CUFS
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Easy Refinancing

How do I know how much house I can afford?
What is the difference between a fixed-rate loan and an adjustable-rate loan?
How is an index and margin used in an ARM?
How do I know which type mortgage is best for me?
What about "locking-in" my mortgage interest rate?
What are points?
What does my mortgage payment include?
What is an Escrow Account?
How much cash will I need to purchase a home?
How much down payment will I need?
How much are closing costs?
How long will it take to close my loan?
How can I pre-qualify for a mortgage loan?
If I am refinancing my home mortgage, what's the maximum loan amount?
Can I purchase investment property through CUFS?
Can I refinance an investment property?
Does CUFS do mortgages for second homes?
What is Private Mortgage Insurance (PMI)?
What is Upfront Mortgage Insurance Premium (UFMIP)?

 

How do I know how much house I can afford?

Generally speaking, 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 are willing to make. Give us a call so that we can help you determine exactly how much you can afford.

What is the difference between a fixed-rate loan and an adjustable-rate loan?

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 rate 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.

How is an index and margin used in an ARM?

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 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).

How do I know which type mortgage is best for me?

There is no simple formula to determine the type of mortgage loan that is best for you. The choice depends on a number of factors, including your current financial picture (credit score, amount of down payment, source of down payment and debt/income ratio) and how long you intend to keep your house. Credit Union Financial Services can help you evaluate your choices and help you make the most appropriate decision.

What about "locking-in" my mortgage interest rate?

We can "lock-in" your mortgage rate for 30 days at no charge. We will need to know the property address, the transaction type - purchase or refinance - and the loan amount in order to "lock-in" the interest rate. You may also "lock-in" your mortgage rate for up to 90 days for a fee.

What are points?

A point (also know as a discount point) is prepaid interest which a borrower or seller can pay at closing to "buy down" the interest rate for the life of the loan. One "point" is equal to 1% of the mortgage loan amount.

What does my mortgage payment include?

For most homeowners, the monthly mortgage payment includes three separate parts:

  1. Principal - Repayment on the amount borrowed
  2. Interest - Payment to the Lender for the amount borrowed
  3. Taxes & Insurance - Monthly payments are made to an Escrow Account for items like hazard insurance, mortgage insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and the property insurance company.

What is an Escrow Account?

Property Taxes, Mortgage Insurance and Homeowner's Insurance are typically paid monthly with the regular mortgage payment. A borrower may waive escrow funding if their loan-to-value is 80% or less and they pay a one-time fee of 0.25% of the mortgage loan.

How much cash will I need to purchase a home?

The amount of cash that is necessary depends on a number of items. Generally speaking, however, you will need to supply:

  1. Earnest Money - The deposit that is supplied by you when you make an offer on a house which will be credited toward the down payment at closing.
  2. Down Payment - A percentage of the cost of the home that is due at closing.
  3. Closing Costs - Costs associated with the processing of paperwork to purchase or refinance a house. Closing costs can also be paid by the Seller on a purchase transaction.
  4. Escrow Funds - You may also need to make an advance deposit into the Escrow Account at closing.

How much down payment will I need?

For conventional loans, the minimum down payment is 5% of the Sales Price of the house. For FHA loans the minimum down payment is 3.5% which can be a gift from a relative if documented.

How much are closing costs?

Closing costs vary from state to state. They also vary depending on the loan amount and may include charges for items such as origination fees, attorney fees, tax service, flood certification, processing fees, inspections, etc. Please call CUFS for a "Good Faith Estimate" of what your closing costs will be.

How long will it take to close my loan?

The time frame from application to closing is approximately 2-3 weeks, but can be shorter if needed. When purchasing a home, CUFS will make every attempt to close your mortgage loan by the Closing Date shown on the Sales Contract.

How can I pre-qualify for a mortgage loan?

To pre-qualify for a mortgage loan through CUFS, simply go to the Prequalify Section on the web site and submit the information requested. A preliminary credit report will be obtained to determine the loan amount you qualify to borrow. A letter will be sent to you which you can then use to make an offer on a home. This letter not only shows the realtor or seller that you are a Qualified Borrower and might give you more bargaining power but also lets you know just how much house you can afford.

If I am refinancing my home mortgage, what's the maximum loan amount?

Government Mortgage Loans (FHA)

  • The maximum loan amount is up to 96.5% of the appraised value of your home when refinancing your First Mortgage only.
  • The maximum loan amount is up to 85% of the appraised value of your home when you are paying off more than one mortgage and/or paying-off other debt or receiving cash-out.

Conventional Mortgage Loans

  • The maximum loan amount is up to 95% of the Appraised Value of your home when refinancing your First Mortgage only.
  • The maximum loan amount is up to 80% of the Appraised Value of your home when refinancing your First Mortgage and you also include a second Mortgage, pay-off other debt and/or receive cash-out.

Can I purchase investment property through CUFS?

Yes! The down payment is 15% of the Sales Price of the property if you qualify and is for Single Family Properties only. Interest rates for this type of mortgage will be slightly higher than for a Primary Residence.

Can I refinance an investment property?

Yes! The maximum loan amount is up to 75% of the Appraised Value of your Investment Property and can only be used to pay off an existing First Mortgage and for the closing costs.

Does CUFS do mortgages for second homes?

Yes! The down payment is as low as 10% of the Sales Price of the property if you qualify. Fixed and variable rates are available at the same rates as for primary residences. To qualify as a Second Home, the property must be located at least 60 miles from the primary residence.

Can I refinance a second home property?

Yes! The maximum loan amount is up to 80% of the Appraised Value the home. Cash-out is not allowed.

What is Private Mortgage Insurance (PMI)?

Private Mortgage Insurance is required on Conventional Home Purchases when a down payment is less than 20%. It is also required on refinanced Home Mortgage Loans when the borrower wants a loan that is more than 80% of the appraised value of the home. PMI is basically Foreclosure Insurance to protect the lender in case of default by the borrower. PMI may be dropped under certain circumstances. Talk to a CUFS Representative for more information.

What is Upfront Mortgage Insurance Premium (UFMIP)?

UFMIP is required on all FHA loans regardless of the down payment or loan to value. This is Foreclosure Insurance to protect the lender in case of default by the borrower.

Disclaimer: The information on this page is for illustration purposes only. Please contact us regarding your individual loan needs. CUFS makes no representations or warranties regarding the accuracy of the information provided on this page. Any warranties or representations expressed or implied are hereby disclaimed in their entirety.