
What is a home loan?
A home loan enables you to
buy a home without having to pull all the cash directly from your pocket at the
time of purchase. You’ll need to make a down payment, which is typically
between 3.5-20% of the home’s value, along with closing costs and some other
fees. The home loan will finance the rest. You’ll then repay the loan,
along with interest, generally over the course of 15 to 30 years.
Are all home loans alike?
There are several kinds of
home loans, each with its own attributes. Here are three common types:
- 30-year fixed-rate mortgage. The interest rate on 30-year mortgages remains fixed despite any changes to the national rate.
- 15-year fixed-rate mortgage. This fixed-rate mortgage will only last 15 years. Monthly payments will be higher, but the overall interest paid on the loan will be much lower.
- Adjustable-rate mortgage (ARM). An ARM will give the borrower a lower interest rate in the early years of the loan, followed by a gradual rate increase over the rest of the life of the mortgage.
Community Financial Credit Union also
offers a variety of other mortgage options, including:
- Buy Before You Sell
- 0% Down Program
- FHA Mortgages
- Rural Development Mortgages
Each of these programs offer
their own advantages and are available to you based on specific qualifications
which can be found here on our website.
What do I need to know before
applying?
To qualify for a mortgage,
you’ll need to prove you are financially responsible and you can afford the
monthly mortgage payments.
One way lenders gauge
your financial responsibility is through your credit score. This number tells
lenders how you’ve handled your past debts. Most lenders will grant a home loan
to borrowers with a score of 650 or more. To boost yours, pay your bills on
time and keep your credit card usage to a minimum. A higher score will help you
get approved and will help you achieve a lower interest rate on your loan.
Another factor in determining
your eligibility is your debt-to-income ratio (DTI). Lenders want to know how
big your collective outstanding debt will be in relation to your income if you
receive the home loan.
When should I apply?
It’s a good idea to start the
mortgage process before you begin house hunting. Your Mortgage Specialist will
let you know whether you can expect to be approved for a loan and will provide
you with an estimate of how much house you can afford. At this point, you can
also ask for a preapproval letter, which confirms you are qualified for a
mortgage and shows sellers you’re a serious buyer.
How do I apply?
To apply for a home loan at
Community Financial, call us at 877-937-2328 or stop in and ask one of our Mortgage
Specialists to help you get started. Community
Financial offers Free Pre-Approvals to make your home buying process even
easier. Check out our website’s Mortgage Services page for more information about what documents you’ll need
to have handy during the application process.
What are 20 yr rates currently?
ReplyDeleteToday's mortgage rates can be viewed at cfcu.org/mortgage. If you'd like more info please give our mortgage team a call at 877-937-2328 ext. 8500. Thanks!
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