator Use this calculator to determine your monthly payment and amortization schedule.
Mortgage Points Calculator Should you buy points? Use this calculator to find out.
Refinance Interest Savings Use this calculator to see how much interest you can save by refinancing your mortgage!
Rent vs. Buy Are you better off buying your home, or should you continue to rent?

Check them out and when you are ready to speak with someone about purchasing a home, contact one of our retail lenders!

Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.


Ask the Lender – What are my options as a first time home buyer?

If you are a first time home buyer the process can seem downright overwhelming. You may have a lot of questions such as “How much can I afford?” and “Are there any programs that can assist me with the
purchase of my home?”

Mary Ann George VP Loan Originator MLO #554356

Mary Ann George
VP Loan Originator
MLO #554356

The first thing you should do is schedule an appointment with a loan officer. The loan officer will review your financial situation and advise how much you can afford to spend on a home and what mortgage loan programs you may qualify for. Usually you want to keep your housing ratio around 28% of your gross income and 41% of your total debt. By going to the bank first you can get pre-approved for a loan which will help in making an offer on a home. This way the seller knows you are a serious buyer and will be more likely to consider an offer you make on the property.

There is a special program available once a year to aid home buyers called Welcome Home. These funds will be available beginning March 3, 2014. This is a $5,000 grant that can be used toward the down payment of a new home. There are income requirements that must be met to qualify for this grant. This grant does not need to be repaid. There is a 5 year stipulation that you must live in the property for 5 years for it to be 100% forgiven. The funds are limited so it is on a first come first serve basis. You do need to a have a purchase agreement for a new home in order to get registered for the funds. The process of this loan may take a little longer, but usually will be done in 45 days.

Some other sources of down payment may also come from your local government. Check the phone directory for your local office of housing and community development. If you don’t find any information there contact the mayor’s office or your county executive’s office to see what options may be available.

CNB keeps on growing!

Defiance construction

Defiance Office to open Summer 2014. Loan production office now open in Toledo!

As a strong community bank, we continually look for opportunities to reach more customers and offer our services to more businesses.

In 2013 we realized the need for a full-service branch in Defiance, having served that market since 2011. We broke ground on this new facility in September and construction is expected to be completed by July. The new office will be located at 601 E. Second Street and will be a full-service banking center including commercial and mortgage lending, business and personal deposit accounts as well as access to the bank’s investment center. “As our involvement with the Defiance community and our relationships with our clients have grown we realized the need to offer a full-service office to service our customers better. The state-of-the-art facility and comfort we will be able to now provide our Defiance area clients will be second to none in this area,” states Defiance City President, Brad Spitnale.

In January, another avenue for expansion was created when CNB opened a loan production office headed up by Nelson Shaffer, SVP/Market President in Toledo. The new office is located at 3454 Oak Alley Court, Suite 501. A Toledo native, Shaffer states “I’m proud to be part of the Toledo community and introduce Citizens National Bank to our market. The financial strength of CNB and the growth they’ve realized over the past 3 years is exceptional and I look forward to helping them gain more growth through businesses I’m able to partner with.” Services offered through this office include commercial lending and access to deposits through the bank’s Online for Business and Merchant Capture services.

Citizens National Bank is excited to begin new customer relationships in these markets and offer more locations for our current customers to access our services through. Click here for a complete list of our locations or call toll free 800-448-0025 to speak with a customer care representative.

Ask the Lender – How Much Home Can I Afford?

Deanna Bowman

Deanna Bowman,
AVP/Mortgage Specialist
MLO #1031822

Purchasing a home seems to be a rite of passage into the adult phase of life in our culture. But, how much home can you afford based on your existing income and debts? Deciding to purchase your dream home takes much consideration and planning. To determine how much of a home you can afford, you need to calculate your expected monthly payment.

Most of your payment will go toward loan principal and interest. However, your monthly payment is also likely to include amounts for property taxes and homeowner’s insurance. If you plan to make a down payment of less than 20% of the home purchase price, you will also have to add an additional amount for private mortgage insurance (PMI). Lenders require PMI to insure against the higher risk of default that occurs with loan-to-value (LTV) ratios greater than 80%.

