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Welcome To The Insighter!

Explore the latest happenings at Kirtland FCU and learn about important topics from around the financial world. Here’s your insight!

All Posts > Home Loans

Home Loans

“The buyer is pre-approved!”

These words, given to a seller who is juggling multiple offers on their home, are really saying, “This buyer has money in hand and isn’t going to cause issues trying to secure the money later.” It’s gold to a seller and could very well tip the scales in your favor if you’ve put in an offer on a home with a lot of competition from other buyers.

A pre-approval means you’ve completed the most tedious parts of a mortgage loan application already and received approval from a lender. The documentation of your income and credit are done, so when you finally find your new home, the lender can go straight to work on appraisals, inspections and other house-specific tasks.

Can you apply for your loan after you’ve made an offer on a home? Of course, you can. But making an offer with your pre-approval in hand? Here are four reasons that’s a great idea for you as a buyer.
  1. Shop with confidence.  There’s no stress wondering if you’ll be approved for a mortgage for that house you just fell in love with. No one enjoys that rug-pulled-out-from-under-you sensation of a great home slipping away because the mortgage didn’t materialize. And when you’re pre-approved, you hold the negotiating power! You know how high of a price you can afford, and you know that your pre-approval is attractive to a seller.
  2. Spend more time seeing the RIGHT homes. If you have a solidified upper and lower cost limit, you and your real estate agent can focus in on only those homes you could potentially buy. That’ll save you time and frustration. Your real estate agent can use that information to narrow listings to only those in your price range, so you aren’t sent listings for homes that you will end up loving but not able to afford. And you won’t spend time touring a home that you can’t afford. It’s a more efficient way to shop!
  3. Gain an edge among other prospective buyers without pre-approved offers Compared to a buyer who hasn’t been pre-approved, your offer may seem more solid to a seller. A pre-approval shows a seller that you’re serious, committed, and they aren’t going to be let down after accepting your offer only to have to start from square one when your loan doesn’t come through. So, if it comes down to two similar offers, and yours is the one that’s pre-approved, you may have a better chance of the seller choosing your offer.
  4. Close faster when you’re pre-approved, a lot of the upfront paperwork and credit checks have already been completed, so you can get moving quicker. A pre-approval can shorten the time between offer acceptance and closing—something you AND the seller will appreciate.
Consider getting pre-approved as soon as you’re ready to start your home search. Getting approved is one of the longest (and most stressful) parts of getting a mortgage, so the more work you get done before shopping, the more you’re going to enjoy your shopping experience.

How do you get pre-approved? Just apply for your loan! The Kirtland FCU Home Loan team will collect the necessary documents and information, run credit checks, go over loan numbers with you and more. So, when you find your perfect home, all you need to do is make the offer!

And with Kirtland Federal Credit Union, you can apply for your mortgage loan any time, day or night, at KirtlandFCU.org/HomeLoan! Or, if you prefer, just swing by the Home Loan Center at 6700 Jefferson NE, Ste D-1 to get started in person.

Let’s move!
 

Home Loans

Refinancing is the process of paying off an existing loan with the proceeds from a new loan and using the same property as collateral. Usually, the interest rate on the new mortgage will be less than the old, the loan will cost less, and you will save money. However, refinancing isn’t appropriate for every homeowner. To know if it’s right for you, here’s a look at the pros and cons of refinancing your home.

The benefits
Many people choose to refinance because the reduced interest rate decreases their monthly mortgage payment, freeing up cash for other expenses. Every percentage point makes a difference. For example, if you refinanced a $200,000, seven-percent interest loan to a loan with six-percent interest, you’d have about $130 more in your pocket each month.

Another reason to refinance is to repay your mortgage faster, which is done by switching a long-term loan for one with a shorter term. With it, your mortgage payment would be higher, but you’d pay much less in interest over the life of the loan while building equity more quickly.

Cash-out refinancing is yet another attractive option. With this type of loan, you’d refinance your current mortgage plus take out some cash from the equity you’ve built up. The benefit? Interest rates on the cashed-out portion are often lower than a home equity line of credit, home equity loan, or second mortgage.

