Advice & Planning


Let’s Talk About Mortgage Consolidation

The mortgage market has changed a lot in the last few years. Interest rates are low and that could mean big opportunities for homeowners looking to restructure and consolidate their mortgage debt.

So how does it work? A mortgage consolidation happens when a homeowner takes out a brand new, and more favorable, home loan that is large enough to pay off the current balances for all of their higher interest mortgages (including HELOCs or home equity loans) in one payment. Once these balances are paid off, the homeowner now has a new mortgage, along with new (lower) interest rate, terms and pay schedule that will work to their advantage.

These great deals can be made even better when homeowners consider their personal financial situations. Seemingly small changes such as an improved credit score or increased monthly income can help them to qualify for best interest rates and mortgage products available on the market, making a consolidation even more lucrative in the long run!

Some great long- and short-term benefits come with a mortgage consolidation. Check them out below!

  • Enjoy Paying Less in Interest. Two mortgages means two interest rates – and that means you’re spending a lot of unnecessary cash. By consolidating your mortgages, you’ll only be taking on one payment each month, saving hundred or even thousands of dollars in interest over time. As an added bonus, borrowers who have worked to boost their credit score over the years will qualify for more competitive rates offered by lenders.

  • Eliminate the Risk of a Variable-Rate Mortgage. It's easy to understand why many homebuyers (especially first-time homebuyers) will end up with a variable-rate mortgage. These loans often have very low initial monthly payments that can be enticing to anybody looking for a great deal. However, as the financial landscape changes over time, so will your rates, which means writing bigger checks to your mortgage provider and facing unpredictable monthly expenses.
    The good news: even if both of your mortgages have a variable rate, you can still consolidate them into one fixed-rate mortgage, which means your monthly payments will never be a surprise.

  • Pay Off Debt Faster. Nobody likes having debt handing over their head. As you plan to consolidate your mortgages, consider doing so with a home loan that has a shorter term agreement. A shorter loan will mean larger monthly payments, but it will also mean big savings in interest over time, while also working aggressively toward owning your home free and clear. A shorter loan is an especially viable option for borrowers who have seen a healthy increase in their monthly income and are comfortable taking on larger payments.
  • Don’t forget to do the math! A mortgage consolidation can be a smart financial move, but it’s not for everybody. As mentioned above, in order to consolidate your home loans, you’ll need to take out a brand new mortgage. That means you’ll have to pay closing costs and loan processing fees that can add up to thousands of dollars. Before you go ahead with a consolidation, it’s important to sit down and crunch the numbers to make sure that these upfront costs are worth the long-term savings. Be sure you understand both all of these upfront expenses, as well as your new interest rate and the terms of your loan.

    For more helpful information regarding homeownership and the home-buying process, visit our MCU Advice and Planning section here.

    Tips and Tricks for Selling Your Home in a Buyer’s Market

    If you’re serious about selling your home in a buyer’s market, it’s going to take more than a “For Sale By Owner” sign on your front lawn. Properties are sitting on the market longer, prices are dropping, and offers are less competitive than they might have been even a year earlier.

    We’ve come up with some great advice to help sellers navigate a more challenging real estate market. Check them out here!

    1. Hire a Great Real Estate Agent

    A real estate agent is one of your most important resources during the process of selling your home – especially when the market isn’t in your favor. These professionals can help sellers understand the value of their home, enlist strategies to motivate buyers, strategically list and advertise the property, and can even identify small changes and upgrades that can bring a home up to snuff on the current housing market. Even during a seller’s market, agents can be a huge help by assisting with paperwork, screening potential buyers, and hosting open houses.

    Remember that not all real estate agents are created equal, and in a market when selling your home is a bit trickier than normal, choosing the right professional to assist you is extremely important. Before agreeing to let an agent list your property, ask them about their knowledge of the neighborhood, their marketing strategies, how often they work with homes similarly priced to your own, and how they like to communicate with clients. Additionally, don’t forget to ask about a realtor’s commission fee early on, this expense can vary for each professional but many will be willing to negotiate.

    2. Make Small Upgrades and Repairs

    With more properties to choose from, buyers are feeling picky. And while you may think your home is in great shape, the truth is that you’ve probably grown used to some of its more tired features that could have a potential buyer thinking twice.

    Ask your realtor to make a few suggestions on where your home could use some extra attention. It may seem counterintuitive to spend money fixing up a home you’re leaving, but small updates can make a big difference in motivating a buyer, especially one who doesn’t want to be bothered to make changes once they have the keys. Freshly painted rooms, a healthy looking lawn, and new lighting and plumbing fixtures are among some of the most common budget-friendly upgrades that both have a great return on investment, while brightening up the look and feel of your space.

    3. Stage Your Space

    Becoming a homeowner is all about possibilities, but it’s tough for a buyer to realize the potential of a home when rooms are cluttered or decorated with items that are to someone else’s taste. Luckily, nudging a buyer’s imagination can be as simple as clearing your space. Start with organizing and storing your clutter, remove unnecessary furniture, and deep clean your home before an open house or professional photographs.

    Be sure to maximize the space and lighting in each room. If you’re working with smaller rooms or tight spaces, you may even want to work with a professional stager. This is a professional who will help you to rent furniture and design a space to showcase the functionality and comfort of a home.

    4. Consider Sweetening the Deal

    When it comes to closing the deal on a property, both sellers and buyers need to be ready to negotiate. The good news: If you’re wary about dropping the price of your home, you can sweeten the deal in more creative and affordable ways.

