Lets Talk Mortgages | Navy Federal Credit Union

[MUSIC PLAYING] KEVIN: Hi, I’m Kevin. RASHALON: And I’m Rashalon. KEVIN: And we’re here today
to talk about mortgages. MEMBER 1: What are the
overall benefits of a VA loan? Can closing costs be
rolled into the loan? And does Navy Federal
offer VA loans? RASHALON: First off, yes. We do offer VA loans. And some of the benefits include
100% financing in most cases. The interest rates
are much lower than if you were to go with
conventional financing. And also, there’s no monthly
private mortgage insurance premiums to pay,
which is really great. So regarding closing costs,
especially on purchase loans, they cannot be rolled in. However, a funding
fee may apply, and that can be rolled in. MEMBER 2: How are closing costs
calculated, and is the closing cost amount affected
by the type of loan? For example, VA, FHA,
or conventional loan. Is there a way to avoid PMI? KEVIN: We got this
question a lot. And for those first
time home buyers wondering what
are closing costs, these are the fees associated
with your home’s purchase price that are paid on the day
you go to settlement. Now typically closing costs
are going to be 2% to 4%, and that can vary based on your
home’s location, product, as well as other factors. One way to keep your
closing costs lower is looking for lender fees when
you’re shopping for a mortgage. These lender fees can quickly
add up to thousands of dollars. MEMBER 3: Other
than credit score, are there any specific
qualifications needed to secure a Navy
Federal mortgage loan? RASHALON: That’s
a great question. And for the most part,
lenders particularly focus on three factors that
affect your credit rating called the three C’s of credit. The first C is character. And with character, it’s taking
a look at your overall credit history and how you handle your
current financial obligations, and will those traits
continue as you acquire new debt or that new
monthly mortgage payment? The second C is capacity. And with capacity, that’s
your ability to repay. So we’re looking at what’s
called a debt to income ratio, and that’s your income in
relation to your debts. So we’re looking
at stable income and if it will support your
current obligations along with the new mortgage payment. And the third C is capital. And with capital,
those are your assets being used towards the
mortgage as well as collateral that’s being
used to secure the mortgage. So with assets, those are things
like your savings accounts, your investment accounts. KEVIN: It could even mean your
retirement account, right? RASHALON: Absolutely. Retirement accounts, or
even personal property like your car, or if you
own any other real estate, and even the real estate
that’s securing the mortgage. So that’s why we pull an
appraisal to verify the value. And we’re also
looking at the home to make sure it meets property
condition requirements. We also have what’s called
Common Sense underwriting. We understand that
life events may occur, and so we will consider
your entire unique financial picture. MEMBER 4: Can you please explain
the benefits of refinancing my current loan, and what is
the best way to accomplish this? KEVIN: One of the immediate
benefits is access to equity. Now this doesn’t have
to mean cash on hand. It could mean
leveraging your equity to pay off other high interest
rate debt such as credit card, auto loans, student loans,
or even combining two or three mortgages into one. I know we did receive
a lot of information during our Q&A
session with inquiries about combining a
HELOC or a fixed equity into their mortgage. You’ll want to take
into consideration things such as your monthly
mortgage payment, closing costs, as well as how
quickly you’ll break even on those costs of refinancing
your home to determine what makes the most financial sense. To begin this process,
you can give us a call, stop by a local branch, or
visit us on NavyFederal.org. MEMBER 5: What are
the qualifications for 100% financing? Does Navy Federal
offer 100% financing? RASHALON: Yes. We offer several zero money
down product offerings like the VA loan, Home
Buyers Choice, and a couple of adjustable rate mortgages. KEVIN: And what about PMI? RASHALON: Well,
the great news is that there’s no private mortgage
insurance on those products. In addition to that,
regarding the qualifications we spoke about earlier, we
have in-house underwriters that can quickly determine
your qualifications. MEMBER 6: What are the steps
I should take before getting pre-approved for a home? When should I start the process? KEVIN: Whether upgrading or
purchasing your first home, the home buying process is an
exciting and important time, and you’ll want to make sure
that you follow these three simple steps before
starting your journey. One, review your credit report. It’s free, and many
consumers don’t know that you’re entitled
to one free credit report every 12 months. To get yours, visit
AnnualCreditReport.com. Two, know your budget. Understand how much you can
pay in a mortgage to help identify how much
home you can buy. One tip, though. Avoid any large purchases
during this process. Any large purchases
such as furniture you’ll want to make after you
buy your home, as doing it during the process could
impact any qualifications. And three, visit your local
trusted mortgage advisor and begin those discussions
around home ownership. They can assist you in
the qualification process. As far as when to start the
process, it’s never too early. However, beginning six months
before you start your journey is good. This will give you enough time
to get your finances in line before the preapproval and
home search process begins. RASHALON: Thank
you for watching, and we hope you found
this insightful. For more information,
please visit our website at NavyFederal.org and
MakingCents.NavyFederal.org. [MUSIC PLAYING]

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