The costs
To determine if refinancing will work in your favor, you’ve got to weigh the savings in interest against the fees associated with refinancing. A new loan means you’ll have to pay most of the same costs you paid the first time around. These may include points, appraisals, attorney’s fees (in Attorney-only states, which does NOT include New Mexico as of August 2019), settlement costs (such as fees for the loan application, title search, appraisal, loan origination, and credit check), recording fees or transfer taxes, and sometimes a pre-payment penalty. All totaled, these costs can be high, and some lenders require at least a portion of them be paid at the time of application.

Much of the loan’s price depends on points. One point equals one percent of a loan, and to get you the lowest rate, most lenders will charge several points. The total cost can run between three to six percent of the whole amount you borrow. Therefore, on a $100,000 mortgage, the lender might charge between $3,000 and $6,000.

Some lenders do offer zero points, but the loan will have a higher interest rate. So, while a “no points loan” may indeed reduce your initial outlay, your monthly payment will be higher.

To know what combination of rate and points is best for you, compare the amount you can pay up front with the amount you can pay monthly. The less time you keep the loan, the more expensive points (and other refinancing costs) become. For example, if your refinancing costs are $3,000 and your payments are $125 lower each month, it will take you 24 months just to break even.

The tax effect
One of the primary advantages of home ownership is the savings you receive on your income taxes—all that interest (up to a million dollars for the first loan, and $100,000 for the second) is tax deductible, after all. Yet if you refinance the loan with a lower interest rate, you’ll have less interest to deduct. The effect may increase your tax payments and decrease the total savings you might obtain from a new, lower-interest mortgage.

If, however, you are in the final years of your mortgage, your payments probably consist of more principal and less interest. In that case, refinancing your mortgage with a longer-term loan will mean you’ll again pay more in interest—and increase your tax deduction. Note: you must check with your tax advisor regarding the deductions of your mortgage interest based on your particular tax situation.)

The best deal
So where do you find the best refinancing deal? The best arrangement may be with your current lender, since some offer original mortgage customers the lowest rates and cut-rate closing costs. Before deciding, though, shop around by calling several lending institutions and ask each one what interest and fees they charge. If you have Internet access, research rates before speaking to a lender, so you’ll be armed with the knowledge of what is out there.

Consumer protection
If the idea of refinancing fills you with as much fear as it does excitement, you have reason. This is a major financial decision, and one not to be taken lightly. Thankfully, some powerful consumer laws protect you against lending abuses.

When you refinance, your lender must provide a written statement (the Loan Estimate) of the costs and terms of the financing before you become legally obligated for the loan. Review this statement carefully. If you refinance with a different lender, or if you borrow beyond your unpaid balance with your current lender, you also must be given the right to cancel within three business days following settlement, receipt of your disclosures, or receipt of your cancellation notice, whichever occurs last.

If your lender charges an application processing fee, ask how much it is and under what circumstances it is refundable. Some lenders do not offer refunds if you are not approved for the loan or if you decide against taking it.

So, is it time to refinance your mortgage? If you will come out ahead financially, then it is definitely worth considering. However, if the difference is minimal or nil, it may not be the answer.

Come visit the Home Loan specialists at the Kirtland FCU Home Loan Center. An experienced loan officer can sit with you and go over your options to help you make the best decision for your situation.


 
This article was prepared by Balance PRO, a partner financial fitness program available to all credit union members!

Home Loans

Do you dream of owning your own home but the thought of meeting with a lender frightens you? Perhaps you are afraid of being turned down, yet again, for a mortgage loan. Or maybe you are overwhelmed with the application process itself? After all, applying for a mortgage can often be complicated and frustrating.
 
But it doesn’t have to be. If you fear you will never realize your dream of home ownership, we have some tips that may help you take the next step to make it a reality. 

