HOME BUYER’S GUIDE Turn your homeownership goals into a reality.
Welcome! WE’RE GLAD YOU’RE HERE.
Buying a home can be exciting and rewarding, but it’s a complex process that can be overwhelming! Our team of mortgage and home buying experts at City & County Credit Union are here to help provide you with the education, guidance, and tools you need to buy your dream home with confidence. This guide will walk you through every stage of the home buying journey – from preparing your finances to signing your documents on closing day. You’ll learn: • All you need to know about home loans and how they work • How to determine which home loan best suits you & your needs • What you need to qualify for your home loan • House hunting tips and special programs to save you money – offered exclusively for City & County Credit Union members
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Table of Contents Mortgages 101 . . . . . . . . . . . . . . . . . . . 4 Your Monthly Payment . . . . . . . . . . . . . . 5 All About Insurance . . . . . . . . . . . . . . . . 6 Private Mortgage Insurance Cancellation . . .
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Prepare Your Finances . . . . . . . . . . . . . . 8 Credit . . . . . . . . . . . . . . . . . . . . . . . . 9 Down Payment . . . . . . . . . . . . . . . . . . 10 Income . . . . . . . . . . . . . . . . . . . . . . . 11 Assets . . . . . . . . . . . . . . . . . . . . . . . .13 Pre-Qualification vs. Pre-Approval . . . . . . .14 Choosing a Realtor . . . . . . . . . . . . . . . .15 Choosing a Home . . . . . . . . . . . . . . . . .16 Shopping for a Home . . . . . . . . . . . . . . 18 Inspections, Appraisal & Walkthrough . . . . .19 Closing Day . . . . . . . . . . . . . . . . . . . . 21 We’re Here to Help . . . . . . . . . . . . . . . 23 Mortgage Terminology Glossary . . . . . . . . 24
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Mortgages 101 What is a mortgage & what are the different types? A mortgage is an agreement between you and a lender that allows you to borrow money to purchase or refinance a home. The agreement gives the lender the right to take your property if you fail to repay the money you’ve borrowed. This is because a mortgage is a secured loan.
There are three types of home loans: • Conventional: A conventional loan is a type of home loan that is not guaranteed or insured by the government. Private lenders, like credit unions or banks, make conventional loans. These loans tend to have the best interest rates and are loaned to people with high credit scores and steady income. The average down payment requirement is a minimum of 3%. • FHA Loan: Federal Housing Administration mortgages, also known as FHA mortgages are federally insured by the government. They are designed to help first time home buyers as the credit score requirements are more lenient and typically require a smaller down payment amount. • VA loan: A VA loan is a mortgage loan that is guaranteed by the United States Department of Veterans Affairs. VA loans are a benefit for service members, including surviving spouses. VA loans often have lower interest rates and require little to no down payment without mortgage insurance. Borrowers can expect to pay a funding fee, which costs 1% of the total loan amount.
Fixed Rate vs. Adjustable Rate Mortgage: A fixed rate mortgage has an interest rate that will not change. The rate remains the same from the day you take out the mortgage through the life of the home loan. Why is this important? Because you can lock in a low rate without having to worry about a fluctuating market. An Adjustable Rate Mortgage has an interest rate that can go up or down. This often is identified as a riskier type of loan for borrowers because although your interest can decrease based on market conditions, it can also increase.
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Your Monthly Payment Once you decide the type of mortgage that best suits your needs, you’ll want to determine how much you want to spend on your monthly payment. A mortgage payment includes four parts: Principal, Interest, Taxes, and Insurance.
Principal: The amount that you pay each month that goes towards the original amount of loan (the money you’ve borrowed) over the course of your term (15 years, 30 years, etc.)
Interest: In addition to the principal payment, borrowers are also charged an additional amount of money each month that goes toward interest (the cost of borrowing the money.)
Taxes: Each year, county assessors will determine the value of your home, which will affect how much money you will pay in property tax. The property tax is usually based on the property location and how much it’s worth. Property taxes are one of the most important considerations when choosing a location for your home. High tax rates can have a significant impact on your monthly mortgage payments. Including your property tax savings can be either optional or required based on the requirements sent by your lender. This is called an Escrow account.
Insurance: Depending on the size of your down payment and the type of mortgage you take out, you may be required to pay mortgage insurance. Your lender may also require you to carry homeowners insurance.
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All About Insurance Your home is a major investment that should be protected. Insurance policies help to limit your financial burden if something unexpected were to happen, and it protects what you care most about – valuable items and your loved ones.
