1st Mortgages

What types of mortgages are available?
I’m interested in buying a home - Where do I start?
What about refinancing?
The Loan Process
Contact us for an application packet.

What types of mortgages are available?

You want a mortgage that's right for you. If you’re planning on keeping the house for only two or three years, for example, lower closing costs and whether or not there’s a prepayment penalty for paying off the loan early could be paramount. There are many factors which will influence your decision about what type of mortgage loan is right for you.

If you want your monthly principal and interest payment to remain the same for the life of the loan, and are planning to stay in the house for a while then, a fixed-rate mortgage is right for you. Adjustable-rate mortgages usually offer a lower initial interest rate, which means lower initial monthly payments (and you may qualify for a larger mortgage); and this is appealing for the short-term homebuyer. Remember, though, that once the rate becomes "full," it may be more than you bargained for.

Interest rates change often, and vary by type of loan. Even a fraction of a percent difference in an interest rate can have a significant impact on the amount of your loan. The factors to consider:

(A Glossary of terms is available for your convenience.)

Fixed-rate or adjustable mortgages
Interest rates
Points
Annual percentage rate (APR)
Loan term
Down payment requirement
Private Mortgage Insurance (PMI)
Rate lock-in
Prepayment penalty
Escrow requirement
Closing costs
Payment schedule
Initial interest rates
Adjustment interval
Interest rate caps
Payment caps
Convertibility

I’m interested in buying a home - Where do I start?

Owning a home ... it's an American dream, but to make it come true you need information and planning. Most people take out a loan or mortgage. Even if this is an unfamiliar process to you, we can help - use the calculators we’ve provided to assist you in estimating mortgage payments, analyze your current expenses, and so on – in short, to find out if you’re ready to buy a home and how much you can afford to spend. Also, use the glossary to better understand the terms and concepts. We’re always happy to to answer your questions – just contact us.

What about refinancing?

If interest rates have decreased, you may want to consider refinancing your mortgage to reduce your monthly payment or the term of the loan. Because there are costs involved, refinancing is an attractive option if you don’t plan to sell your house for at least a couple of years, and the rates are at least 2 percent lower than the rate you’re currently paying.

The Loan Process

Owning a home is perhaps the biggest financial commitment you’ll ever make. Home financing is a big step. Better said, it’s a series of small steps – interview, credit report, underwriting, closing – all of which, ultimately, get you "in the door" at a rate you can afford. A good way to get started is with a brief description and visual "roadmap" of what to expect during the loan application process.

Loan Interview	Loan Processing	Verifications
Credit Report	Appraisal	Underwriting
Approval	Closing	Loan Servicing
	Glossary

Loan Interview

Although a face-to-face interview isn’t mandatory, you may find it helpful to meet with a loan officer to discuss financing options, such as whether or not you want to "lock in" at a particular interest rate. If you will be signing the loan with a co-borrower, that person may also wish to attend this meeting. The more information you can provide at this stage, the quicker your loan will proceed. But before you do anything else, complete, to the best of your ability, your loan application form. Contact us to mail you an application.

The kind of information you may be asked to provide includes:

purchase contract on the house
credit union account numbers and statements
pay stubs or W-2 forms – or other proof of employment and salary (tax returns, balance sheets, and profit-and-loss statements, if you’re self-employed)
debt information, including loan and credit card numbers and creditors’ names and addresses

Loan Processing

Once you submit the loan application and other required information, we will mail your complete application packet to CUC Mortgage. They’re mainly interested in three things: the house you’re planning to buy (which serves as loan collateral), your financial situation, and credit history. Within three business days of receiving your application, they will send you a Truth-in-Lending statement, including the APR (annual percentage rate you’ll be paying).

Verifications

As part of the processing of your loan, they will verify all information on your application, including employment, deposit accounts, assets, liabilities, and so on.

Credit Report

CUC will order a report on your current credit status and past credit history, including monthly payments, current balances, and payment history.

Appraisal

CUC will arrange for an appraisal by a licensed real estate appraiser on the property being purchased or refinanced. The appraisal determines the value of the property. If the appraised value is less than the agreed-on purchase price, you may not be able to get as large a mortgage as you wanted, and you’ll need a larger down payment. With an appraisal contingency in your contract, however, sometimes you can renegotiate the purchase price.

Underwriting

After all information on your application is provided and verified, the application goes to underwriting to assess the risk. An underwriter looks at four major factors: employment/income, assets, credit history, and the value of the home. Based on the underwriter’s findings, CUC will recommend approval, ask you for more information, or reject the application.

Approval

Once CUC has received all of your documentation, they prepare your loan for final approval. When they approve your loan, they send you a commitment letter, or formal loan offer, laying out the amount and terms of the loan. You’ll have several days to accept the loan offer and close on the loan. Signing the commitment letter means you accept the terms of the loan.

Closing

The closing date is set after you’ve accepted the commitment letter. The closing is the meeting to finalize the property sale, issue the mortgage, and typically turn over the keys to your new home. During this final step in the loan application process, all relevant documents are signed, and you pay various settlement costs with a cashier’s check. Here are steps that should be completed before the closing:

You will need to have a completed title search;
You will need to have purchased homeowner’s insurance;
You will need to have specified type of ownership, such as sole ownership, tenancy by entirety, joint tenancy, or tenancy in common.

Loan Servicing

After closing, your loan becomes a "mortgage" as it moves into the loan servicing function. This is when you begin making monthly mortgage payments to pay off the loan.