    Buyers, especially first-time homebuyers, may feel overwhelmed by all of the costs and fees associated with the home-buying process. Offering to take on a few of these expenses, such as the cost of a home inspection, may only actually cost you about $1,000 (a small expense compared to the price tag on your home) but can go a long way with getting a potential buyer on board. Sellers can also help cover some of the closing costs, offer to leave some appliances or furniture behind, or even provide an allowance for repairs or upgrades to the buyer.

    For more helpful information on how to navigate the home-buying process, visit our MCU Advice and Planning section here.

    A Guide to Your Home-Buying Dream Team

    For many, becoming a homeowner is a lifelong dream, but the process can sometimes feel like a nightmare. The paperwork can be complicated, the financing can be confusing, and nuances can feel endless. The good news: You don’t have to go it alone. There are great professionals out there who can help you throughout your home-buying journey to ensure that you’re choosing a home that both meets your needs and is a great investment for you and your family.

    We like to call these professionals the Home-Buying Dream Team! And together, their unique skills and knowledge will prove invaluable during your search. Learn more about who should be on your Dream Team roster here:

    1. Mortgage Professional

    Getting approved for a mortgage can take both time and (a lot) of paperwork. So, it’s no surprise that meeting with a mortgage professional should be your first order of business as you start your home-buying process (and build your Dream Team). These professionals will not only help you understand all of the requirements and complicated details of a mortgage, they can walk you through what to expect during the home-buying process, discuss the upcoming expenses you’ll need to prepare for, and help you understand how much mortgage you can potentially afford.

    You should also ask for a mortgage pre-approval. This is an important document that states how much you, as a potential homebuyer, are qualified to borrow from a particular lender. A pre-approval can be extremely helpful as you start your process – it can help you narrow your search, set a budget, obtain a real estate agent, and even motivate sellers.

    2. Real Estate Agent

    It may be easy to browse properties online and visit open houses on weekends, but it won’t replace a real estate agent. A real estate agent is a huge asset as you search for your new home – they offer knowledge of the current real estate market, prescreen properties, ask tough questions about a home’s condition, and help with negotiations.

    Remember, while the homes you’re interested in may be represented by an agent, you still need to hire your own to represent you and cater to your needs. The role of a seller’s agent is solely to sell the property at the best possible price, not help you make a smart investment.

    Check out our helpful tips on how to hire a real estate agent here.

    3. Home Inspector

    The first rule in home buying: Never purchase a home without an inspection. You could find yourself making an expensive mistake and taking on many unnecessary headaches.

    A home inspector’s job is to help a buyer fully understand the ins-and-outs of their potential new home. They will check for safety issues, pests (such as termites), and the current condition of the home’s systems, such as the plumbing, heating and electrical wiring. These findings won’t just help you make the final decision in going ahead with your purchase – it can give you more bargaining power during your negotiations with the seller and forecast future expenses you’ll need to prepare for now.

    4. Real Estate Attorney

    Like many states, New York requires that an attorney is present during a home closing. However, it’s important to choose an attorney who specializes in real estate law and can advocate for you best throughout your home-buying process in the best ways possible.

    Throughout this entire process your attorney’s responsibilities may include assisting in the title examination and insurance paperwork, drafting a formal written agreement for the sale of the home, helping buyers avoid common legal issues that arise during the purchase of a home, and assist in the closing portion of the transaction.

    Pro Tip: Research, Research, Research

    Your Dream Team can make or break your home-buying experience, so it’s important to do your homework before you employ anybody’s services. Doing the legwork now will ensure that you’ll be able to successfully build a team of professionals that will help you achieve your dream of being a homeowner. Ask friends and family for recommendations and research professionals on community boards to get the best idea about how communicative, responsive, helpful, and efficient a professional is across the board, not just in one or two experiences.

    For more helpful information on how to navigate the home-buying process, visit our MCU Advice and Planning section here.

    MCU’s Money-Smart Tips for Recent Grads

    If you’ve recently graduated college, congratulations!

    The ink on your diploma may have just dried, but we know that you’ve already got a lot of big plans for the future. As you work toward your goals, don’t forget that now is also a great time to pay attention to your finances.

    Not sure how to get started? Our money-smart tips will help you manage your expenses, plan ahead and create great habits that will last a lifetime!

    1. Start with a Budget

    No two financial situations are the same – especially when it comes to being a recent grad. Whether you’re living at home, renting your first apartment or going on to get another degree, an effective budget is always essential to balancing long-term goals and everyday expenses.

    No matter what your new financial situation looks like, a budget is a great tool that will help you to stay in financially great shape throughout your life. By creating a breakdown of spending, income, goals, and debts, you’ll be able to identify wasteful spending, adapt quickly to financial emergencies, and plan ahead.

    Learn more about how to create a budget that can work for you here.

    2. Make a Plan for Your Student Debt

    Ignoring your loans won’t make them go away. In fact, your student debt will stick with you until it’s paid off no matter what, even if you file for bankruptcy.

    Even if your budget feels tight, make your student debt a priority. Put a plan in place to move your finances in the right direction as quickly as possible – this may include setting up automatic payments, or taking advantage of programs such as the Income Based Repayment Plan or Income Contingent Repayment Plan. These strategies will make the process of paying down loan debt more manageable.