Home Owners Insurance Homeowners insurance will cover losses and damage to your property, if something catastrophic occurs, such as fire, wind damage, or theft. Standard homeowners insurance doesn’t cover damage from earthquakes or floods, but a lender may require that you add this coverage depending on your home’s location. Your home lender will want to make sure your property is protected by homeowners insurance, and you will be required to provide proof of insurance before the loan is funded. You can choose any insurance provider of your choice, but know that your mortgage loan officer can always provide a recommendation based on your needs.
Private Mortgage Insurance Private Mortgage Insurance (PMI) is insurance meant to protect lenders against loss if a borrower stops paying their mortgage loan. PMI is usually required when your down payment is less than 20% of the value of the home you are purchasing. This is typically added to the monthly mortgage payment. The type of mortgage insurance you’ll pay depends on the type of home loan: • FHA-insured loans require a mortgage insurance premium (MIP) • VA loans require a funding fee • Conventional loans can be insured with private mortgage insurance (PMI)
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Private Mortgage Insurance Cancellation Under the homeowners protection act, borrowers can expect cancellation of private mortgage insurance when the loan is paid off or under these two categories – automatic mi cancellation and member initiated cancellation. To cancel mi under the two categories, you must meet the below requirements.
Automatic MI Cancellation
Member Initiated Cancellation
• Loan reaches 78% loan to value based
• Loan reaches 80% loan to value
on original value
based on original value
• Member current on payments
• No property value decline
• Servicer can no longer require borrower to
• Member makes a written request for
pay MI premium
cancellation to servicer • Good payment history • Current on payments
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Prepare Your Finances The first step in your home buying process is to prepare your finances. Preparing your finances is one of the most important steps in your home buying process because it helps your lender determine if you will qualify for a home loan. Your lender will look at a variety of information to determine whether you’ll qualify, but they will mainly focus on these four areas: credit, down payment, income, and assets.
Credit It all starts with your credit score. Your credit score is the first metric lenders will look at to determine if you qualify for a home loan. Lenders estimate your ability to pay back money borrowed based on your credit score. A high credit score can result in a lower interest rate and save you thousands of dollars in interest paid over the life of the loan.
360-560
560-650
650-700
700-750
750-850
VERY BAD
BAD
FAIR
GOOD
EXCELLENT
Your credit score can range anywhere from 300-850. A strong credit score is generally considered to be 700 and above and a poor credit score is below 600. A high credit score can result in a lower interest rate and save you thousands of dollars in interest paid over the life of the loan.
Credit Reporting Agencies In the United States, there are three Credit Reporting Agencies (CRA): Equifax, Experian, and TransUnion. The CRAs collect consumers’ information and sell it to lenders when they are deciding whether they will approve or deny your loan request. These three CRAs own the rights to the FICO calculator, the tool that is used to determine your credit score.
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PREPARING YOUR FINANCES
Credit
How your Credit Score is Calculated Your credit score is made up of five different elements: payment history, amounts owed, length of credit history, credit mix, and new credit. Payment History Your payment history makes up of 35% of your credit score. This element has the biggest impact on your credit score because it shows your lender how trustworthy you are and how likely you are to repay the money you borrow. Amounts Owed Your amounts owed makes up 30% of your credit score. This element makes up a large portion of your score because your lender wants to make sure you are using your credit cards and loans as a tool. As a rule of thumb, we recommend you use 30% or less of your total credit card limit each billing cycle. Length of Credit History The length of your credit history makes up 15% of your credit score. A longer credit history has a positive impact on your credit score because it give your lender a clear picture of your payment history. Tip: Keep your first credit card open as long as possible because it is the longest piece of your credit history! Credit Mix Your credit mix makes up 10% of your credit score because your lender wants to see that you have experience with the two types of credit: installment and revolving. The difference between installment & revolving credit is payment terms. With installment credit, your lender sets the monthly payment amount (i.e. mortgage, auto loan, etc.). With revolving credit, your lender will give you a total monthly limit, but you decide how much of the limit you plan to use (i.e. credit cards) and it’s your responsibility to track how much you spend each month. New Credit Any time you apply for new credit, your credit score will drop by a few points. It’s important to make thoughtful decisions about how often you borrow or open new lines of credit because applying for new credit make up 10% of your credit score
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PREPARING YOUR FINANCES
Down Payment Your down payment requirement may vary depending on your home loan program. We recommend having 3% to 20% of the purchase price to use as your down payment. The larger the down payment you have, the lower the cost of your monthly payment. At City & County Credit Union, your home ownership goal is our top priority. We make our mortgage process simple and transparent so you can focus on the biggest task on hand finding your dream home. Our Mortgage Team puts you and your needs first by offering a free pre-approval, no hidden fees on mortgages, and down payment as low as 3% to help make home ownership affordable.