Here are five steps you can take now to get mortgage ready:

Step 1: Create a plan to save.
If you are serious about buying a home, figuring out a way to save money is essential, and it all starts with taking the time to create a plan. Your plan begins with a detailed budget, because it’s the most effective tool for achieving financial goals. It will allow you to track and control every dollar you earn every month. Start by paying yourself first. One of the best ways to grow your savings is to put aside money consistently—even if it’s a small amount. Next is identifying your expenses. Be mindful of spending leaks like dining out, soda or snack purchases, entertainment, late fees, etc. Subtract your total monthly expenses from your total monthly income. It’s a good practice to move any surplus to a separate savings account. On the other hand, if you have a shortage of cash at the end of the month, you may need to get creative. Look for ways to cut expenses, plug spending leaks, and maybe even explore ways to temporarily increase your income (overtime, a second job, or a side-hustle). 

Step 2: Review your credit report. 
Lenders begin the application process with a review of your credit report, so you need to know where you are starting. Access your free credit report from www.annualcreditreport.com to ensure your creditors are sharing accurate information about your credit accounts. (Note:  www.annualcreditreport.com is the only source for free credit reports and is authorized by Federal law.)
Dispute any errors you find directly with the credit bureaus. Allow time for your report to be updated after the credit bureaus resolve your dispute (at least 30 days). Satisfy unpaid collections and charge-offs or negotiate with creditors for a less-than-owed payoff and then follow up to be sure your creditor updates. 

TIP: If you have never had credit before, you will need to find a lender that uses an alternative scoring model that takes into account your history of paying your rent, utilities, and insurance in a timely fashion. Lenders may also offer a secured loan option as a way to build credit.

Step 3: Bring your debts current, pay your bills on time and reduce your balances. 
Payment history is one of the primary factors in credit scoring, so start making timely payments on all of your accounts. Look for any late payments that may be dragging your score down that were reported in error. Next, pay close attention to your balances on your revolving accounts (credit cards or lines of credit). How much you charge compared to your extended limit affects your credit score negatively (credit utilization ratio). Reduce your balances or pay them off whenever possible. To avoid lower scores, keep balances low (below 30% of your limit) throughout the application process, and don’t take on any new credit. 

Step 4: Save money for upfront costs and down payment.
You will need money to cover upfront costs when you start the home buying process. Lenders typically collect an application fee or an appraisal fee when you begin the process. Plus, once you find the right home and decide to write an offer to purchase, the seller will likely require an earnest money deposit (amount varies). Finally, as you approach your closing date, you will need to provide funds for the down payment and closing costs which will depend on varying factors like your mortgage type, purchase price, loan amount, and so forth. We recommend you communicate regularly with your lender—the Kirtland FCU Home Loan Team will make sure you know ahead of the closing date exactly how much you will need to bring to closing. 

CAUTION: Upfront fees and earnest money deposits may not be refundable in certain situations. Since a closing involves several different companies, check with each party of your home buying team before entering into any contract to measure the risk of losing upfront fees in the event of cancellation or other issue that would prevent you from closing.

Step 5: Gather your income documentation. 
Before meeting with a Kirtland FCU Home Loan expert or another lender, gather your most recent 30 days of pay stubs, bank statements, and the past two years of federal tax returns. Most lenders will require a two-year employment history (in the same line of work) for each borrower. However, some lenders may make exceptions for recent graduates new to their line of work. Self-employed borrowers may need to provide a profit-and-loss statement and two years of tax returns, instead of pay-stubs. 

While the mortgage application process may seem daunting, being prepared ahead of time will help you breeze through the process. And the more you know, the better prepared you will be when you meet your lender for the first time. 
The Kirtland FCU Home Loan team is dedicated to making your home loan process as simple and transparent as it can be. And since we’re local, it’s easy to ask questions and get guidance. 

Learn more about Kirtland FCU’s great home loan options and the experienced team at KirtlandFCU/Mortgage.

