Purchasing a home is one of the most important financial decisions you can make. Despite legislative efforts to improve and streamline real estate practices, buying a home can still be a challenging and time consuming process. Being fully prepared for this tall task could be the difference between getting the property of your dreams, and having a difficult home-buying process. We asked Anie Akpe-Lewis, Vice President of Mortgage Operations, some questions about purchasing a home, and her insights will help you get prepared to tackle the task of buying a home.
How long does it take to obtain a mortgage?
Most mortgage loans can close within 30-60 days. Special first-time home buyer programs, particularly those involving help with the buyer's down payment, might take additional time to close.
How much money do I need for a down payment in order to obtain a mortgage?
It is recommended to put down 20 % or more of the cost if you have that amount of money available. If you put down less than this you will be required to pay Private Mortgage Insurance (PMI) which protects the lender in the event you default on the loan. For Federal Housing Authority (FHA) loans, the down payment can be as low as 3.5%. In addition, you will pay an upfront Mortgage Insurance Premium (MIP) and monthly annual Private Mortgage Insurance (PMI) premiums.
What is the difference between a fixed rate mortgage and an adjustable rate mortgage? Does MCU offer both?
A fixed rate mortgage is simply a mortgage where the interest rate is fixed for the entire life of the loan.
An adjustable rate mortgage is a mortgage that usually has a fixed interest rate for a certain initial time period, but may adjust up or down after the initial time period expires.
MCU offers both fixed & adjustable rate mortgages.
What documentation is needed in order to apply for a mortgage at MCU?
In addition to a completed mortgage application, the following information will be needed initially in order to apply for a mortgage loan at MCU:
- Copies of two most recent year-to-date pay stubs
- Copies of last two years' W-2 forms
- Copies of last two months complete bank statements
- Valid Government issued photo ID
If buying, a copy of the fully signed contract of sale
In addition, applicants will be required to provide proof of MCU membership or their ability to obtain membership with MCU. You may be subject to additional requirements once your documents are received.
What are the requirements to be approved for a mortgage?
You must satisfy MCU's lending criteria, which considers, among other things, your debt-to-income ratios (i.e. your total monthly debt payments versus your gross monthly income), your credit history, and the approved value of the property being mortgaged.
Visit our Mortgage Calculators, Mortgage Learning Guides and Home Buying Coach to learn more about the home buying process. Visit our Rates section to find out the latest MCU Mortgage Rates. If you are ready to buy, apply for your MCU Mortgage online.
