Advice & Planning


POSTED: Jun 14, 2018
MCU’s Guide to Home-Buying Terms

The home-buying process can be confusing at times but the language and terminology doesn’t have to be. Check out some common real estate terms to know when getting ready to buy a home – it could save you time, frustration and even money down the road!

Buyer’s Agent: A real estate professional who is hired by and will advocate for a potential homebuyer. This means they will share their knowledge of the housing market, discuss the pros and cons of any home and assist with all legalities, negotiations and paperwork.

Listing Agent: A real estate professional representing a specific home and its owners by creating a strategic plan for how to market and sell the property. This agent will also properly prepare a home for showings and bring the right prospective buyer to the listing.

Fixed-Rate Mortgage: A mortgage that has a predetermined interest rate that will not change throughout the duration of the loan. Most commonly, there are 15-year and 30-year fixed-rate mortgages.

Adjustable Rate Mortgage: A mortgage that may has an interest rate that will change over time as interest rates fluctuate. Most adjustable-rate mortgages have an initial fixed-rate period, which can last between 3-10 years.

Mortgage Prequalification: An unofficial estimate made by a financial institution or lender regarding of how much mortgage a potential homebuyer can afford. This is done by reviewing an individual’s debt, income and assets but does not include an analysis of their credit report.

Mortgage Preapproval: An official letter provided by your financial institution or lender stating you are a suitable candidate for a mortgage (up to a certain amount). This requires a potential homebuyer to complete an official mortgage application, then supply the lender with the necessary documentation to a credit check and look into their financial background.

Home Inspection: A professional consultation that determines the structure, safety and system functionality (rather than its design or cosmetics) of a home. This inspection focused on evaluating a home’s major features including plumbing, electrical wiring, foundation, heating and appliances. A home inspection is not always mandatory before finalizing the purchase of a home but it is strongly recommended.

Home Appraisal: An objective assessment of a home’s market value, which will ensure that the amount of money requested by a borrower is appropriate. This assessment can be based off recent sales information for similar properties, the current condition of the property and its location.

Earnest Money: A monetary deposit made by the homebuyer to show that they are serious about going forward with purchasing a property. This amount is deducted from the sale price at closing.

Title Insurance: A form of insurance required by most lenders to make sure the home seller actually has the rights to the property title and that there are no liens on the home, such as unpaid taxes or utilities.

PMI / Private Mortgage Insurance: A type of mortgage insurance a homebuyer will be required to pay if they are providing a down payment of less than 20 percent on the total cost of a home. This will protect the lender if the homebuyers stops making payments on their mortgage.

Closing Costs: Taxes and fees that must be paid during the purchase (or closing) of a real estate property. These costs may amount to approximately five percent of the purchase price of the home and may include excise tax, loan-processing costs, attorney fees and an escrow fee.

Escrow Account: An account set up by the mortgage provider at the time of closing that is designed to help the new homeowner pay annual property taxes and insurance. This is done when the mortgage provider builds a small additional cost into the homeowner’s monthly payment in anticipation of the mentioned expenses. The mortgage provider then saves these funds on the behalf of the homebuyer until the expenses come due. Then, they will make the necessary payments on behalf of the homebuyer.

POSTED: Jun 26, 2017
Home Improvement Projects to Tackle this Summer

When done properly, do-it-yourself projects are a great way for homeowners to maintain their property, prevent expensive future repairs, increase their home’s resale value and even find opportunities for family bonding as you take on new challenges. Even better, a little can go a long way when it comes to your home and with the warm weather and long days, summer is the perfect time to get started. Check out our suggestions on where to get started below!

1. Landscaping and Outdoor Maitenance

You don’t need to be a professional to make your yard look like it was done by one. In addition to a well-trimmed lawn, simple projects such as weeding, cleaning and maintaining walkways and planting flowerbeds may require a bit of elbow grease and patience but will go a long way in creating an oasis for the summer.

