Understanding the Mortgage Process – 11/3/2020
Most would agree – home ownership is part of the American Dream. And, more often than not, securing a mortgage is a part of that process. However, many Americans are not as familiar with mortgages as they should be.
According to Bankrate, in a recent “Consumer Mortgage Understanding Study” by Fannie Mae, 91% of the more than 3,600 respondents prefer owning a home to renting, but are still largely unaware when it comes to home-buying basics.
More than 40% of survey respondents revealed they do not know the minimum upfront cost to purchase a house. Most overestimated the actual amount. What’s more, 17% of respondents knew the correct amount for a down payment, which is between 1% and 5%. Another 20% of respondents believed the correct down payment was 6% and 10%.
FICO scores are important when trying to qualify for a home loan, but according to the survey, 43% of Americans were unaware of what their number was and more than half (53%) of survey respondents did not know the minimum credit score required for a mortgage. FICO score requirements vary by loan type and lender, but scores as low as 580 are often acceptable.
The mortgage process can feel complicated to consumers, mainly because the transaction is done so infrequently. The lack of financial education among Americans, however, is a major contributor to misinformation concerning mortgages. Staying informed about your own financial credentials is just as important as having a general knowledge of mortgages.
Tips for navigating the mortgage process
Understanding the mortgage process is no easy feat, but it’s necessary to learn before becoming a homeowner. Financial education is key to figuring everything out, so here are some practical tips for navigating the process in a simple step-by-step format. Learn more details about the mortgage process from credit.com.
- Do your homework – Check out reputable lenders in your area and get pre-qualified so you know the price range in which you should be shopping. Colorado Credit Union has an on-site mortgage team ready to assist you. Learn more in our Mortgage Shopping Took Kit (PDF- 1566KB) or to apply online.
- Know the numbers – Find out what current average mortgage rates are to help determine what you can afford. Don’t forget to calculate fees including homeowner’s insurance and local property taxes in addition to a monthly mortgage payment. Call 303.978.2274 for our current mortgage rates.
- Know and understand your credit score – When applying for a loan, lenders look at your FICO scores to help determine your credit risk and the interest rate charge on your home loan. You have three, one from each of the major credit bureaus -- Equifax, Transunion and Experian. Keep in mind, any changes to your credit scores or reports could potentially derail the loan process. Find more information about credit scores and how your score is determined.
- Get to know your local credit union – Never underestimate the value of a close relationship with your credit union; it could positively influence your mortgage rate. There are many advantages to choosing a credit union as your lender, but none are as important as having an established, face-to-face relationship with your financial institution.
- Get pre-approved – While pre-qualification gives you a sense of financial readiness and can be done over the phone or online, a preapproval takes it to the next level by requiring proof of your financial history and stability. You will be asked to provide a variety of documents, which will verify your assets and debt, income, employment and credit standing. You do not need to be pre-approved to make an offer on a house, but your extra level of commitment and preparedness might give you an edge with a seller should they receive multiple offers, or if they’re simply ready to move quickly.
- Lock in your rate and terms – Once you’re pre-approved, it’s time to lock in the terms of your mortgage loan, as well as your rate. Locking in your rate and whether it’s fixed or adjustable, as well as how long the loan will last, takes away the risk of changing rates, which can happen daily. This also commits your lender to funding your loan at the specified rate.
- Make an offer! – Once you’ve been pre-approved and locked in your rates, you are free to make an offer on your new home!
Want to learn more about Colorado Credit Union’s mortgage process? Call us today at 303.978.2274 or visit our mortgage page.
Source: Mountain West Credit Union Association - www.mwcua.com
CCU's Story - 11/1/2020
Did you know that credit union pioneers from around the United States met up in Estes Park, Colorado for the purpose of creating a National Credit Union Organization? The Constitution and Bylaws were signed on August 10, 1934. That same year, the Federal Credit Union Act was signed by President Franklin D. Roosevelt. This helped promote thrift, savings, made credit available to not-for-profit credit unions and allowed for credit unions to be chartered under federal or state law. This was huge. Our story began just 39 years later.
Delighting members by providing lifelong value. This is our mission and we wouldn’t be here today if it weren’t for 35 caring, passionate individuals. Back in 1973, 35 Johns Manville employees came together to help each other out by gathering their funds that started our credit union as a member-owned financial cooperative, originally named Johns Manville Federal Credit Union. This was just the beginning. We started out serving only employees, retirees and the family members of Johns Manville.
One of our values is people helping people which led us to expand our membership in 1998 to include other employer groups and local communities. This expansion allowed for our credit union to continue to grow and help our members achieve their financial goals by providing excellent service while guiding them through their financial journey. With our membership field expanding, we decided to change our name to better represent our members and identity.
In 2005, we changed our name to Colorado Credit Union. We couldn’t think of a better name to represent our credit union and our members. In 2009, our membership was thriving and we expanded into the Brighton community through merging with Brighton Federal Credit Union. As of today, we are proudly serving more than 19,000 members, employer groups and communities in Colorado.
In late 2019, we were thrilled to announce a new logo, colors and tagline for Colorado Credit Union. Our name, values and principles remain the same as we refreshed our look to better represent who we are. Our new logo strongly connects and represents Colorado’s natural beauty and symbolizes guidance, exploration and stewardship. The “C” represents our strong bond with our state. The mountains, which is the outline of Maroon Bells located in Colorado, represent strength and stability while the eagle is a symbol of courage and freedom.
The new yellow color is for our warmth, optimism and growth. The blue has a deeper connection to our brand as it is the same color blue as Johns Manville. Our new tagline, “Love Where You Live, Love Where You Bank” is a statement of how our membership feels about our state and Colorado Credit Union.
Colorado Credit Union values community involvement and we reinvest in the communities we serve. Volunteering and serving in our communities is a core value and strength of ours. We are here to help you and we thrive on the value of people helping people.
Welcome – 11/1/2020
Thank you for taking a few moments to learn more about Colorado Credit Union and to read our initial blog post.
We plan to use this space to share financial information and tips, to answer your questions and to deliver exciting news about our dedicated Colorado Credit Union team.
If there are specific topics you would like to see addressed, please email us at firstname.lastname@example.org.
If you are new to Colorado Credit Union, we are a nonprofit credit union providing an array of financial products and services to our members.