    Juggling student loans with your new living expenses and other costs can be tough. However, the quicker you pay down these debts, the less money you’ll ultimately pay in interest and the sooner you can start working toward new personal and financial milestones. For help creating a plan for your student debt and any other forms of debt you may have, check out our tips here.

    3. Build an Emergency Fund

    Saving for a rainy day can sound like a tall order when you’re fresh out of school, but expecting the unexpected is an important part of staying financially fit now and in the long run. A general rule of thumb is to set aside three to six months' worth of living expenses for an emergency fund in case of job loss, illness or an unexpected bill.

    If you’re not sure how to build an emergency fund into your budget, consider setting up direct deposit into a separate savings account that you do not use on a regular basis. Even a small contribution to this fund each pay period will help you to prepare for an emergency.

    4. Start Planning for Retirement ASAP

    Pay yourself first. Your golden years may be way off in the future, but sticking to this simple rule will make sure you’re ready when the time comes.

    An easy way to get started is to participate in an employer sponsored retirement plan, such as a 401(k) or 403(b). These plans are especially helpful because your employer will often match your contribution, up to a certain percentage. For example, they may offer to match up to 50 percent of the first five percent of your paycheck contributed to your retirement account or match you dollar-for-dollar up to six percent of your paycheck contributed.

    Make sure you fully understand your employer’s retirement plan and how you can maximize your investment. Not doing so now could mean leaving tens of thousands of dollars (or more) on the table when it comes time to collect.

    Remember – setting up tracking may be simple a thing that you can do at nearly any time, but it’s an important step to your privacy protection. This is definitely one task you don’t want to hold off on until it’s too late.

    5. Invest what You Can

    Investing your money is a great next step to building long-term wealth.

    While you may not feel financially ready to invest, easy-to-use mobile apps mean you can begin investing small amounts of money without the use of a financial manager. For example, spare change investment apps are becoming increasingly popular because they encourage users to invest small amounts using a system they call "round-ups." These apps monitor your bank account and automatically invests the change from your daily purchases.

    Other apps will make it easy to make small investments without having to pay commission fees, or keeping an account minimum.

    For more MCU Advice and Planning Articles, click here.

    So, You’re Thinking of Buying a Multifamily Home…

    You’ve got a lot to think about, especially if you plan on “house hacking”. This is when a multifamily homeowner lives in one unit and rents the other units out.

    We’ve come up with a few considerations you’ll need to make before beginning your search. Check them out below!

    1. The Reality of Renters

    Renters are an attractive prospect to owners of multifamily homes because they provide passive income. This extra cash flow is a great resource that can help homeowners cover the cost of their mortgage, build long-term wealth, and even reach other important financial goals.

    Sounds like a quick win, right? Not so fast.

    Passive income is a real benefit but being a landlord can be tough. Bad tenants may mistreat the property, break rules outlined in the contract or even stop paying rent entirely. And a bad tenant is a problem that doesn’t go away easily. The process of evicting an incompliant renter is a lengthy one that may require legal intervention (and a lot of money).

    Our advice: vet potential renters thoroughly. Ask for documentation including a copy of their credit score, proof of employment and references. This will help ensure that you and the tenant you choose will have a good working relationship.

    2. Great (But Complicated) Tax Benefits

    If you’re a landlord, tax season may be the most wonderful time of the year. This is because rental real estate actually provides more tax benefits than almost any other investment. And if you’re planning on house hacking, you’ll qualify for many of these perks. For example, landlords can deduct the interest on their mortgage payments, the cost of repairs they put into the property and any personal property used in the rental unit.

    These benefits are great but homeowners should know that they come at the cost of having to navigate complicated rental property tax requirements. There is an entire IRS publication dedicated to the rules of Residential Rental Property (Publication 527) – be ready to take time to read and fully understand your new obligations come tax season.

    3. Extra Expenses

    The more units in your multifamily home you have, the more expenses you’ll be facing upfront and over time. There are more appliances that may break, walls that need to be painted, faucets that leak– you get the idea. And while you may be eligible for great tax breaks that will help to cover some of these expenses, you’ll still need to manage the costs upfront.

    Income from renters can help create a cushion for these financial responsibilities throughout the year. However, property owners need to be financially prepared if this cash flow stops unexpectedly or doesn’t cover the full amount of the cost incurred.

    To help mitigate these risks and free up dependency on income provided by tenants, homeowners should build and maintain an emergency fund that can cover 3-6 months’ worth of expenses. This is especially important for long-term financial health because having this money set aside can help you avoid taking on high-interest debt in unexpected situations.

    4. More Demanding Mortgage Requirements

    Getting the keys to a multifamily home can financially demanding. For example, mortgage lenders may require a buyer to provide a down payment of 25-30 percent, compared to the minimum down payment of 3-5 percent required for a single-family home.

    And you’re not done just yet – in addition to this large down payment requirement, buyers will need to prove that they have a six-month financial reserve for their mortgage, property taxes, property insurance, and mortgage insurance.

    Lenders may factor in a percentage of your potential income from rent when it comes to qualifying you for a mortgage on a multifamily home. While this can help you get in the door for house hacking (pun intended), buyers should be cautious. As mentioned above, tenants are not always the most reliable source of income. Even if they default on their financial obligations to you, you as the homeowner, are still responsible for the full mortgage payment to your lender.

    MCU’s Five Things to Know: Tips to Avoiding Homebuyer’s Remorse

    According to a recent survey, more than 70 percent of Americans dream of owning a home. It’s easy to understand why. For many, buying a home means taking an exciting step towards the future. Besides being one of the most important long-term financial investments one can make, it’s a place where children can grow up, friends and family can celebrate milestones and memories can be made.