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PREPARING YOUR FINANCES
Income
Lenders will look at your employment history to verify your past two years of work. They’ll be looking to see
MONTHLY EXPENSES
if your income is stable and consistent and that you have the ability to maintain employment. If you are selfemployed, you will need to supply at least two years of tax returns as proof of income. Lenders will also look at your debt-to-income ratio (DTI). DTI is calculated by dividing total recurring monthly debt
PRE-TAX INCOME
(car loans, student loans, credit card debt, etc.) by gross monthly income (income before taxes are taken out), and your DTI is shown as a percentage. Lenders typically want to see that you are spending less than 43% of your gross monthly income on debt,
= DEBT TO INCOME
including your new home loan payment, property taxes, association dues, and homeowners insurance. Variable expenses like utilities, phone, and cable are not included in your DTI.
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PREPARING YOUR FINANCES
Debt to Income Monthly Take-Home Income You
Spouse
Outstanding Monthly Debt Payments Total
You
Salary/Wages
Credit Card Pmts
Social Security
Student Loans
Military Pay
Car Payments
Pension/Retirement Income
Recreational Vehicle/ Boat Payments
Bank and Investment Interest
Bank/Credit Union/ Loan Payments
Alimony
Med/Dental Bills
Rental Income
Computer/Electronic Bill Payments
Unemployment Food Stamps Royalties
Other Credit Loans or Accounts
Business Income
Other
Other
Other
Other
Total Monthly Pmts
Spouse
Total
Total Income
How do you measure up for the creditors?
Calculation Key Monthly Debt Payment (divided by)
/
Monthly Income (equals) Debt-to-Income Ratio
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Less than 10% 10 - 20% 21 - 35% 36% - 43%
Excellent Great Good Fair
43% and higher
Risky
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PREPARING YOUR FINANCES
Assets
Lenders will verify that the funds you are using for your down payment are in a liquid (readily available cash) account, like a checking or savings account. Lenders may also want to see proof that you have a “financial cushion” to handle emergencies or unforeseen expenses. As a rule of thumb, you should have 2 to 3 months of house payments in your checking or savings account after closing on your home. Aside from getting your paperwork ready for your lender, you’ll also want to make sure you know your maximum monthly house payment – including your mortgage, property taxes, and insurance. We recommend that your mortgage, insurance, and taxes combined should stay between 25-30% of your monthly income after taxes. Most importantly – your monthly house payment should fit into your budget. Don’t just take your approved amount as your shopping limit. Look at your finances and do your own math to see if you can afford the monthly payment.
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Pre-Qualification vs. Pre-Approval Once you have you reviewed your finances and decide to move forward with the home buying process, you’ll want to meet with your lender to get pre-qualified or pre-approved. You may be wondering, what’s the difference between pre-qualified or pre-approval?
PRE-QUALIFICATION
PRE-APPROVAL
A pre-qualification will give you an
A pre-approval is when the lender agrees
estimate of what loan amount you’ll likely
to loan you a set amount of money for
get approved for with your lender.
a mortgage after they have verified your financial information. If you are preapproved, your lender will provide you with a preapproval letter that is good for 90 days and shows sellers that you are a serious, reliable buyer when you make an offer on homes. In a competitive market, we recommend placing an offer on a home with a pre-approval vs a prequalification.
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Choosing a Realtor Before you start to look at houses, you’ll want to find a realtor and make a list of your musthaves for your dream home. This will help you narrow your search and only look at homes that fit your criteria and meet your needs.
Choose a Realtor Most buyers choose to work with a realtor to guide them through the home buying process because buying a home is a big financial investment. Your realtor will help you set up home tours, negotiate with sellers, and will serve as your home buying expert. The buyer often pays real estate agents on commission, which is usually 2-6% of the home sale price. If you are looking for a realtor, we recommend you interview at least three real estate agents to find someone who is knowledgeable about the home buying process and makes you feel comfortable. Another way to find a great agent is through a referral if you have friends or family that have recently purchased a home. Remember – your realtor works for you! It’s okay to switch relators if it’s not the right match.
