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Learn the Home-Buying Fundamentals from Your Credit Union

Learn the Home-Buying Fundamentals from Your Credit Union By Cyndi Cohen
Published August 17, 2011
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If you are in the market for a home, look to your Credit Union as a trusted resource. In this housing market, there are tremendous opportunities for buyers, especially those with adequate savings and good credit. Interest rates are at an all-time low, home prices have dropped in many areas to very affordable levels and many mortgage financing options are still available for members. With some insider information and guidance from your credit union, you’ll be armed with the knowledge and tools to successfully prepare for one of the most important investments you might ever make. Your credit union may be able to help you take some smart steps today to be ready for the purchase of your future home. According to Freedom Credit Union (Warminster, PA) VP of Financial Services, Anthony Silvi, a lot of excess has been wrung out of the real estate market and the impact of low interest rates will at some point gain traction and cause prices to start rising again. “Members who want to own a home should be working on their plan now by getting their finances in order, checking their credit report, cleaning up any incorrect or derogatory issues and saving toward their down payment,” says Silvi.

Financing & Getting Pre-Approved

Finding the right type of financing that meets your needs and obtaining a pre-approval are key steps in the home-buying process. Franklin Mint Federal Credit Union (FMFCU) (Broomall, PA) offers its members a full line of mortgage products and services which includes free pre-approvals and a first time buyer program along with fixed, variable and adjustable rates, according to Martin Burke, Franklin Mint Federal Credit Union Assistant Vice President, Mortgage Development. “If you’re looking to purchase a new home, now’s the time to do it! Mortgage rates are at an all time low, and values are down to levels last seen in 2001,” Burke advises Members. “Don’t automatically discount an Adjustable Rate Mortgage also referred to as an ARM. Look into these rates because they can be extremely low.” Likewise, Freedom also offers a great fixed rate and lower fees while constantly stressing pre-approvals with their members so there are no surprises when they do find the home that they want to purchase. “They are already a few steps ahead of the next buyer. A buyer with a pre-approval strengthens the offer and shows the seller that you are a serious buyer,” contends Silvi. For first time buyers, Freedom offers maximum financing with as little as 5% as a down payment.

Exploring the Market

It is important for buyers to look around and find out what homes are available in their price range and what the neighborhoods have to offer. To assist members in the market exploration process, both Freedom and Franklin Mint offer CU Realty. The credit unions have partnered with other local credit unions to offer the services of real estate agents throughout the marketplace. Through CU Realty of PA, members can select a trusted agent, view home data and gain valuable information about the location of their new home including school and population demographics. According to Burke, FMFCU teamed up with CU Realty Services to save members hundreds if not thousands of dollars every time they buy or sell real estate due to the reduced commission rate offered by these approved agents. Silvi explains, “In addition to the savings, members are engaging a real estate professional who has been hand-selected by the credit unions to participate in the program.”

Checking Your Credit & Saving for Your Down-Payment

Other essential actions for the prospective home buyer include finding out about their credit and starting to save money. Credit history is important when being considered for a mortgage and buyers will need savings for a down payment and closing costs. Members can get their free credit report at annualcreditreport.com. Many credit unions offer a debt management and/or budgetary counseling service agency that can prepare new home owners for their first purchase. This includes developing a budget and a review of the responsibilities of home ownership. Freedom offers a program known as the BALANCE Financial Fitness Program, for these purposes.

Credit Union Special Services & Seminars

In addition to the more traditional aspects of home-buying services, credit unions often offer extra aides, and do so for free. Freedom offers title insurance from CU Abstract, a full service title agency committed to serving the credit union industry and their members. This title agency offers great service like settling at locations convenient to the member without additional charge, no “junk” fees and guarantees that the member will get all applicable premium discounts available for their transactions. “A title agent from CU Abstract handling your loan closing is like having the credit union with you at the settlement table with their “member’s first” philosophy,” says Silvi. In the same vein, to help prepare members for their home buying experience, FMFCU offers free, periodic home buying seminars in their branch offices that cover various mortgage-related topics, explains Burke. The benefits of home ownership are numerous, and if you’re a borrower who has been responsible with your credit and sensible in terms of saving, your credit union can help you reap those benefits. Visit your credit union’s website for home-buying information and online tools, or stop by a local branch to speak to a mortgage expert. Your ultimate home-buying and real estate resource might be right in your neighborhood, waiting to help!

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