    But what happens when that dream becomes a reality? The truth is that homeownership can be tough. Really tough. In fact, according to a recent Bankrate survey, nearly half of all homeowners have some degree of buyer’s remorse, including 63 percent of millennial homeowners. The main cause of this regret: Most survey-takers reported that they weren’t as financially prepared as they needed to be.

    If you’re in the market to buy a home, now is the time to take important steps to financially prepare yourself for homeownership. Being prepared can make the difference between a smart buy and a financial challenge.

    1. First thing’s first – meet with a mortgage professional.

    The devil is in the details. And when it comes to buying a home, there are a lot of details. Before beginning your search, meet with a mortgage professional. He or she will walk you through what to expect, discuss the upcoming expenses you’ll need to prepare for, and help you understand how much mortgage you can potentially afford.

    When working with a mortgage professional, ask for a mortgage pre-approval. This is a formal letter stating how much you, the potential homebuyer are qualified to borrow from a particular lender. In most cases, realtors will not show you homes without one, therefore this is a highly recommended part of the home shopping process.

    If you meet with a mortgage professional and they do not think you are ready to buy yet, they should provide you with tips on how to get yourself qualified and ready to buy. Don’t hesitate to ask for help. Mortgage professionals can get you on the right track by offering options for credit-building, financial planning resources, and home-buying assistance programs.

    2. Be realistic about monthly expenses.

    You may be pre-approved for a generous mortgage but just because you can technically afford it, does not mean you should spend it. This is where many homebuyers go wrong.

    Biting off more mortgage than you can chew is a surefire way to feel financial stress. This is especially true because unlike renting, you’ll have other built-in expenses such as insurance premiums, taxes, private mortgage insurance, and maintenance that you’ll have to account for as well.

    Before taking the home-buying plunge, consider all of these costs and make an honest budget that includes all of your financial responsibilities, obligations, and goals. You may find that homes at the top of your budget are actually unrealistic or incompatible with your financial situation.

    3. Prepare for upfront costs.

    Homebuyers typically make a down payment worth between 10 and 20 percent of a home’s total value upfront. If you’re sweating over how much that may run you, you should know you’re not done yet.

    First-time homebuyers often forget to factor in closing costs as a part of their out of pocket expenses. Closing costs, which must be paid during the purchase of the home, are not included in the down payment. These expenses, which may include real estate taxes, loan-processing costs, attorney fees and an escrow fee, average 5-7 percent of the loan amount. Additionally, there can be unexpected expenses such as open violations on the property and tax liens that must be paid by you or the seller.

    Our advice: Save, save, save. It may never be easy to part with a large chunk of your hard-earned savings, but preparing for these expenses in advance will help you to stay stress-free and in good financial shape after you get the keys to your new home.

    4. Have an emergency fund ready to go.

    You should always be planning your finances for the future. After you have spent thousands of dollars on a down payment, legal fees, and closing costs, will you have money left over for incidentals?

    Homeownership comes with maintenance expenses. If you are a renter and now you own a house, the costs of maintaining your home fall squarely on your shoulders. Aside from the expense of general upkeep, what will you do if your boiler breaks? If a storm knocked a tree branch through your roof? Or if your plumbing is corroded and leaking under the home? These are just some of the many issues that can present themselves unexpectedly to you.

    Without the protection of an emergency fund, you may drive yourself into debt to handle these sudden expenses. A general rule of thumb is to put away three to six months' worth of living expenses set aside from your other savings and have it fully liquid (readily available).

    5. Start making financial compromises now.

    The financial responsibility of owning a home means you’ll likely have to adjust your lifestyle and spending habits. To prepare for this, it’s time to trade out non-necessity expenses for saving 20 percent of each paycheck. Trust us, you’re going to need that money for home expenses when the time comes!

    Dinners out? It might be time to opt for groceries. That new car you want to buy? Maybe buy used instead. The earlier you make these financial adjustments, the sooner you’ll adapt to the financial demands of becoming a homeowner.

    The most successful buyers are the ones that create a trial budget for themselves when shopping for a home. For example, if your rent is $1,500 a month but the mortgage loan officer told you that the home your want will be $2,500 a month, try to set aside $2,500 per month, for 4-6 months and see how your finances feel. If the new payment is a struggle during this trial period, then you should probably rethink and adjust your purchase budget to a figure that you can comfortably commit to for the next 15 to 30 years.

    MCU’s Tips for Hiring the Right Real Estate Agent

    If you’re getting serious about buying a home, it’s time to hire a real estate agent. These professionals can be a huge asset in making your home-buying process go smoothly – they offer knowledge of the real estate market, prescreen properties, ask tough questions about a home’s condition and help with negotiations. They serve as a resource who listens and has no problem answering any questions that are asked of him or her.

    However, the wrong agent can make your process more difficult by being inexperienced, unresponsive, inflexible, or tone deaf to your needs. They can really set you back in your search or even worse, put you in the wrong home.

    If you’re not sure how to get started when it comes to picking the right agent, we’re here to help. Check out our tips below!

    1. Take in reviews and recommendations.

    Don’t just call the first name you see on a “For Sale” sign. When it comes to finding a real estate agent, recommendations from friends and family members are a good place to start your search. Your loved ones almost always only recommend professionals or services that they trust, have had a great experience working with and believe that could be a real help to you.