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Choosing A Home Location, location, location! Before you begin looking at homes, it’s important to choose a location that makes sense for your lifestyle now and in the future. When you are narrowing your location, consider the following: • Commute time to and from work • Quality of school districts if you have a family or are planning to start a family • Access to local shopping & businesses • Crime rates • Noise & traffic
Property taxes Property taxes are another important consideration when choosing a home location. High property tax rates can make a big impact on your monthly mortgage payments. Historical tax records for properties can be found online and should be included in your budget when shopping for homes.
Amenities Higher tax rates in local communities are often used to fund improvements to public amenities, like parks, trails, schools, and rescue resources. If these amenities are important to you and your family, the tax premium may be worth the monthly cost.
Home Features Once you have decided on your location, it’s time to start thinking about the features you’d like in your home. Your home “must-haves” list will vary depending on you & your family’s needs, but some features to consider are: • What home type is best for you– single family, condo, or townhome? • How many bedrooms and bathrooms do you need now and in the future? • What size garage do you need and how many stalls would you like? • Do you want an outdoor gathering space for entertaining? • Do you want a move-in-ready house or a fixer-upper that you can make your own? If you decide to purchase a fixer-upper, remember to add the cost for repairs and remodeling improvements into your monthly budget. Once your “must-have” list is created, share it with your realtor. They will use your list to help you find the perfect home for you & your family.
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Choosing A Home Home Wish Checklist Use this checklist to help determine the elements that are important to you as you look for a property. Print the checklist and use the notes and reminders space to write down other desired features.
Financial Details
Home Style
Amount you’d like to spend:
Number of stories: Architectural style:
Home Type
Interior Features
Exterior Style
New
Family room
Wood Siding
Older
Formal living room
Vinyl Siding
Single-Family
Formal dining room
Aluminum Siding
Townhome
Laundry/utility room
Stucco
Duplex or Bi-attached home
Mudroom
Stone
Condominium
Office
Brick
Manufactured or Mobile Home
Finished Basement Attic/Other Storage
Exterior Features
Energy & Infrastructure Special energy-saving features
Number
Yard
Warranty
of bedrooms:
Garage (attached)
On Sewer Line Municipal Water
Garage (detached) Number
Garage (1-2 vehicles)
of bathrooms:
Garage (3 or more vehicles) Hot tub/spa/swimming pool
Notes & Reminders
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Shopping for a Home Shopping for your home & making an offer After you get all of the prep work out of the way, now comes the best part. Shopping for your new home. You realtor will send you homes that meet the criteria in your “must-haves” list and will set up showing times for your to view the homes in person before making an offer. Besides setting up showings through your realtor, you can also visit open houses in your desired location to check out other properties.
Making an Offer Once you’ve found your dream home, it’s time to make an offer. You’ll work with your realtor to write the offer and this will be the time to negotiate the price and contingencies (i.e. passing inspection) to your offer. Your realtor will send the offer to the sellers and they will accept the offer, send you a counteroffer, or decline the offer.
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Inspections, Appraisal, and Walkthrough Once your offer has been accepted on a home, it’s time for the inspection, appraisal, and final walkthrough.
Inspection Once your offer has been accepted, you’ll want to schedule a home inspection. Your inspector will examine the property from top to bottom to see if there are any minor or major issues. Spending a few hundred dollars on an inspection fee could save you thousands of dollars in repairs down the road. Once the inspection is complete, your inspector will send you their results. If there is any major damage found during the inspection, you can use this to negotiate a lower price with the seller.
Appraisal In addition to your inspection, you’ll also need an appraisal. An appraiser will inspect your house to make sure that the purchase price is a fair market value for the home. In simple terms – their job is to make sure you aren’t overpaying for the home. The appraiser’s inspection is not as detailed as the inspectors, but they will take damage and defects into account. When determining fair market value for your home, the appraiser may pull county records and recent reports from the local real estate multiple listing service to compare prices with other homes in the area. Your cost for the appraisal fee will be included in your closing costs.
Final Walkthrough Your realtor will schedule your final walk-through a few days before your closing date. This is your time to walk through the property to verify its condition and ensure repairs have been made. During your walkthrough, keep an eye out for any new issues, damage from the sellers, and missing fixtures or appliances.