Similarly, taking time to maintain a patio and deck area will add to the over appeal of any outdoor area. This may include power washing stone patios or taking a weekend to strip to repaint wooden decks. Outdoor furniture can also take a hit due to the elements and can benefit from a thorough cleaning, upkeep, and even replacement after every few years.

These projects can go a long way in sprucing up your home’s curb appeal, which may make it more attractive to potential homebuyers.

2. Paint

Never underestimate what a new coat of paint can do for a room. For just the cost of paint and rollers, along with a day or two’s worth of work, homeowners can update and brighten a room while also taking off years’ worth of buildup and staining at the same time. Homeowners can also get creative and try new trends such as bold accent ceilings to stay up-to-date with current styles.

It is also important to keep up with the exterior paint on a house. No matter how old your home is or how long you’ve lived in it, fresh paint will make your home look like new. A great quality paint job will last for years, so it means less overall upkeep on your exterior and savings over having to have it painted more often.

3. Pay Attention to Details

Small do-it-yourself decorating projects will allow you to make affordable changes that can update any room with a fresh new look. This may include rearranging the furniture, and replacing pillows and other worn-looking accents with more with up-to-date styles. Kitchen and bathrooms can also benefit from easy upgrades homeowners can take on without the cost of a contractor. These small renovations may include replacing cabinet handles, faucets and showerheads.

4. Insulate Pipes

Pipe insulation is the process of wrapping your pipes in a material such as fiberglass in order to keep them from freezing in the cold weather. While your mind may be far away from the winter weather, summer is a great time to take on this project. You may even thank yourself later – taking the time to insulate your pipes will help prevent expensive issues in the future, including water damage, deterioration, mold and mildew.

5. Learn Basic Furnace Maintenance

By learning how to do basic furnace maintenance tasks this summer, you can avoid splurging on professional help. These tasks may only take a few hours out of your weekend but they’ll go a long way in extending the overall life expectancy of your gas or propane-fueled furnace, while also increasing the efficiency of your unit. This means homeowners can look forward to a worry-free winter with lower energy bills are on the horizon.

POSTED: Jun 19, 2017
MCU’s Five Things to Know about HELOCs

As a homeowner, a home equity line of credit (HELOC) is a convenient financial lending product that allows you to borrow against your home’s equity to manage your expenses as needed. Check out our five things to know below!

1. How it Works. The equity in your home is the difference between the value of the property and the amount owed on your mortgage. A HELOC, which is known as “revolving debt”, allows homeowners to borrow against this equity in various amounts over time as needed. Once you pay back what you’ve borrowed, that amount is made available again.

For example, a homeowner may be approved for a $40,000 line of credit, which will remain open for 10 years. During that time, they may borrow $10,000 to take on home improvement projects, which would leave them an additional $30,000 to borrow. However, once they’ve repaid the $10,000, they will have full access to the originally approved amount of $40,000. The homeowner may use their line of credit as many times they want while their HELOC remains open.

2. Take Advantage of Competitive Rates. A HELOC is especially useful to homeowners because the interest rate tends to be much more competitive than the rates on credit cards and personal loans. This may save borrowers hundreds or even thousands of dollars throughout the lifespan of their HELOC.

However, borrowers shouldn’t fixate solely on the interest rate. Shopping around to get an idea of the terms and fees offered by different lenders will help you be sure that they’re getting the best deal possible.

3. Your Credit Score Matters. Like all lending products, the interest rate on a HELOC will depend on your credit-worthiness. Borrowers with high credit scores (700 and above) can expect to be offered the best rates and those with lower scores can expect to pay more.

Before applying for a HELOC, check your credit report. This will give you the opportunity to review your score and take actions to correct any mistakes that may be affecting it.

4. Know Your Limit. While the percentage will vary, many financial institutions will offer you a HELOC amounting to about 85% of the equity in a borrower’s home. Of course, just because you could be approved for that amount, a borrower should always stick to a loan or line of credit that they are confident about comfortably paying back. If a homeowner does default on a HELOC, they risk losing their home to a foreclosure.

