Are you hoping to become a homeowner this year or want to refinance an existing home loan? If so, it pays to take the time to understand the current mortgage landscape. Getting the right loan can be as important as the home itself. The last thing you want to do is pay unnecessary fees or take on loan terms that might hurt your finances.
As a not-for-profit financial cooperative, SchoolsFirst FCU provides affordable solutions to help you achieve the dream of homeownership. Because we return profits after expenses to Members in the form of lower interest rates and low or no fees whenever possible, we offer highly competitive mortgage solutions, along with expert guidance to help you make the most of your money.
As you start researching your home loan options, here are some we think may be right for your situation.
First-Time Buyer’s Program
Most people know that one of the biggest hurdles to buying a first home is saving up enough money for the down payment and having enough cash on hand for closing costs. Because many consumers buy homes without putting 20% down, lenders usually charge private mortgage insurance, or PMI, to protect them if borrowers default on their loans. Our first-time buyer’s home loan features competitive interest rates, a low down payment — as low as 3%— as well as closing costs and minimal PMI coverage that is lower than FHA loans, making it a smart solution for those want to get into their first home but don’t have a lot of savings on hand.
School Employee Mortgage Program
If you’re a school employee, we offer a mortgage loan featuring competitive rates and a 30-year fixed term1. This means you’ll enjoy lower monthly payments than a shorter-term loan offers, and because the interest rate is fixed, your payments stay consistent. This mortgage also offers discounted loan processing fees and no PMI, which can help you save money over the long term and reduce your monthly payments. The School Employee Mortgage program features a 5% down payment option.
Adjustable Rate Mortgages
An adjustable rate mortgage offers a starting interest rate that’s lower than a fixed-rate mortgage at the beginning of the loan period. At the end of that timeframe – such as five or seven years – the interest rate will adjust up or down, depending on market conditions. If interest rates drop, your mortgage payment will be less each month, but if they rise, your payments will go up too. Our ARMs feature down payments as low as 5%, a no PMI option and lender-paid closing costs – depending on the loan amount. Frequently, people take advantage of the low rates ARMs offer and refinance before the fixed-loan period ends. If you’re considering an ARM, a loan consultant can help you understand exactly how they work, when your payment will adjust, how often it changes, and how high the interest rate could go.
Reasons to Refinance
There are several reasons you may want to refinance a home loan such as:
Becoming Mortgage Free
By refinancing to a mortgage with a shorter loan term, you can cut down your monthly expenses, boost savings and have more cash flow when you retire and are living on a fixed income. SchoolsFirstFCU offers a 10-year fixed2 that can help you own your home much faster as compared to a traditional 30-year loan. Keep in mind that your monthly payment will be significantly higher, so you’ll want to review your budget before you take the plunge. In fact, you may want to make higher payments on your own for a few months to see if you can handle the increase comfortably, or if you already have a competitive interest rate on an existing loan, just make higher payments and skip refinancing altogether.
Getting a Lower Rate
Reducing your monthly payment can make living in your home that much more enjoyable. However, in a rising rate environment, you’ll need to consider your options carefully. We offer some of the most competitive rates around, so check out SchoolsFirst FCU loans first before exploring other mortgage offerings.
Tapping Your Home’s Equity
If you have enough equity in your home, you may want to consider a cash-out refinance, which allows you to take out a new mortgage for more than the amount you owe and take the difference in cash. You can use this cash infusion for things like home improvements or consolidating debt. Other options for getting funds include a home equity loan or home equity line of credit. Hold off on refinancing if you plan to sell your home in the next few years, because you probably won’t be able to recoup the costs associated with refinancing. Use our Mortgage Refinance Breakeven calculator to see if it makes financial sense.
Benefits of the Home Advantage Program
If you’re ready to get started on your homebuying journey, our Home Advantage program pairs you with an experienced SchoolsFirst FCU loan consultant and participating real estate agent who will guide you every step of the way; and you’ll enjoy valuable savings and benefits offered exclusively to program participants.
Members enrolled in Home Advantage receive a 20% rebate from the commission of the participating agent who represents them in their home purchase — or 25% rebates from the commissions when both a home sale and purchase are completed through a participating Home Advantage agent.3
Expert Guidance When You Need It
Interested in a home loan?
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The pricing you may qualify for is based on factors including your credit rating and the combined loan-to-value (CLTV) of your property. A minimum credit qualifying score is required. Pricing is subject to change without notice. An approved application is required for pricing to be determined.
- For a $400,000 loan for a term of 30 years with a 4.53 $ APR the monthly payment will be $2,033.88. Payments do not include taxes and insurance premiums, and that the actual payment obligation may be higher. 2. For a $200,000 loan for a term of 10 years with a 4.53% APR, the monthly payment will be $2,075.66. Payments do not include taxes and insurance premiums, and the actual payment obligation may be higher. 3. Rebate payment is made by First Team Real Estate or HomeSmart Evergreen Realty and is credited to your benefit at the close of transaction. Purchase price must be greater than $150,000 after all credit adjustments. All rebates are subject to limitations, lender guidelines, and other requirements. Certain properties may not be eligible for rebates. Rebate is 20% for purchase only of a residential property in California. Rebate is 25% for a residential property sale and purchase in California. In order to receive the 25% rebates, the home sale and purchase transactions must take place within six months of each other. Please consult a qualified tax professional for advice on tax implications from receiving a rebate. First Team Real Estate and HomeSmart Evergreen Realty are not affiliated with SchoolsFirst FCU.
APR = Annual Percentage Rate. Disclosed APR includes 30 days of estimated prepaid interest.
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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or GreenPath Financial Wellness counselor who can help tailor a solution for you.
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