After you calculate your monthly payment, you should calculate your housing and debt ratios. These ratios help you to get an idea of home affordability. Lenders rely on these ratios to help in their decisions to approve mortgage loans.

Your housing ratio is your total monthly payment divided by your monthly gross income. Generally, the ratio should not be more than 28%. For example, if your monthly payment is $1,650, your monthly gross income should be at least $5,892.

Your debt ratio is the sum of your mortgage payment and any other credit card or loan payments, divided by monthly gross income. Debt ratio will obviously be a higher percentage, since most people have other loans or credit card debt. Generally, your debt ratio should not be more than 36%. In this example, with monthly gross income of $5,892, your total loan payments (including the proposed mortgage loan payment) should not be more than $2,212.

How much of a home you can afford also depends on the amount of down payment you have saved. If you don’t have one saved, consider these alternatives:

  • Federal government mortgage-financing programs. The U.S. Dept. of Housing and Urban Development (HUD) and Dept. of Veterans Affairs (VA) run loan programs for first-time homeowners and veterans of the armed forces. These programs require little or no down payment.
  • Obtain private mortgage insurance. Private mortgage insurance, discussed above, allows you to make a down payment of as little as 5% of the home purchase price.
  • Borrow against the value of your investments. Some financial institutions offer mortgages that are backed by the value of your investments. With these programs, your investment portfolio serves as the collateral for your mortgage.
  • Borrow from your employer-sponsored retirement plan. Most employers allow you to borrow against the value of your 401(k) plan. (The IRS does not allow you to borrow from an IRA, however.) Remember that if you leave your job, you’ll likely have to pay back the full amount of the loan immediately.
  • Withdraw funds from an individual retirement account. While the IRS does not allow you to borrow from an IRA, it does allow penalty-free withdrawals of up to $10,000 for first-time homebuyers. However, you will owe income taxes on the amount of the withdrawal.
  • State government housing programs. Most states have programs to help residents buy their first homes.

In addition to a down payment, you should expect to pay closing costs on your home loan. Throughout the home financing process, there are many people involved to make sure that the home you’re buying is a sound investment for both you and the bank. Everything from your past credit history, to appraisals, to documentation preparation need to be in order.

Your lending officer will work with you to find the option that best works for you. But no one knows your financial situation like yourself. Being conservative in your projections of what you can afford is better than finding yourself in a position of being overextended. Be realistic in how much of your income you want to commit to a mortgage payment each month and still allow for the opportunity to save for your future.

Ask the Lender – What are points and is it worth paying for them?


Ty Shingledecker,
VP Commercial/Mortgage Lending

A mortgage customer may often hear about paying points or buying down points to obtain a lower interest rate. First of all we should describe what a point is. Quite simply, one point is equal to 1% of the loan amount. So ¼ point is equally to .25% of the loan amount and so on.

In a typical situation, by paying points a borrower may have the option of lowering their fixed interest rate, which they will have for the life of the loan.

For example if the 15-year fixed rate is 3.00%, the borrower may have the option of paying ¼ point to lower the fixed interest rate by .125%. This would effectively lower their monthly payment and lower their fixed interest rate to 2.875%.

To further explain, say for instance an individual was taking out a mortgage loan for $100,000. A 15-year fixed rate at 3.00% computes to a $690.58 monthly payment, whereas a 15-year fixed rate at 2.875% computes to a $684.89 monthly payment. To get the 2.875% in this example the borrower had to pay ¼ point, at closing, which amounted to $250.

So you might say why would anybody pay $250 to lower their payment by $5.69 per month? Well therein lies the borrower’s individual situation and risk. The breakeven point on this example is 44 months. If the borrower feels that they plan on owning the property for over 44 months or do not foresee themselves refinancing during that time period than buying points up front can be beneficial to them as every month after that breakeven point they will be better off. Conversely if they decide to sell the property or refinance during that first 44 months, looking back they would have been better off not paying the points and going with the initial rate.