    Sounds great, right? These recommendations are a helpful point in the right direction but you’ll still have to do your homework. We recommend following up with an internet search before contacting an agent – check their reviews on Yelp and other community boards. These will give you the best idea about how communicative, responsive, helpful and efficient and agent is across the board, not just in one or two experiences.

    2. Verify licensing and credentials.

    Before moving ahead with any real estate agent, take the time to find out about their credentials. An agent has a responsibility to represent clients ethically and legally. Because of this, agents – like many professionals – need to have the right licensing and accreditations to work with you.

    It’s also important to note that agents may have different specialties and additional training in particular areas that could work to your advantage during your home-buying process. Knowing how to recognize these accreditations, usually abbreviated and listed after a broker’s name, can help you make the best choice. Some of these special titles may include:

    • • Certified Residential Specialist (CRS)

    • • Accredited Buyer’s Representative (ABR)

    • • Seniors Real Estate Specialist (SRES)

    Ask the real estate agent for their license number and full professional name and write this information down. To verify their credentials, homebuyers can visit and search the database.

    3. Check the agent’s listings.

    Location, location, location – it’s the first rule of real estate. A realtor may have great credentials and outstanding reviews, but how well do they know the neighborhoods you’re interested in? Before moving forward with an agent, ask them about their track record in the towns and communities you like and check their listings online on their website and other real estate websites.

    Does the agent have a good inventory of homes in or near the areas you like? Is the price range similar? How much business does it look like their doing in your neighborhoods of interest? The key is to feel confident that your agent really knows the area and can show you a wide range of homes in the locations that you like without being too busy or in demand that they won’t have time to work with you as much as they should.

    4. Know the contract requirements.

    An agent will almost always require that you sign a contract with them before you begin working together. While it’s a standard practice, you should fully read and understand what the agreement entails and if the terms are fair and complimentary to your needs before signing it.

    These contracts may include a buyer's broker agreement, which is typically a 90-day or more commitment reflecting the availability of the broker, compensation for the broker and even a range of neighborhoods you’ll be shopping in. It may even include penalties if you go ahead and purchase a home that was initially shown to you by the broker but purchase without them. Knowing the ins and outs of an agreement with your agent could make all the difference in your home-buying experience.

    5. Understand the difference between a seller’s agent and a buyer’s agent

    Typically there are two brokers in a purchase transaction; the broker that represents you (the buyer’s agent) and the broker that is representing the seller (the seller’s/listing agent). If you start shopping for a home without a buyer’s agent, you may interact and begin working with the listing agent for the home.

    Realtors are typically paid solely on commission. That means that they have a financial incentive to sell you the homes that they are listing. When a broker is able to sell you a home as the sole broker in the transaction, they will be earning maximum commission on the transaction because they will not have to split their commission with another person. This means that the realtor may not have your best interests in mind. You should especially be wary of referrals offered by the listing agent for an attorney to represent you. Often that attorney will have the agent’s, not your interests at heart.

    6. Price Shop Your Insurance

    Having the right insurance is important but overpaying for it isn’t. Whether it’s home; auto; health or renters insurance, price shopping can go a long way.

    it’s recommended to request quotes from at least three providers before making a decision. But don’t let the policy price be the end all be all to your search. As your life changes overtime, you may need more or less coverage in some areas of your life. This is why it’s important to make sure you understand what’s covered and how much protection you’d have from a new policy.

    Be sure to do your homework on each of these new insurance providers and to note the details of the policies offered. In the end, you may decide to stick with your current provider but having official price quotes could help you negotiate the best deal possible.

    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.

    Four Things to Know: The Pitfalls of FHA Loans

    If you’re a potential homebuyer struggling to save for a down payment or working to rebuild your credit score, a Federal Housing Administration (FHA) Loan may seem like the key to homeownership. These government-backed mortgages only require borrowers to have a 500 credit score and provide a 3.5 percent down payment in order to qualify. However, as the old saying goes, “If something seems too good to be true, it probably is.”

    FHA Loans do have some benefits and have helped many homebuyers achieve their goals but the product comes with pitfalls, drawbacks and limitations that could slow down the home-buying process, cost you more money and have you considering other options.

    Check out our top four need-to-know facts below!

    1. Insurance costs may surprise you.

    It’s commonly known that homeowners who do not make a large enough initial down payment on a home will pay private mortgage insurance (PMI) alongside their mortgage until they have 20 percent equity in their home. After which, PMI can be cancelled.

    However, FHA Loans are a bit different. While homebuyers are allowed to use this product to make a modest 3.5 percent down payment on a home, they’ll be signing up to pay mortgage insurance premiums for the entire duration of their loan (or until they refinance).

    These premiums aren’t necessarily inexpensive either. Most recently, FHA mortgage insurance premiums can reportedly amount to nearly one percent of your loan balance (for a 30-year fixed-rate FHA loan).

    And while many homebuyers anticipate a residual mortgage insurance premium for at least some time, those going forward with an FHA Loan will also have to pay an upfront premium, which is currently 1.75 percent of the loan amount and will be have to be paid at the time of closing.

    When everything is said and done, these extra costs will make an FHA Loan more expensive than initially expected.

    2. There are limitations to the kinds of property you buy can buy.

    Looking to take on a fixer-upper or pay a bargain price with a foreclosed property? An FHA Loan probably won’t be an option. Before a homebuyer can be approved for an FHA Loan, a property will need to meet certain standards, including health and safety requirements.