 
This article was prepared by Balance PRO, a partner financial fitness program available to all credit union members!
Read more great articles to prepare for home ownership from Balance PRO.
Saving for Homeownership
Renting Versus Buying a Home
Eight First-Time Home-Buying Mistakes To Avoid

Home Loans

First-time homebuyers—or those who haven’t owned a home in years—face unique challenges in the home loan process. One of these challenges is the down payment. While an FHA (Federal Housing Administration for first-time homebuyers) loan offers reduced down payments, the sum required—3.5% of the sale price—will still total in the thousands for the average home.  This is on top of any other closing costs and other standard mortgage processing costs.

And for a buyer who hasn’t owned a home in years but is ineligible for an FHA loan, the even more sizable down payment may seem out of reach. Without an existing home sale to fuel a future purchase, the down payment can be a major barrier in the home buying process.

For these homebuyers, there is Jump Start!

Jump Start is a down-payment assistance program that provides up to 3% or $6,000 toward a down payment for qualifying homebuyers.
 
Think you may qualify for a Jump Start? Here are a few details you need to know:
  • Jump Start does not need to be repaid. While you do not have to repay this assistance (provided you meet the qualifications below), the addition of the program could affect your interest rate. Ask your home loan team for more details. 
  • Jump Start does not cover the entire down payment. The minimum buyer contribution to the down payment is $500.
  • You must remain in the mortgage for at least four (4) years. If you sell, transfer, or refinance the property you purchase with Jump Start before that, you’ll be responsible for repaying the full amount of the assistance.
  • There are income restrictions. Buyers must make no more than $65,500 for a 1–2-person household and $74,750 for a 3+ person household at the time of purchase to qualify.

Want to learn more about how the Jump Start might help you start your homebuying journey? Come talk to a Kirtland FCU home loan specialist today at the brand-new Kirtland FCU Home Loan Center at 6700 Jefferson NE, Suite D-1. 

Learn why Kirtland FCU is Albuquerque’s home loan leader and start your application today by calling 1-800-880-5328 or visiting us online at KirtlandFCU.org/HomeLoan.

 
An equal housing lender. Financing available for properties in New Mexico only. Loan subject to credit approval. Income limits and restrictions apply. Maximum assistance will up to 3% of the purchase price or a maximum of $6,000 with a maximum loan amount not to exceed $200,000. Loans with Jump Start assistance will require PMI. Borrowers will be required to complete a homebuyer education course. At least one borrower cannot have owned a home in the past three (3) years to be eligible for Jump Start assistance. Cannot be combined with any other offers. Program may be cancelled or suspended at any time without notice. Membership eligibility required. See a representative for complete details.

News Home Loans

You dreamed of a home, and so did Kirtland Federal Credit Union’s home loan team.

On the northeast corner of Jefferson and Osuna, a transformation has been underway in expectation of Kirtland Federal Credit Union’s new Home Loan Center. This centrally-located office now houses all of Kirtland FCU’s mortgage and home loan services under one roof for the first time in their 60-year history.

Mortgages? Check. Home equity services? Check. Education and learning opportunities. Check, check! If it’s home-related, it’s happening here at the Kirtland Federal Credit Union Home Loan Center, which proudly opened its doors on May 1, 2019.

Thinking of buying your first home? Exploring a home equity loan or line of credit? Come see the local experts at the Home Loan Center!

“Masters of mortgages. Heroes of homebuying.”

Kirtland FCU is Albuquerque’s home loan leader. Every step of the process is done locally, right here in Albuquerque. And after you get the keys and unpack the boxes, all your payments are made right here, too. You’ll never send a check out of state.
 
Even if you’ve already talked with someone else, apply and see how Kirtland FCU compares.
 
Great rates. No hidden fees. Local payments and services.
 
Let’s get moving!

Kirtland Federal Credit Union – Home Loan Center

HOURS:
Monday–Friday 9:00 a.m.–5:00 p.m.
Saturday 9:00 a.m.–1:00 p.m.
Sunday CLOSED

ADDRESS:
6700 Jefferson NE
Suite D-1
Albuquerque, NM 87109

Apply today at
KirtlandFCU.org/HomeLoan.

 
An equal housing lender. Financing available for properties in New Mexico only. All loans are subject to approval. Membership eligibility required. See a representative for complete details.

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