5. Selling Your Home? While you don’t have to pay off your HELOC before listing your home, you’ll be expected to do so quickly once you’ve sold it. The easiest way to take care of the balance is to pay it out of the sale proceeds at the time of closing in addition to the remaining balance on your mortgage. However, homeowners can run into trouble if their homes have insufficient equity to cover these expenses.

POSTED: Aug 05, 2016
Co-ops Vs Condos: Know the difference

In New York City, co-ops and condos are among some of the most popular kinds of real estate available to potential homebuyers. While there may not seem to be much of a difference between these types of properties, key differences could make a big difference in your experience as both a homebuyer and homeowner. Check them out here!

1. Ownership

While co-ops are typically more affordable than condos, there is a difference in the type ownership between the two. Legally, condos are considered to be real property and co-ops are personal property.

This is because when you purchase a co-op, you’re purchasing stock in a privately-held corporation that owns the building. As a stockholder, you are given a proprietary lease for a specific apartment. The shares give you the right to live in the apartment, provided you following the by-laws of the building.

A condo, on the other hand, is a straight forward form of ownership like owning a house.

2. Board Approval

Both co-ops and condos usually have boards, which are committees that help to make sure the complex runs smoothly. However, co-op boards are notoriously strict and have a greater say in what tenants can and cannot do.

In a co-op, the board can come up with rules regarding how you renovate your apartment, keep pets, and much more. In extreme cases, the co-op board can even evict a shareholder that it deems disruptive. The benefit from this is to protect your investment and provide a peaceful environment in the building.

When buying a co-op, you must go before the board and submit to an approval process. The board will go over your finances and credit, and review your debt-to-income ratio. This is done to ensure that all potential owners of the co-op can pay for their mortgage and co-op maintenance fee. This process involves a great deal of paperwork, which may often require the assistance of an attorney to prepare.

3. Income Property

If you think you may want to use your new home as a source of income at some point, you’ll want to consider the difference in subletting policies between co-ops and condos. As mentioned before, co-op boards can be very strict in the policies they enforce for co-op owners. This includes whether or not owners can lease their units and if so, for how long. Condos, on the other hand, do not enforce leasing limitations.

4. Monthly Expenses and Taxes

Both condos and co-ops have monthly fees, which are respectively referred to as common charges and maintenance fees. These charges go towards the overall maintenance of the building and its common areas. These fees can vary with the size of the building, number of units and types of amenities offered.

The main difference between a condo’s common charges and a co-op’s maintenance fees is that the maintenance fees include charges for a percentage of the building’s property tax, which are calculated according to the number of shares you own.

If you own a condo, you are responsible for paying your unit’s property taxes directly to the government. Therefore, it might not be wise to directly compare these fees.

It is important to note that both types of properties can also charge assessment fees for building renovation projects, such as the installation of a new elevator.

POSTED: Nov 06, 2014
When it Pays to Refinance Your Mortgage

For homeowners, a mortgage refinance could mean big benefits – it can help lower monthly interest payment, drop private mortgage insurance and even help individuals reach financial goals. However, while this financial move can save you thousands of dollars over time, it’s not the right decision for everybody and homeowners must take their personal circumstances into consideration before starting the process.

To help decide if a mortgage refinance is right for you, check out these important factors to take into consideration.

1. You’re planning to stay put until you break even Refinancing a mortgage is only financially beneficial if homeowners commit to staying in their homes longer than the break-even period. This is the number of months you need to own your home after refinancing in order to recover the expense.

For example, if you pay $2,000 in closing costs to refinance your mortgage and you lower your monthly payments by $100, it would take 20 months to reach the break-even point if you were to calculate it on a straight-line basis ($2,000/$100).

2. Your home has increased in value. If the value of your home has gone up considerably, you might also get some benefit from refinancing your mortgage, especially if you have other high-interest debt to pay off or you’re expecting some upcoming expenses. In this scenario, homeowners can refinance for a new mortgage that’s larger than what they previously owed, and you receive the difference in cash. This is known as a cash-out refinance and it’s often used as an alternative to a home equity line of credit.