    This loan product will even be off the table to certain properties that are move-in ready. FHA Loans don’t apply to coop units. Condos may also be a challenge to get approved if there is a high number of empty units in your building or problems with your Home Owners Association are apparent.

    3. Sellers may be hesitant to enter into a deal.

    The current home-buying market is highly competitive and in many cases, buyers need to make an offer with their best foot forward or they will quickly lose out. That being said, home sellers do not always like to accept offers when the buyers are using an FHA Loan, as it suggests a lack of financial strength. They may also be wary of any extra requirements (from both themselves or the buyer) that could delay or even threaten the deal. To seal the deal in a hot market, buyers would do best to use another form of financing.

    4. Your financing options will be limited.

    FHA loans are only available to borrowers as a standard 15-year or 30-year fixed loan. And while this may work for most borrowers, for some, an interest-only mortgage or an adjustable rate loan may better suit their needs and long-term plan.

    While these financing limitations may not fit your lifestyle, further stipulations may mean that these loans won’t work for your budget either. In response to the changing home prices, every year the FHA changes the maximum and minimum loan amounts that it will insure. In 2018, these parameters in high competition areas will be between $294,515 and $679,650. If you’re looking outside of this price range in either direction, an FHA Loan won’t work.

    MCU’s 10-Step Home-Buying Checklist

    Dreaming of the day you can stop renting? The path to homeownership can be a long and confusing one. The key to start early and plan ahead! Get started today check out our 10-step home-buying checklist below.

    1. Save for a Down Payment

    While a mortgage may be able to cover up to 97 percent of your new home’s price, you will still need to plan and save for a down payment. In addition, the more you can save, the better – having a larger down payment will not just reduce your monthly mortgage bill but will make a more competitive offer on a home. Putting down a 20 percent down payment will even help you to avoid paying the monthly expense of private mortgage insurance (PMI).

    To start saving, potential homebuyers will need to sort out their finances and are encouraged to pay off any outstanding credit card debts, boost savings and look into special down payment assistance programs (these are especially helpful to first-time homebuyers).

    2. Get Preapproved for a Mortgage

    A mortgage preapproval from a lender is a formal estimation of how much you, as a potential homebuyer, are qualified to borrow. This preapproval, which will come in the form of a letter, can speed up the home-buying process by helping you to pinpoint your price range, secure a real estate agent, narrow down potential neighborhoods and motivate sellers.

    3. Narrow your Search

    Once you know approximately how much house you can afford, it’s time to look at the details of where to live and the type of home that can best fit your lifestyle and budget. To get the best idea of what you need, buyers can browse real estate websites, visit potential communities and take advantage of open house events.

    By taking time to prioritize your needs and identify the specifics of how you’d like to live in your new home, you’ll be able to set realistic expectations and narrow down the neighborhoods you’d like to start your search.

    4. Shop with a Real Estate Agent

    You’ve done your homework and determined the types of homes and locations best suited for you and your budget. Now, it’s time to hire a real estate agent!

    While it isn’t always necessary to hire a real estate agent, they can be a huge help. An agent will understand the real estate market and will save you time and frustration by working in your best interest to prescreen properties, ask tough questions about a home’s condition and help with negotiations. Your agent should also be someone who listens and has no problem answering any questions that are asked of him or her.

    Despite working with a real estate agent, it is important to know that should you never feel pressured to rush into a decision.

    5. Make an Offer

    Making an official offer on a home is more complicated than calling up the seller and naming a price you’re willing to pay. This is also a time when having an agent will really come in handy. Because an offer is legally binding, it must be written down and include the details of what you’re willing to pay and the terms of the offer. These terms may include the target date for move in, your down payment, the type of deed that will be granted to the buyer and the method by which real estate taxes, rents, fuel, and utilities are to be adjusted or probated between the buyer and seller.

    Most sellers respond within 24 hours to accept, reject or counter your offer. If a counteroffer is proposed, your agent will recommend a plan and then start negotiations with the listing agent. Once an offer is accepted, you and the seller will be in what’s known as mutual acceptance and will proceed to closing.

    6. Complete a Home Inspection

    Completing a home inspection should always be a contingency to any offer made on a home, as it is an easy and relatively inexpensive way to know the reality of your potential purpose.

    A home may look move-in ready, but an inspector will cover features of the house such as electrical wiring, plumbing, roofing, insulation, as well as structural features of the home and may unveil issues that are not noticeable to the buyer’s eye. Once the inspection is completed, the home inspector will provide you with a report suggesting any improvements or repairs deemed necessary to bring the home up to current standards.

    If potentially expensive flaws or damages are uncovered in the home, you’ll have the opportunity to renegotiate with the sellers for a better price or to back out of the deal.

    7. Secure your mortgage

    While being preapproved for a mortgage will speed up the process, you’ll still need to apply for your mortgage. Even if you have been preapproved, you as a borrower should always shop around for the best rates and terms.

    To secure your mortgage, a lender will need to feel confident that know you’ll be able to repay the loan. At minimum you’ll need to show proof of steady income and provide last year’s W-2 form, approximately two months of recent pay stubs, and your tax returns from the past year. Depending on your income history and the size of the loan, you may also have to show additional paperwork including your earnings outside of your primary employments, debts, assets and recent monetary gifts.