In the end, paying points can be worth the investment, it just depends on your individual situation.

Ask the Lender – How much are the closing costs?

Rhonda Hogrefe, Loan SpecialistMLO #554363

Rhonda Hogrefe, Loan Specialist
MLO #554363

One of the first questions I often hear from first time home buyers is “how much are the closing costs?” Every purchase is different, so there is not one set amount. Typically closing costs run 2%-4% of the purchase price. Depending on the type of program you qualify for, your credit score may be a factor.

The following is a list of fees that you will typically see: origination fee, appraisal, documentation fee, title services and insurance, and the survey. You also have pre-paid items. These items include pre-paid interest, start up of your escrow account for taxes and insurance, and PMI insurance (if applicable). Maybe you decided to purchase points to get a lower rate. This is also collected at closing.

To help you better understand and be prepared so there are no surprises, you will be provided with several disclosures early on. These are required by law and are there for your protection. The most important are the Good Faith Estimate and the Truth in Lending.

Three days after your application is submitted, you will receive the Good Faith Estimate (GFE). This is a summary of your mortgage terms and settlement charges. This is only an estimate and the actual charges may differ. The estimate defines limits on how much certain fees can change between the estimate and the actual costs. You can evaluate your mortgage application and even explore other possibilities before accepting.

The Truth in Lending (TIL) allows you to see the cost of your mortgage under the terms of your loan. It will give you the APR (annual percentage rate) which combines your interest rate and closing costs and discloses it as a single rate to give you a true cost of borrowing so you can compare. For example, a loan with a lower interest rate may be a bad value if its fees are too high. Likewise, a loan with a higher rate with very low fees may be an exceptional value.

Keep in mind the mortgage tax savings you may be entitled to, but be sure to consult your tax advisor as there are limitations. Points paid on acquisition for a residence is fully deductible on the year they are paid. Thereafter, interest paid on a mortgage is tax deductible if you itemize on your tax return. These tax savings can affect the Effective APR. Again, be sure to consult your tax advisor on these issues.

Ask the Lender – Is it necessary to obtain a pre-approval?

Rod Stover, SVP Commercial/Mortgage Lender MLO #554357

A home is one of the most important purchases you will make in your lifetime.  As with any major decision, the more research and planning you do, the better you will feel about the decision you make. The pre-approval process helps you find the right price range, choose the appropriate loan program (term) and may determine the interest rate you receive. In order to avoid feeling overwhelmed, we can guide you through the process and help you find the right fit for your financial situation.

Getting started...

Evaluate your household budget and determine a maximum payment you feel comfortable with for your mortgage loan.  If you do not have a budget and need some help, go to Mortgage Guaranty Insurance Corporation (MGIC)’s website,

  • Click on HOMEBUYERS at the top of the page.
  • Click on HOMEBUYER EDUCATION on the lefthand side.

The link to this site will provide many resources regarding the home-buying process, from pre-approval to closing your loan.

MGIC has also prepared a series of newsletters designed to help you. These newsletters cover topics that include: budgeting, the importance of credit, protecting your identity and understanding your credit report.

Obtaining your pre-approval…

Schedule a meeting with one of Citizens National Bank’s mortgage lenders. A list of things to bring to your appointment is located on our website at During the pre-approval process the lender will work with you to find the right product and term that best fits your financial goals.  To obtain a pre-approval, a lender evaluates your credit history, and calculates your housing and debt ratios. You should expect to verify your income, length of employment and source of down payment.

A pre-approval letter shows the seller(s) and/or the realtor(s) that you are a serious buyer and this will put you several steps ahead of other interested buyers that have not started the application process yet. If a lender denies pre-approval, you should investigate immediately. Without a pre-approval, your chances of obtaining a mortgage loan are jeopardized. If a lender bases the decision, in part, on information in your credit report, you have the right to receive a free copy of the report.