For example, if you currently have a $200,000 mortgage on that has increased in value over time to $350,000, you could be refinance your mortgage for $225,000 (or more!) and use the extra money however you need.

In other situations, refinancing your mortgage after your home has significantly increased in value can also help to eliminate PMI, which will lower monthly payments. Homeowners typically pay PMI until they have 20 percent equity in their property. If the value of your home increases enough where you now owe less than 80 percent of the home’s value, you may benefit from a refinance.

3. Your credit has improved (a lot). Your credit score and credit history help a lender understand if you are a reliable borrower. The more reliable you are, the higher your credit score and the lower your interest rate. If your credit score has considerably improved (about a hundred points more), you could qualify for a better interest rate on your mortgage.

And because your mortgage is such a significant amount of money – hundreds of thousands of dollars – even a few tenths of a percentage point could mean saving thousands of dollars over the lifespan of your loan.

4. You’re ready to shorten your loan term. Refinancing your mortgage from a 30-year fixed rate to a 15-year fixed rate will mean a larger monthly payment and less financial flexibility for times when money may be tight. However, if you’re financial circumstances have changed (you may have gotten a promotion or made a career move), and you feel confident in taking on a larger bill each month, you could ultimately find yourself saving thousands of dollars on your mortgage in the long-run.

POSTED: Nov 05, 2014
Common Home Buying Mistakes and How to Avoid Them

Obtaining a mortgage is perhaps one of the most complex decisions of your life: nevertheless, it is also one of the most important. With the length of time it takes to buy a home, and all of the different steps you need to complete throughout the process, many mistakes are made by potential homebuyers. Here are some of the most common mistakes made during the home buying process, as well as some tips to avoid these costly errors.

Mistake: Not knowing your credit score. Some people do not realize their credit score is too poor for them to buy a home and obtain a mortgage. In other instances, some people just assume they have poor credit and do not realize their credit is good enough for them to obtain a mortgage at a good rate.

Tip: Don’t just know your credit score; understand what that means regarding your potential as a home-owner. Educations classes (such as MCU’s First Time Home Buyer’s Seminar) are a great way to better understand how your score affects you in the home buying process.

Mistake: Assuming your down payment is the only upfront cost associated with buying a home. There are many fees and closing costs that need to be paid along with the down payment.

Tip: Know your budget when shopping for your home, and make sure to include additional costs when budgeting for your home purchase. Shop around when looking for your mortgage. In some instances, financial institutions will waive some closing costs and fees to help keep your initial payment low.

Mistake: Not knowing about all costs of home ownership in the neighborhood(s) where you are looking to buy. The cost of your home is more than just the price of your house.

Tip: Do research and find out the cost of property taxes, Homeowners Association Fee, Plan Unit development fees, homeowner’s insurance, and other costs that will affect how much you can actually afford.

Mistake: Having an unrealistic view of the mortgage process timeline. The process usually takes 30-45 days to close after receiving necessary documentation, not 30-45 days from the initial contact with the loan officer.

Tip: Plan effectively. Know that the process is just that, a process. Understand that your financial activity during this time period can affect your credit, which can affect your capacity to be a homeowner in the lender’s eyes.

Mistake: Taking referrals from your Real Estate Agent for banks/loan officers, attorneys and other important people in the home buying process. This likely means the real estate agent has a working relationship with these people, which could mean higher costs for you.

Tip: Find a family member or friend who recently purchased a home, and ask them for the financial institution and attorney they worked with. Always make sure you trust the people you are working with.

If you have other questions about obtaining a mortgage, call the MCU Mortgage Hotline at 212-238-3521 and speak with a Loan Originator today.

Today’s Rates

Auto Loan1.95%
Personal Loan5.95%
30 Year Fixed4.434%
IRA 18-Month Variable0.30%
Share Certificate 36-Month0.60%
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