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Inspection Checklist Inspection Checklist MAJOR SYSTEMS
PATIO
BASEMENT
BATHROOM(S)
Heating
Cover
Access
Exhaust fan
Air conditioning
Enclosure
Stairs
Heating
Electrical service
Deck/slab
Joists
Tub and enclosure
Ducting
Stairs
Water drains
Water pressure
Plumbing
Railing
Rodents
Electrical
Foundation/slab
Tub faucet
Support posts
Shower and surround
Ventilation
Shower door
Water pipes/meter
Shower faucet
Gas pipes
Sink and faucet
Drain/waste vent Sump pit Water heater Venting Fireplace
GARAGE Exterior Roof Slab Garage door
Traps/drains
EXTERIOR
Garage door hardware ATTIC
Driveway
Door opener
Insulation
Walks
Windows/screens
Ventilation
Fences/gates
Access door
Roof boards
KITCHEN
Siding
Fire door
Rafters or trusses
Cabinets
Trim
Fire wall
Rodents
Countertops
Gutters/downspouts
Walls
Sprinklers Housebibs Exterior doors Bell/chime Chimney Lot grade drainage Gas meter Foundation Roof
LAUNDRY AREA
ALL ROOMS
Cabinets
Floor
Exhaust fan
Walls
Laundry tub
Ceiling
Washer hookup
Windows/screens
Dryer hookup
Electrical
Water pressure
Closets
Gas piping
Heat supply/fireplace
Electrical
Toilet Counter/cabinets
Sinks/faucets Traps/drains Disposal Dishwasher Stove/cooktop Oven hood/fan Microwave Water pressure Electrical
Some large inspection companies also offer environmental inspections. They can check for radon, asbestos, formaldehyde, lead paint, lead plumbing, underground storage tanks, and energy efficiency. These inspections are costly; however, it could keep you from buying a house that will cost you far more in repairs or health concerns down the road.
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Closing Day Congratulations - you’ve made it to closing day! You’ve found the perfect home and your offer was accepted. Now it’s time to sign the paperwork!
Before Closing Day It typically takes 30-45 days to close on your home from the date your offer is accepted. During this time, your home inspection, appraisal, and underwriting (the process of writing the loan) will take place. Before your closing day, your lender will send you a closing disclosure. This will outline the total amount that is due on closing day and the terms of the loan – make sure to review this carefully to verify that everything is correct.
On Closing Day Closing day is the last step in your home buying process. It’s the day when you sign your loan paperwork, pay for the home, and get the keys to your new home! On closing day, you can expect to spend about 1 hour or more signing your loan paperwork. On closing day, you’ll transfer the funds for your down payment and pay closing costs, which are fees and expenses charged by lenders and third parties. Most of the time, the homebuyer pays for the closing costs. Sellers may pay a portion of the closing costs depending on the loan type and negotiations with your realtor.
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Closing Day What’s included in your closing costs. Closing costs may vary by location and property type. Typically, buyers can expect to pay about 3% of the home purchase price in closing costs – this is separate from your down payment.
Closing costs may include: • A loan origination fee, the fee lenders charge for making the loan • Discount points or fees you pay in exchange for a lower interest rate • Underwriting processing and document fees for the cost of evaluating a home loan application • A credit report fee • Appraisal fee • Tax service fee to monitor if property taxes have been paid on time • Escrow fees • Title search fees to make sure there are no unpaid mortgage tax liens or judgments against the property • Title insurance, which protects you and the lender in case the title isn’t clear • Recording fee, which is paid to a city or county in exchange for recording the new land records • Pest inspection fee • Charges for inspections required or requested by the lender or you • Escrow deposit, which may pay for two months of property taxes and PMI Once your paperwork has been signed and closing costs have been paid, you will be given the keys to your new home. Congratulations!
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We’re Here to Help Work with our team to explore your home loan options. We will expertly guide you through the home loan process of selecting the loan that best fits your goals, getting pre-approved, completing each step in the mortgage process, and assisting you through closing. From new & refinanced loans for homes, investment properties, cabins, and vacation homes – we’re happy to help. Contact our mortgage team at mortgageteam@cccu.com or (651) 225-2729 to get started.