    8. Home Appraisal

    A home appraisal is an important part of securing your mortgage because it assures you and your lender of the property’s value. Unlike a home inspection, a home appraisal does not solely focus on the structure and condition of the home. Instead, a home appraisal estimates the property's approximate value by considering the location of the home, its proximity to desirable schools, the size of the lot, the size and condition of the home itself and recent sales prices of comparable properties, among other factors. This is completed by MCU during the mortgage process.

    9. Obtain Home Insurance

    Because your lender holds a lien on your house until you've paid off your mortgage, they will want to ensure that their (and your) investment is protected. This means that in most cases, you'll need to prove to your lender that you've prepaid one year's worth of home insurance coverage on the home before you can close.

    Among other things, a standard homeowner’s insurance policy will generally protect you against hazards like fire, hail, theft smoke damage, falling objects (like branches) and frozen plumbing. And while the requirements may vary depending on the lender, it’s recommended that you carry enough coverage to pay for the cost of rebuilding your home from the ground up in the event of a disaster.

    10. Close on your home

    You’re almost there!

    A closing meeting is the final step to becoming a homeowner. During this meeting, you and the seller will gather your attorneys, real estate agents, closing agent, lender representative and a notary public to complete the necessary paperwork and final steps.

    As the buyer, you’ll first do a final walkthrough of the home to ensure everything is in order. The seller will then sign certain documents transferring property ownership. You’ll review and sign all your loan documents, provide documentation on homeowner’s insurance and inspections and provide a certified check to cover the down payment, closing costs, prepaid interest, taxes and insurance. Depending on your loan terms, you may also be required to set up an escrow account to cover property taxes and homeowners insurance.

    This is also when your lender will distribute the funds covering your home loan amount to the closing agent.

    Four Reasons to Refinance your Mortgage in 2018

    For many homeowners, refinancing your mortgage could give you the benefits and resources to make home sweet home a little bit sweeter. Check out these reasons to refinance your mortgage in 2018!

    1. Switch to a Fixed-Rate Mortgage.

    Rates are beginning to creep up in 2018 and homeowners with Adjusted Rate Mortgages (ARM) could end up taking on a more expensive monthly payment. By refinancing from an ARM to a Fixed Rate Mortgage (FRM), you could save yourself thousands of dollars throughout the course of your mortgage.

    2. Reach Financial Goals

    A cash-out refinance is a new mortgage that increases from the amount you currently owe. The increase goes to you as cash, which you can use on home improvements, debt consolidation or other financial needs. Cash out refinancing will only work for homeowners who have available equity in their homes.

    3. Drop your Private Mortgage Insurance (PMI)

    According to leading real estate marketplace Zillow, New York home values increased by 10.9% in 2017 and are predicted to rise another 3.6% over the next year! This is great news for homeowners looking to refinance! If the value of your home has significantly increased and/or you paid down your mortgage enough to ditch the PMI, a refinance might save you a lot of money via both a lower interest rate and from the absence of said PMI.

    4. Shorten your Mortgage Term

    Homeowners who want to aggressively pay down their mortgages could benefit by refinancing their 30-year mortgage into a shorter-term loan. In fact, a 15-year mortgage typically saves about 50% in interest over the life of the loan. That means you’ll not only be able to pay your mortgage off a lot faster without potentially breaking the bank, but will also save hundreds or even thousands of dollars in interest you would have otherwise paid throughout a 30-year mortgage.

    The Pitfalls of Buying a Foreclosed Home

    At first glance, buying a foreclosed home may seem like an appealing option to homebuyers. These properties can give you an opportunity to move into a neighborhood that may otherwise be too expensive and give you a chance to take on remodeling projects that suit your style. However, homebuyers (especially first-time homebuyers) should think twice and proceed with extreme caution. These homes are likely to come with pitfalls and complications that will quickly turn a seemingly good deal into an expensive mistake.

    Before you get into the murky business of shopping for a foreclosed home, check out these important considerations.

    1. Neglect can lead to expensive repairs.

    You might be ready to renovate a few bathrooms; install new floors and paint, but it’s important to remember that a home became foreclosed upon because its owners were in financial distress for an extended amount of time. This means that long-term neglect and the absence of even basic maintenance could result in a home needing significant repairs just to make it habitable.

    While foreclosed homes will be in varying states of neglect, damages such as mold, broken pipes, vermin, faulty wiring, water damage and broken appliances are common and can run up an expensive bill.

    Most importantly, potential buyers may not even have a chance to understand the extent of a home’s damage before they have to make a bid. This means you could be getting yourself into a money pit without even knowing.

    2. The previous homeowners could create complications.

    In addition to wear and neglect, it’s not uncommon for disgruntled homeowners facing eviction due to a foreclosure to intentionally devalue the home. Commonly, this includes breaking windows, pouring paint on the floors and breaking the thermostat. They may even remove fixtures such as countertops, vanities and appliances with the intention of making the process as unpleasant and expensive as possible for the homebuyer.

    Current inhabitants can also become problematic if they refuse to leave the property. Legal eviction takes time and money and can delay your home buying plans.

    3. Beware of inheriting unpaid bills.

    Between a down payment; escrow; closing costs and fees, buying a home is an expensive milestone. However, buying a foreclosed home could mean you’ll also become responsible for any debt connected to the home as well. You could be on the hook for unpaid tax obligations, construction loans, unpaid utilities or liens on the property. It’s important to take the time to understand any financial obligations associated with the home and carefully consider what it may mean for you.