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T.J. Trembley
Tina Hagen
Director of Mortgage Services NMLS ID: 381711
Mortgage Loan Officer NMLS ID: 1057827
Email: TJ.Trembley@cccu.com
Email: Tina.Hagen@cccu.com
Office: (651) 288-5717 Fax: (888) 972-7074 Cell Phone: (612) 263-3254 1659 Cope Avenue East Maplewood, MN 55109
Office: (651) 288-5726 Fax: (888) 972-7074 Cell Phone: (651) 724-5577 1659 Cope Avenue East Maplewood, MN 55109
Kristin Kulla
Craig Barsness
Mortgage Loan Officer NMLS ID: 479250
Mortgage Loan Officer NMLS ID: 479251
Email: Kristin.Kulla@cccu.com
Email:Craig.Barsness@cccu.com
Office: (763) 764-6960 Fax: (763) 764-6973 Cell Phone: (612) 791-3712 10653 Wayzata Blvd Minnetonka, MN 55305
Office: (763) 764-6907 Fax: (763) 764-6973 Cell Phone: (612) 791-2978 10653 Wayzata Blvd Minnetonka, MN 55305
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Mortgage Terminology Glossary Amortization
FHA
A loan is repaid in equal installments, calculated over
The Federal Housing Administration (FHA) is a
the term or life of the loan. In the early years, most of
United States government agency created in part by
the loan payment is applied to interest, while in the
the National Housing Act of 1934. It sets standards
latter years, most of it is applied to the principal.
for construction, underwriting, and insures loans made by banks and other private lenders for
Debt-to-Income (DTI)
home building.
A debt-to-income ratio (DTI) is one way lenders measure an individual’s ability to manage monthly
Loan Payment = Principal + Interest + Taxes +
payments and repay debts. DTI is calculated by
Insurance (PITI). May also include PMI.
dividing total recurring monthly debt by gross monthly income, and it is expressed as a percentage.
Loan-to-Value (LTV)
EXAMPLE: $3,000 monthly debt (including
A term used to express the ratio of a loan to the
new housing payment) / $7,000 gross income
value of an asset purchased. The term commonly
3,000/7,000 =.4285 = 42.85% DTI
represents the ratio of the first mortgage balance as a percentage of the total appraised value of a house
Earnest Money
and/or land.
Money paid to confirm a contract. In the case of
EXAMPLE: $350,000 loan amount / $400,000
a Mortgage Contract, it is a good-faith amount of
home value = 350,000/400,000 = .875 = 87.5% LTV
money given with the acceptance of a Purchase Agreement.
Mortgage Insurance Premium (MIP) for FHA loans Similar to Private Mortgage Insurance
Escrow
but specifically for FHA originated loans. MIP will
The portion of a mortgage payment that is
include an upfront fee at closing & a premium on
designated to pay for property taxes and hazard
monthly payment.
insurance. It is an amount “over and above” the principal and interest portion of a mortgage
Points / “paying points”
payment. Since this can fluctuate, the mortgage
One point is equal to 1% of the loan amount, or
servicing company will make the insurance and tax
$1,000 for every $100,000. Points are fees paid
payments on your behalf. What you owe is shared on
to the lender at closing in exchange for a reduced
your mortgage statement.
interest rate, which will lower your monthly payment.
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Glossary Private Mortgage Insurance (PMI)
Rate lock / “lock my rate”
Private mortgage insurance is a type of mortgage
A signed agreement between a borrower and a lender
insurance used with conventional loans. Like other
that allows the borrower to lock in the interest rate on
kinds of mortgage insurance, PMI protects the lender
a mortgage over a specified time period at the market
if you stop making payments on your loan. When
interest rate and that the buyer is willing to pay.
you make a down payment of less than 20%, the lender requires private mortgage insurance or PMI.
Title Work, Title Insurance
The policy protects the lender from losing money if
Ownership transfer history for a property.
you end up in foreclosure. PMI also is required if you refinance the mortgage with less than 20% equity.
Underwriting In the United States is the process a lender uses to
PMI continued
determine if the risk of offering a mortgage loan to
Benefits for Buyers: PMI enables buyers who can
a particular borrower under certain parameters is
afford monthly mortgage payments to purchase a
acceptable. Most of the risks and terms that Mortgage
home, even if they do not have a large down payment.
underwriters consider fall under the three C’s of
According to the Center for American Progress Action
underwriting: credit, capacity, and collateral.
Fund (CAPAF), “Among families earning between $20,000 and $50,000, those who own homes have 19
VA
times the wealth of those who rent.”
Veteran’s Affairs (VA) loans offer up to 100% financing on the value of a home. To qualify for a VA loan,
Purchase Agreement
borrowers must present to the lender a certificate of
A purchase agreement (PA) is a legal contract that
eligibility, which establishes their record of military
obligates a buyer to buy and a seller to sell the
service.
property. PAs are found in all types of businesses but are most often associated with real estate deals as a way of finalizing the interests of both parties before closing the deal.
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MORTGAGETEAM@CCCU.COM (651) 225-2729 CCCU.COM