    4. The buying and financing process is often frustrating.

    Buying a foreclosed property can be a long and frustrating process with extra paperwork and slow response times. For example, if you’re buying a short sale you’ll be waiting on all parties – including the current owners, the primary lender, and any lienholders – to approve your offer. Occasionally, this process can take months.

    Real Estate Owned (REO) properties, which are in the final stage of foreclosure, can be even more tedious to purchase, especially when it comes to financing. Because conventional mortgages are limited by the appraised value of the property, you’ll often need a lender approval letter saying that you qualify for the amount of the offer you are making. In other scenarios, you might need to use a use a loan product other than a mortgage, as some lenders and financial institutions do not offer mortgages for distressed properties.

    These longer-than-normal processing times can also result in delays in the acceptance of your offer, which can impact financing. Most lenders have time limits on rate approvals. Waiting for a response could result in less favorable mortgage or loan terms if your approval expires and rates increase.

    5. The competition is high.

    From first-time homebuyers to seasoned investors, foreclosed properties attract a lot of interest because of their potential value.

    Homes in the auction stage of foreclosure are particularly attractive to investors because they present the best opportunity to acquire property at a significant discount. However, those who aren’t accustomed with investigating foreclosed homes and are unsure of local property values might find it difficult to compete. Even worse, they may let their emotions get the better of them and end up overpaying for an undesirable home..

    Homeownership and the Tax Cuts and Jobs Act

    The recently passed Tax Cuts and Jobs Act of 2017 (TCJA) is the largest overhaul to the American tax system in 30 years, bringing reforms to tax rates, tax brackets, and tax deductions. While these changes will affect taxpayers across all socioeconomic backgrounds, America's more-than 80 million homeowners may be among the first to be affected by this new legislation.

    If you’re a homeowner or potential homebuyer in the New York area, important tax code changes could affect you. Check them out below!

    1. Limits to Property Tax Deduction

    Limitations to the state and local tax deduction (SALT), which includes property taxes, is one of the most buzzed about changes included in the TCJA. The deduction, which is often one of the most significant for homeowners, often helps push them over the standard deduction, putting more money in their pockets when they receive their tax refunds.

    While the TCJA’s newly imposed SALT deduction limit of $10,000 ($5,000 for married taxpayers filing a separate return) won’t affect all homeowners, it may affect those living in high-tax areas. According to Moody's Analytics, this includes 30 percent of homeowners in New Jersey and nearly 20 percent of homeowners in New York.

    It is important to note that while affected homeowners could be losing out by not being able to fully deduct their expenses, the new higher standard deduction could offset the loss. This means that many may no longer find it financially beneficial to itemize their taxes.

    2. Reduced Mortgage Interest Deductions

    New limitations on mortgage interest deductions may not affect most homeowners but could influence homebuyers shopping in expensive housing markets, including the greater New York area.

    Previously homeowners could deduct the interest on a mortgage up to $1,000,000 (or $500,000 for married taxpayers filing separately). Under the new Act, anyone who takes out a mortgage for a primary home between now and December 31, 2025 can now only deduct interest on a mortgage of up to $750,000 (or $375,000 for married taxpayers filing separately).

    The cap applies to all homes and mortgages. This means if you already have a $750,000 mortgage and want to buy a second home next year you will not qualify to deduct the interest on that loan. However, if you have a $500,000 mortgage and plan to buy a second home, the interest on up to $250,000 of your new mortgage will be deductible.

    Existing mortgages are grandfathered into the previous tax code and current homeowners can continue to deduct the interest on a mortgage up to $1,000,000.

    3. Closing a Home Equality Loan Loophole

    One of the benefits of being a homeowner is the ability to use the equity in your property to cover expenses such as paying for tuition or taking a vacation. However, while home equity loans and home equity lines of credit (HELOC) have historically offered homeowners a relatively inexpensive form of borrowing, these financial products will now go without a once-added advantage.

    Under the TCJA, homeowners will no longer be able to deduct the interest on their home equity-based loan products, something they were previously able to do up to $100,000. This new provision could cost a borrower several hundred dollars a year, depending on the loan amount.

    4. Opportunities in the Housing Market

    Less affordable monthly and annual costs for homeownership in high-tax, high-cost areas are expected to cause home prices to dip. Some experts believe the effects could trickle down to more affordable properties as well, which means opportunities for homebuyers across the board. According to Moody’s Analytics, housing prices will drop an estimated four percent nationwide and as much as 9.5 percent in Manhattan.

    Taxpayers should be aware that the TCJA will affect individuals differently depending on many circumstances. To learn more about how this new legislation will specifically impact your tax situation, speak to your accountant or financial advisor.

    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.

    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.

    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.

    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.

    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

    Rates As Low As:
    Auto Loan*3.25%
    Personal Loan**7.95%
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    30 Year Fixed6.03%
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    IRA 18-Month Variable2.27%
    Share Certificate 36-Month3.04%
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    * This is a discounted rate. The APR for auto loans will increase by .50% after consummation if automatic transfer from your MCU primary share (savings)/share draft (checking)account is cancelled or the transfer is unsuccessful for 3 consecutive payments.

    ** The APR for personal loans will increase by .50% after consummation if automatic transfer from your MCU primary share (savings)/share draft (checking) account is cancelled or the transfer is unsuccessful for 3 consecutive payments.

    *** Annual Percentage Yield
    Visit our Rates page for more information

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    Routing Number: 226078036

    NMLS #:184286

    • ncua Federally insured by NCUA. Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency.