CalculatorsThere are many financial decisions involved in purchasing or refinancing a home. The calculators we provide here can help you make some of those decisions.
Your PropertyWhen you purchase or refinance a home, the property is used as collateral for the mortgage loan. Here is what the lender is looking for and why.
What is an appraisal and who completes it?
To determine the value of the property you are purchasing or refinancing, an appraisal will be required. An appraisal report is a written description and estimate of the value of the property. National standards govern not only the format for the appraisal; they also specify the appraiser's qualifications and credentials. In addition, most states now have licensing requirements for appraisers evaluating properties located within their states.
The appraiser will create a written report for us and you will be given a copy.
Usually the appraiser will inspect both the interior and exterior of the home.
After the appraiser inspects the property, he/she will compare the qualities of your home with other homes that have sold recently in the same neighborhood. These homes are called "comparables" and play a significant role in the appraisal process. Using industry guidelines, the appraiser will try to weigh the major components of these properties (i.e., design, square footage, number of rooms, lot size, age, etc.) to the components of your home to determine an estimated value of your home. The appraiser adjusts the price of each comparable sale (up or down) depending on how it compares (better or worse) with your property.
As an additional check on the value of the property, the appraiser also estimates the replacement cost for the property. Replacement cost is determined by valuing an empty lot and estimating the cost to build a house of similar size and construction. Finally, the appraiser reduces this cost by an age factor to compensate for depreciation and deterioration.
If your home is for investment purposes, or is a multi-unit home, the appraiser will also consider the rental income that will be generated by the property to help determine the value.
Using these different methods, an appraiser will frequently determine slightly different values for the property. The appraiser uses judgment and experience to reconcile these differences and then assigns a final appraised value. The comparable sales approach is the most important valuation method in the appraisal because a property is worth only what a buyer is willing to pay and a seller is willing to accept.
It is not uncommon for the appraised value of a property to be exactly the same as the amount stated on your sales contract. This is not a coincidence, nor does it question the competence of the appraiser. Your purchase contract is the most valid sales transaction there is. It represents what a buyer is willing to offer for the property and what the seller is willing to accept. Only when the comparable sales differ greatly from your sales contract will the appraised value be very different.
What types of information will an underwriter look for when they review the appraisal report?
In addition to verifying that your home's value supports your mortgage loan request, we will also verify that your home is as marketable as others in the area. We will want to be confident that if you decide to sell your home, it will be as easy to market as other homes in the area.
We certainly do not expect that you will default under the terms of your mortgage loan and that a forced sale will be necessary, but as the lender, we will need to make sure that if a sale is necessary, it will not be difficult to find another buyer.
We will review the features of your home and compare them to the features of other homes in the neighborhood. For example, if your home is on a 20-acre lot, or has a large accessory building, we will want to make sure that there are other homes in the area on similar size lots or with similar outbuildings. It is hard to place a value on such unique features if we cannot see what other buyers are willing to pay for them. In some areas, additional acreage or outbuildings could actually be a detriment to a future sale. Finding comparable properties can be more challenging in rural areas where it is more difficult to find homes that have similar features.
We will also make sure that the value of your home is in the same range as other homes in the area. If the value of your home is substantially more than other homes in the neighborhood, it could affect the market acceptance of the home if you decide to sell.
We will also review the market statistics about your neighborhood. We will look at the time on the market for homes that have sold recently and verify that values are steady or increasing.
Will I get a copy of the appraisal report?
As soon as we receive your appraisal, we will update your Mortgage Loan Status with the estimated value of the home. As a standard practice, we will provide a copy of your appraisal report.
Are there any special requirements for purchasing a condominium?
Since the value and marketability of condominium properties is dependent on items that do not apply to single-family homes, there are some additional steps that must be taken to determine if condominiums meet our guidelines.
One of the most important factors is determining if the project the condominium is located in is complete. In many cases, it will be necessary for the project, or at least the phase that your unit is located in, to be complete before we can provide financing. The main reason for this is that until the project is complete, we cannot be certain that the remaining units will be of the same quality as the existing units. This could affect the marketability of your home.
In addition, we will consider the ratio of non-owner occupied units to owner-occupied units. This could also affect future marketability since many individuals would prefer to live in a project occupied by owners rather than renters. New York University Federal Credit Union will review the offering plan and the last two years financial statements of the condominium. You will receive a condominium questionnaire along with the application kit for the managing agent to complete.
We will also carefully review the appraisal to ensure that it includes comparable sales of properties within the project, as well as some from outside the project. Our experience has found that using comparable sales from both the same project as well as other projects gives us a better idea of the condominium project's marketability.
Depending on the percentage of the property's value you would like to finance, other items may also need to be reviewed.
I am purchasing a home. Do I need a home inspection and an appraisal?
Both a home inspection and an appraisal are designed to protect you against potential issues with your new home. Although they have totally different purposes, it makes the most sense to rely on each to help confirm that you have found the perfect home.
Appraisers are not construction experts and will not find or report items that are not obvious. They will not turn on every light switch, run every faucet or inspect the attic or mechanicals. That is where the home inspector comes in. They generally perform a detailed inspection and can educate you about possible concerns or defects with the home.
Accompany the inspector during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home.
I have heard that some lenders require flood insurance on properties. Will you?
Federal law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The law cannot stop floods, as they happen anytime and anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.
We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, flood insurance coverage will be required, since standard homeowner's insurance does not protect you against damages from flooding.
How long does it take for the property appraisal to be completed?
Appraisals are preformed by licensed appraisers who are familiar with home values in your area. New York University Federal Credit Union orders the appraisal as soon as the application fee is paid. Generally, it takes 10-14 days before the written report is sent to us. We follow up with the appraiser to ensure that it is completed as soon as possible. If you are refinancing, and an interior inspection of the home is necessary, the appraiser should contact you to schedule a viewing appointment. If you do not hear from the appraiser within seven days of the order date, please inform your Mortgage Representative. If you are purchasing a new home, the appraiser will contact the real estate agent (if you are using one) or the seller to schedule an appointment to view the home.
Loans, Rates & FeesWhen it comes to home financing, there are many different options to choose from. How do you find the mortgage loan that's best for you? Here is some information to help you.
Why is it possible for New York University Federal Credit Union to offer such low rates?
We are a not-for-profit cooperative organization; thus, interest that New York University Federal Credit Union accrues as a financial institution is passed to our members in the form of better rates on mortgage loans and lower or no fees on our services.
How are interest rates on mortgage loans determined?
Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation's central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.
What is an adjustable-rate mortgage loan?
An adjustable-rate mortgage loan, or an "ARM loan" as they are commonly called, is a mortgage loan type that offers a lower initial interest rate than most fixed-rate mortgage loans. The trade off is that the interest rate can change periodically, usually in relation to an index, which means that the monthly payment will go up or down accordingly.
If you consider an ARM loan to take advantage of the lower payment at the beginning of the mortgage loan, keep in mind that an increase in interest rates would lead to higher monthly payments in the future. It is a trade-off. You get a lower rate with an ARM loan in exchange for assuming more risk.
An ARM loan is the right mortgage loan choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for three to five years.
Here is some detailed information explaining how ARM loans work.
With most ARM loans, the interest rate and monthly payment are fixed for an initial time period such as one year, three years, five years, seven or ten years. After the initial fixed period, the interest rate can change at every adjustment period. For example, one of the most popular adjustable-rate mortgage loans is a 5-year ARM loan. The interest rate will not change for the first five years (the initial adjustment period) but can change every year after the first five years.
Our ARM loan interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indices is published weekly in the Wall Street Journal. If the index rate moves up, so does your mortgage loan interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down, your monthly payment may decrease.
To determine the interest rate on an ARM loan, we will add a pre-disclosed amount to the index called the "margin." If you are currently shopping for a mortgage loan, comparing one lender's margin to another's can be more important than comparing the initial interest rate, since it will be used to calculate the interest rate you will pay in the future.
An interest-rate cap places a limit on the amount your interest rate can increase or decrease. There are two types of caps:
1. Periodic or adjustment caps, which limit the interest rate increase or decrease from one adjustment period to the next.
2. Overall or lifetime caps, which limit the interest rate increase over the life of the mortgage loan.
Interest rate caps are very important since it is difficult to correctly predict future market conditions. New York University Federal Credit Union offers both adjustment and lifetime caps on its ARM loans. Please see each product description for full details.
"Negative Amortization" occurs when your monthly payment changes to an amount less than the amount required to pay interest due. If a mortgage loan has negative amortization, you might end up owing more than you originally borrowed. None of the ARM loans we offer allow for negative amortization.
Some lenders may require you to pay special fees or penalties if you pay off the ARM loan early. We never charge a penalty for prepayment.
Contact a Mortgage Representative
Selecting a mortgage loan may be the most important financial decision you will make and you are entitled to all the information you need to make the right decision. Do not hesitate to contact a Mortgage Representative, if you have questions about the features of New York University Federal Credit Union adjustable-rate mortgage loans.
Is comparing Annual Percentage Rates (APR's) the best way to decide which lender has the lowest rates and fees?
The Federal Truth in Lending regulation requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by including some, but not all, closing fees in its calculation. Closing fees, in addition to the interest rate, determine the estimated cost of financing over the full term of the mortgage loan. Since most individuals do not keep the mortgage loan for the entire mortgage loan term, it may be misleading to spread the effect of some of these up-front costs over the entire mortgage loan term.
Moreover, the APR does not include all the closing fees and lenders are allowed to interpret which fees they include. Fees for items such as appraisals, title work, and document preparation are not included even though you will probably have to pay for them.
For adjustable-rate mortgage (ARM) loans, the APR can be even more confusing. Since it is not easy to predict market conditions, assumptions must be made regarding future rate adjustments.
Therefore, keep in mind that even though it is important to use the APR as a guideline to shop for mortgage loans, you should not depend solely on the APR in choosing the mortgage loan that is best for you. Look at total fees and possible future rate adjustments, if you are comparing ARM loans as well consider the length of time that you plan on having the mortgage loan.
Do not forget that the APR is an effective interest rate - not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your mortgage loan.
Should I pay discount points in exchange for a lower interest rate?
Discount points are considered a form of interest. Each point is equal to one percent of the mortgage loan amount. You pay them, up front, at your mortgage loan closing in exchange for a lower interest rate over the life of your mortgage loan. This means more money will be required at closing; however, you will have lower monthly payments over the term of your mortgage loan.
To determine whether it makes sense for you to pay discount points, you should compare the cost of the discount points to the monthly payments savings created by the lower interest rate. Divide the total cost of the discount points by the savings in each monthly payment. This calculation provides the number of payments you will make before you actually begin to save money by paying discount points. If the number of months it will take to recoup the discount points is longer than you plan on having this mortgage loan, you should consider the mortgage loan option that does not require discount points to be paid.
To determine if points are right for you, use our convenient discount points calculator! Or contact a New York University Federal Credit Union Mortgage Representative at (212) 995-3171 or 800-997-0724.
What are the advantages of using New York University Federal Credit Union as a mortgage lender?
If you are looking for a mortgage loan, it may be tempting to pick up the telephone book or to visit your local financial institution. After all that is how some have done it. However, keep in mind that shopping for a mortgage loan has its important benefits.
Rates and fees are lower.
New York University Federal Credit Union Is a not-for-profit organization; thus, interest that New York University Federal Credit Union accrues is passed to our members in the form of better rates on mortgage loans and lower or no fees on our services.
A full array of mortgage loan options.
New York University Federal Credit Union understands the special needs of its members, and this is why we offer a variety of mortgage loans to meet your unique borrowing needs.
Apply at your convenience with New York University Federal Credit Union MortgageXPress.
You can complete an application for your mortgage loan anytime, anywhere in the morning or at midnight in the convenience of your own home without any pressure to make a final decision until you are ready!
Personal Assistance whenever you need it.
New York University Federal Credit Union offers personalized support during the entire mortgage loan process. You can call or email a Mortgage Representative who can answer your questions or provide some advice. New York University Federal Credit Union provides status information that is available 24 hours a day - you will not have to wait for a Mortgage Representative to call you back.
How do I know if it is best to lock in my interest rate or to let it "float"?
Mortgage loan interest rate movements are as hard to predict as the stock market and no one can really know for certain whether they will go up or down.
If you have a hunch that rates are on an upward trend, then you will want to consider locking in the rate as soon as you are able. Before you decide to lock in, make sure that your mortgage loan can close within the lock-in period. It will not be beneficial to lock in your rate if you cannot close during the rate lock-in period. If you have any secondary financing on the home that will not be paid off, allow some extra time since we will need to contact that lender to get their permission.
If you think rates might drop while your mortgage loan is being processed, take a risk and let your rate "float" instead of locking in.
How much money will I save by choosing a 15-year mortgage loan rather than a 30-year mortgage loan?
A 15-year fixed-rate mortgage loan gives you the ability to own your home free and clear in 15 years. And, while the monthly payments are somewhat higher than with a 30-year mortgage loan, the interest rate on the 15-year mortgage loan is usually a little lower, and more importantly - you will pay less than half the total interest cost of the traditional 30-year mortgage loan.
However, if you cannot afford the higher monthly payment of a 15-year mortgage loan, you are not alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage loan. It still makes sense to use a 30-year mortgage loan for most individuals.
Who should consider a 15-year mortgage loan?
The 15-year fixed-rate mortgage loan is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. With this type of mortgage loan, they own more of their home faster, and can then begin to consider the cost of higher education for their children without worrying about mortgage loan payments. This mortgage loan may also be right for those with higher incomes whose desire is to own their homes before they retire.
Advantages and disadvantages of a 15-year mortgage loan.
The 15-year fixed-rate mortgage loan offers two main advantages for most borrowers.
- You own your home in half the time it would take with a traditional 30-year mortgage loan.
- You save more than 50% of the amount of interest of a 30-year mortgage loan. Lenders usually offer this type of mortgage loan at a slightly lower interest rate than 30-year mortgage loans. It is this lower interest rate added to the shorter mortgage loan life that creates real savings for 15-year fixed-rate mortgage loan borrowers.
- The possible disadvantages associated with a 15-year rate mortgage loan are:
- The monthly payments for this type of mortgage loan are roughly 10% to 15% higher than the payment for a 30-year mortgage loan.
- Because you will pay less total interest on the 15-year fixed-rate mortgage loan, you will not have the maximum mortgage loan interest tax deduction possible.
- Compare these mortgage loans yourself.
- Use the “How much can I save with a 15 year mortgage?” calculator in our Resource Center to help decide which mortgage loan term is best for you.
Is there a fee charged or any other obligation if I complete the New York University Federal Credit Union MortgageXPress Application?
Yes. There is a non-refundable application fee that will be charged after you provide your intent to proceed with the loan transaction. Funds must be available in the selected New York University Federal Credit Union account in order for New York University Federal Credit Union to begin processing.
When can I lock in my interest rate and discount points?
You can lock in your interest rate and discount points when you submit your mortgage loan application, provide your intent to proceed and you pay the application fee.
If we need to review your information before providing your mortgage loan approval, a Mortgage Representative will contact you and you will then have the opportunity to lock in your rate and fees.
What is your Rate Lock-in Policy?
The interest rate market is subject to movements without advance notice. Locking in a rate protects you from the time that your lock in is confirmed to the day that your lock-in period expires.
New York University Federal Credit Union offers members two interest rate options: rate lock-in option and rate "float" option. The member understands that New York University Federal Credit Union cannot predict interest rates. The member acknowledges and understands that this decision has been made solely by the member without advice whatsoever from any New York University Federal Credit Union employee and the member hereby releases New York University Federal Credit Union from any and all responsibility, financial or otherwise, from the members decision to lock in or float the interest rate.
Rate Lock-in Option:
During your commitment period, interest rates may fluctuate. If interest rates go up and you have locked in your rate, you will have the peace of mind of knowing that your interest rate is guaranteed. If the rate goes down, New York University Federal Credit Union gives you the option to buy down your interest rate for a nominal fee. Please refer to the buy-down section for details.
At application, upon the receipt of the authorization to deduct the lock-in deposit from your New York University Federal Credit Union account (funds must be available in the selected account in order for the interest rate to be locked in), the fully executed Interest Rate Lock-in Agreement will be completed by New York University Federal Credit Union and mailed to you for your signature. This agreement will lock in your interest rate for 60 days from your application date.
If your mortgage loan does not close, through no fault of New York University Federal Credit Union, by the expiration date of the lock-in agreement, you agree to accept the higher of your original rate or the then prevailing rate ten (10) business days prior to closing.
Rate Float Option:
The interest rate will "float" (rate undetermined) until ten (10) business days prior to closing your mortgage loan. You agree to accept the prevailing interest rate in effect ten (10) business days prior to closing.
Please note: If you do not lock in at the time of application, you may lock in during the commitment period of 60 days from date of application, up to ten (10) business days prior to closing at the prevailing interest rate. However, your rate will only be locked up until your commitment expiration date. Please read this entire section regarding your options. The rate, however, cannot be locked in without a signed Interest Rate Lock-In Agreement.
A Lock-in Agreement is an agreement by the borrower and the lender and specifies the number of days for which a mortgage loan's interest rate and points are guaranteed.
Rate Buy-Down Information for Locked-in Mortgage Loans
Should you choose to lock in your interest rate, New York University Federal Credit Union will honor the lock-in agreement up until your commitment expiration date. The interest rate may fluctuate. If the interest rate goes up, you will have peace of mind of knowing your rate is guaranteed.
If the rate goes down, New York University Federal Credit Union gives you the option of buying down your rate once during the commitment period of 60 days for a fee of three eighths of a percentage point of your mortgage loan amount (.375%). At the time you select to buy down the mortgage loan rate, the funds must be available in your New York University Federal Credit Union Savings or Checking Account or you will not receive the rate at the time of selecting this option. You may buy down your locked mortgage loan interest rate once up to ten (10)business days prior to closing your mortgage loan within your commitment period. You will need to advise us by email at firstname.lastname@example.org if you would like to take advantage of this buy-down option and indicate which New York University Federal Credit Union account - savings or checking - you would like us to debit.
When Can I Lock in the Rate?
In some cases, your New York University Federal Credit Union online MortgageXPress Application will provide all the information needed and you will have the option to lock in the rate prior to submitting your mortgage loan application. If you would like to lock in your interest rate after submitting your mortgage loan application you can do so by contacting your UNFCU Mortgage Representative.
Rate Lock-in Period
We currently offer a 60-day lock-in period. This means your mortgage loan must close within your commitment period.
New York University Federal Credit Union provides extension options for your commitment period for terms of 10 days at a time for a fee of .125% for each 10 day period. The maximum extension period is 30 days for a fee of .375% of your loan amount. This extension does not extend the rate lock, it only extends the commitment period. The rate issued at closing will be the higher of either the rate during the commitment period or the prevailing interest rate ten (10) business days prior to closing. You will pay for any re-certification fees for any documents. The date your documents expire will be stated in your commitment letter.
Rate Lock-in Terms and Conditions:
The lock-in rate is the interest rate only for the type of mortgage loan for which you apply, and is based on the repayment term, mortgage loan amount and points/origination fee you have chosen. You acknowledge and understand that in the event any of these items are revised, the lock-in interest rate is no longer valid and a new lock-in agreement will have to be signed.
Does New York University Federal Credit Union offer prepayment penalties on its mortgage loans?
None of the mortgage loans we offer have penalties for prepayment. You can pay off your mortgage loan any time with no additional charges.
I want to find out more about closing fees and how they are determined.
Obtaining an estimate of closing costs is as simple as completing our ‘Get a Personalized Rate Quote’ section that is located on the mortgage pages of our website. In addition, you can review your individual case with one of our experienced Mortgage Representatives.
What is title insurance and why do I need it?
If you have ever purchased a home before, you may already be familiar with the benefits and terms of title insurance. But if this is your first mortgage loan or if you are refinancing, you may be wondering why you need another insurance policy.
The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and especially your mortgage lender, want to make sure the property is indeed yours; that no individual or government entity has any right, lien, claim, or encumbrance on your property.
The function of a title insurance company is to make sure your rights and interests to the property are clear; that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected.
Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders, and others who have an interest in real estate transfer. Title companies typically issue two types of title policies:
1) Owner's Policy. This policy covers you, the homebuyer.
2) Lender's Policy. This policy covers the lending institution over the life of the mortgage loan.
Both types of policies are issued at the time of closing for a one-time premium, if the mortgage loan is a purchase. If you are refinancing your home, you probably already have an owner's policy that was issued when you purchased the property. We only require that a lender's policy be issued.
Before issuing a policy, the title company performs an in-depth search of the public records to determine if anyone other than you has an interest in the property. The search may be performed by title company personnel using public records.
After a thorough examination of the records, any title problems are usually found and can be cleared up prior to your purchase of the property. Once a title policy has been issued, if any claim - which is covered under your policy - is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. The title company is also responsible to cover losses resulting from a valid claim. This protection remains in effect as long as you or your heirs own the property.
The fact that title companies try to eliminate risks before they develop makes title insurance significantly different from other types of insurance. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen future event, such as a fire, accident or theft. On the other hand, the purpose of title insurance is to eliminate risks and prevent losses caused by defects in title that may have happened in the past.
This risk elimination has benefits to both the homebuyer and the title company. It minimizes the chances that adverse claims might be raised, thereby reducing the number of claims that have to be defended or satisfied. This keeps costs down for the title company and the premiums low for the homebuyer.
Buying a home is a big step emotionally and financially. With title insurance you are assured that you are free and clear of and claims or encumbrances on your property. Any claims that are deemed valid against your property will be borne by the title company, and that the odds of a claim being filed are slim indeed.
What is private mortgage insurance and when is it required?
It is important not to confuse private mortgage insurance with mortgage life insurance, which is designed to pay off a mortgage loan in the event of a borrower's death. Private mortgage insurance permits you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. Low down payment mortgage loans are becoming more and more popular, and by purchasing private mortgage insurance, lenders are comfortable with down payments as low as 5% of the home's value. The private mortgage insurance also provides you with the ability to buy a more expensive home than might be possible if a 20% down payment were required.
The private mortgage insurance premium is based on the loan-to-value ratio (LTV), type of mortgage loan, and amount of coverage required by the lender. Usually, the premium is included in your monthly payment and one to two months of the premium is collected as a required advance at closing. New York University Federal Credit Union does not collect a premium at closing.
It may be possible to cancel private mortgage insurance at some point, such as when your mortgage loan balance is reduced to a certain amount - below 75% to 80% of the property value. Recent federal legislation requires automatic termination of private mortgage insurance for many borrowers when their mortgage loan balance has been amortized down to 78% of the original property value. If you have any questions about when your private mortgage insurance could be cancelled, please contact the New York University Federal Credit Union Loan Servicing Department at (347) 686-6023.
What is the maximum percentage of my future home's value that I can borrow with New York University Federal Credit Union?
The maximum percentage of your future home's value depends on the purpose of your mortgage loan, how you will use the property, and the mortgage loan type you choose. Let New York University Federal Credit Union help you determine what mortgage loan amount you qualify for by completing our MortgageXPress application!
What's the difference between a home equity loan and a refinance?
A home equity loan is generally a second mortgage against your home, meaning it is a loan that you take out using your home as collateral without paying off your first mortgage. A refinance typically means that you will be paying off your existing first mortgage and replacing it with a new first mortgage.
Determining whether it is best to refinance or to obtain a home equity loan is very complicated and depends on many factors. You should consider contacting your tax advisor to determine what makes the most sense for you.
Comparing monthly payments of your existing first mortgage and a new home equity loan as opposed to a new first mortgage should help. You should also keep in mind the term of each of your loans, especially if monthly payment is not a significant issue for you.
Your ApplicationApplying for a mortgage loan can be very intimidating. You are asked specific details about your income, assets, and debts. Here we will give you information that will let you know how that information is used when applying for a mortgage loan.
Can I apply for a mortgage loan before I find a property to purchase?
Yes, applying for a mortgage loan before you find a home may actually be the best thing you could do! If you apply for your mortgage loan now, we will issue a pre-approval subject to you finding the perfect home. You can use the pre-approval letter to ensure real estate brokers and sellers that you are a qualified buyer. Having a pre-approval for a mortgage loan may give more weight to any purchase offer that you make.
When you find the perfect home, you will simply call your Mortgage Representative to complete your application. You will have an opportunity to lock in one of our great rates and we will complete the processing of your request.
What is a credit score and how will my credit score affect my application?
A credit score is one of the pieces of information that we will use to evaluate your application. Financial institutions have been using credit scores to evaluate mortgage loan decisions for many years.
Credit scores are based on information collected by credit bureaus and information reported each month by your creditors about the balances you owe and the timing of your payments. A credit score is a compilation of all this information converted into a number that helps a lender determine the likelihood that you will repay the mortgage loan on schedule. The credit score is calculated by the credit bureau, not by the lender. Credit scores are calculated by comparing your credit history with millions of other consumers. They have proven to be a very effective way of determining credit-worthiness.
Some of the factors that affect your credit score include your payment history, your outstanding obligations, the length of time you have had outstanding credit, the types of credit you use, and the number of inquiries that have been made about your credit history in the recent past.
Credit scores used for mortgage loan decisions range from approximately 300 to 900. Generally, the higher your credit score, the lower the risk that your payments will not be paid as agreed.
Using credit scores to evaluate your credit history allows us to quickly and objectively evaluate your credit history when reviewing your mortgage loan application. However, there are many other factors considered when making a mortgage loan decision and we never evaluate an application without looking at the total financial picture of a member.
Do you provide financing for properties on large tracts of land?
In most cases we are able to offer financing for homes on large tracts. It is important to determine if the size of your property is common for the area. The appraiser must be able to provide detailed information about the recent sale of similar homes on similar lots that have occurred recently. If that is not possible, we may not be able to provide the financing that you are looking for.
It is also important that your property be residential in nature. If the property is a working farm or is used for any commercial purposes, we may have additional questions. Contact a Mortgage Representative if you have concerns about the acceptability of your property.
Will the inquiry about my credit affect my credit score?
An abundance of credit inquiries can sometimes affect your credit score, since it may indicate that your use of credit is increasing.
But not to worry! The data used to calculate your credit score does not include any mortgage loan or auto loan credit inquiries that are made within the 30 days prior to the score being calculated. In addition, all mortgage loan inquiries made in any 14-day period are always considered one inquiry. Do not limit your mortgage loan shopping for fear of the effect on your credit score.
Will I be charged any fees if I authorize my credit information to be accessed?
There is no charge to you for the credit information we will access with your permission to evaluate your MortgageXPress application. New York University Federal Credit Union will pay the credit report fee.
Is New York University Federal Credit Union right for you?
At New York University Federal Credit Union, you will find a wide variety of mortgage loans with flexible terms and low-cost solutions designed to meet your unique borrowing needs. Our knowledgeable Mortgage Representatives are here to guide you through the entire application process. In most cases, when you use our MortgageXPress application, you can get your decisions in minutes, not days - no matter what time it is! Remember, start your home shopping by applying for your "Pre-Approval Letter." With pre-approval, you will be able to make an offer on your dream home knowing that your financing is approved.
Is it true that I can borrow funds to use them towards my down payment?
Yes, you can borrow funds and use them as your down payment! However, any loans that you take out must be secured by an asset that you own. If you own an item of value that you could borrow funds against, such as a car or another home, it is a perfectly acceptable source of funds. If you are planning on obtaining a loan, make sure to include the details of this loan in the "Expenses" section of the application.
How do you decide what additional documents I need to process my loan?
We take full advantage of an automated underwriting system that allows us to request as little information as possible to verify the data you provided while completing your MortgageXPress application. The automated underwriting system compares your financial situation with statistical data from millions of other homeowners and uses that comparison to determine the level of verification needed. We will request any additional information necessary.
I am self-employed. How will you verify my income?
Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period.
We will review and average the net income from self-employment reported on your tax returns to determine the income that can be used to qualify. We will not be able to consider any income that has not been reported as such on your tax returns.
Will my overtime, commission, or bonus income be considered when evaluating my application?
In order for bonus, overtime, or commission income to be considered, you must have a history of receiving it and it must be likely to continue. We will usually need to obtain copies of W-2 or 1099 statements for the previous two years and a recent pay statement to verify this type of income. If a major part of your income is commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-related expenses, if any. We may average the amounts you have received over the past two years to calculate the amount that can be considered as a regular part of your income.
If you have not been receiving bonus, overtime, or commission income for at least two years, it probably cannot be given full value when your mortgage loan application is reviewed for approval.
I am retired and my income is from pension or social security. What documents will I need to provide?
We will ask for copies of your recent pension cheque stubs, or statements from your financial institution (if other than UNFCU). Sometimes it will also be necessary to verify that this income will continue for at least three years since some pension or retirement plans do not provide income for life. This can usually be verified with a copy of your award letter. If you do not have an award letter, we can contact the source of this income directly for verification.
If you are receiving tax-free income, such as social security earnings, in some cases, we will consider the fact that taxes will not be deducted from this income when reviewing your request.
If I have income that is not reported on my tax return, can it be considered?
Generally, only income that is reported on your tax return can be considered when applying for a mortgage loan. Unless, of course, the income is legally tax free and is not required to be reported.
How will my rental income be verified?
If you own investment properties, we will generally ask for the most recent year's federal tax return to verify your rental income. We will review the Schedule E of the tax return to verify your rental income, after all expenses except depreciation. Since depreciation is only a paper loss, it will not be counted against your rental income.
If you have not owned the investment property for a complete tax year, we will ask for a copy of any leases you have executed and we will estimate the expenses of ownership. Additional restrictions and requirements may apply.
What can I expect when I apply for a New York University Federal Credit Union Mortgage Loan?
First, you will complete our MortgageXPress application.
The application will ask you questions about your future property and your finances and takes less than 20 minutes to complete. As soon as you have finished completing your application, we will review your request for instant approval.
After completing your application, a Mortgage Representative will contact you to introduce himself/herself within 24-48 hours and to answer any questions you may have. Your Mortgage Representative is a mortgage expert that will provide help and guidance through the home-financing process. .
It is extremely important to provide your ‘Intent to Proceed’ with your mortgage application either verbally, electronically or in writing within 10 business days of the date of your disclosures. Additionally, please ensure that you review your ‘shopping list’ of services you can and cannot shop for.
Next, we will order the appraisal from a licensed appraiser who is familiar with home values in your area. Depending on your finances and the mortgage loan amount requested, different types of appraisals are used.
Title insurance will be required, whether you are purchasing or refinancing. If you are purchasing a home, your attorney or the Escrow Agent may order the title. We will use the title insurance policy to confirm the legal status of your property and to prepare the closing documents.
Your Mortgage Representative will keep you informed every step of the way via email. Status information is also available online 24 hours a day/7 days a week.
After your loan has been reviewed, a conditional commitment letter may be issued if your loan was approved. This will list any items we will need in order to verify the information you provided about your finances in the MortgageXPress application. It is extremely important to provide any supporting documentation (i.e., pay statements, bank statements, etc.) that will be necessary to verify your information in a timely fashion.
After we have received all pertinent information as listed in your commitment as well as the appraisal and title insurance, we will contact you to schedule your mortgage loan closing. If you are purchasing a home, the coordination of the closing will be handled by your attorney or the Escrow Agent.
A few days before the closing, your Closing Representative will contact you to walk through the final information so that you are fully prepared for the closing.
After these steps have been completed, congratulations! You will receive the keys to your new home and will now be a homeowner!
I have had a few employers in the last few years. Will that affect my ability to obtain a new mortgage loan?
Having changed employers frequently is typically not a hindrance to obtaining a new mortgage loan. This is particularly true if you made employment changes without having periods of time in between without employment and remained in the same field of employment. We will also look at your income advancements as you have changed employment.
If you are paid on a commission basis, a recent job change may be an issue since it will be difficult to predict your earnings without a history with your new employer.
I was in school before obtaining my current job. How do I complete the application?
If you were in school before your current job, enter the name of the school you attended and the length of time you were in school in the previous employment fields. You can enter a position of "student" and income of "0."
If my property's appraised value is more than the purchase price can I use the difference towards my down payment?
Unfortunately, if you are purchasing a home, we will have to use the lower of the appraised value or the sales price to determine your down payment requirement.
It is still a great benefit for your financial situation if you are able to purchase a home for less than the appraised value, but secondary market guidelines do not allow us to use this "instant equity" when making our mortgage loan decision.
I am receiving a monetary gift from someone else. Is this an acceptable source of my down payment?
A gift from a relative, domestic partner, fiance, or fiancee is an acceptable source of downpayment. This gift must be evidenced by a letter that is signed by the donor We will ask you for the name, address, and telephone number of the gift giver, as well as the donor's relationship to you.
If your mortgage loan request is for more than 80% of the purchase price, we will need to verify that you have at least 5% of the property's value in your own assets.
We will verify that the gift funds have been transferred to you by obtaining a copy of a statement from your financial institution to verify that you have deposited the gift funds into your account.
I am selling my current home to purchase a new one. What type of documentation will be required?
If you are selling your current home to purchase your new home, we will ask you to provide a copy of the settlement statement (HUD) or closing disclosure you will receive at the closing to verify that your current mortgage loan has been paid in full and that you will have sufficient funds for our closing. Often the closing of your current home is scheduled for the same day as the closing of your new home. If that is the case, you will need to provide us with a copy of the settlement statement (HUD) or closing disclosure of your current home prior to the commencement of the closing of the new home for review and approval.
I am relocating because I have accepted a new job that I have not started yet. How should I complete the application?
Congratulations on your new job! If you will be working for the same employer, complete the application as such but enter the income you anticipate you will be receiving at your new location.
If your employment is with a new employer, complete the application as if this were your current employer and indicate that you have been there for one month. The information about the employment you will be leaving should be entered as a previous employer. Please note in the “Comments” section that this is a new employer and indicate the actual date of new employment. We will discuss the details after you submit your MortgageXPress application for approval. Additional requirements may apply.
I have co-signed a mortgage loan for another person. Should I include that debt here?
Generally, a co-signed debt is considered when determining your qualifications for a mortgage loan. You should disclose the total obligation and the property information, if applicable, in your mortgaeg application.
I have student loans that are not in repayment yet. Should I include them as installment debts?
Yes, all student loans will be considered whether or not they are in the repayment stage.
How will a past bankruptcy or foreclosure affect my ability to obtain a new mortgage loan?
If you have had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage loan. Unless the bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that four years have passed since the bankruptcy or foreclosure. It is also important that you have re-established an acceptable credit history with a new mortgage loan or credit cards.
What exactly is an installment debt?
An installment debt is a loan that you make payments on, such as an auto loan, a student loan or a debt consolidation loan. Do not include payments on other living expenses, such as insurance costs or medical bill payments. We will include any installment debts that have more than 10 months remaining when determining your qualifications for this mortgage loan.
Closing & BeyondCongratulations! Your mortgage loan has been approved and your mortgage loan closing date has been set! This section will give you some idea of what to expect at closing and what happens after closing.
What happens at the mortgage loan closing?
For refinances, the closing will take place at UNFCU in Long Island City, NY. For loans outside of NY State, the closing will take place at the office of a title company or an attorney in your area who will act as our agent. If you are purchasing a new home, the closing location will be determined by the attorneys and/ settlement agents. The seller will be at the closing to transfer ownership to you, but in some states, these two events actually happen separately.
During the closing you will be reviewing and signing several mortgage loan documents. The closing agent or attorney conducting the closing should be able to answer any questions you have or you can feel free to contact your Closing Representative, if you prefer.
To make sure there are no surprises at closing, a Closing Representative will contact you a few days prior to closing to address any concerns you may have.
The most important documents you will be signing at the closing include:
You will receive this document 3 business days prior to your scheduled closing date, it
provides an itemized listing of the final fees charged in connection with your mortgage loan. If your mortgage loan is a purchase, the closing disclosure will also include a listing of any fees related to the transaction. If this mortgage loan will be a refinance, the closing disclosure will show the pay off amounts of any mortgage loans that will be paid in full with your new mortgage loan. Most items on the statement will correspond to the numbers listed on the Loan Estimate that will be provided in your disclosure kit.
This is the document you sign to agree to repay your mortgage loan. The note will provide you with all of the details of your mortgage loan, including the interest rate and length of time to repay the mortgage loan. It also explains the penalties that you may incur if you fall behind in making your payments.
Mortgage / Deed of Trust
This document pledges a property to the lender as security for repayment of a debt. Essentially this means that you will give your property up to the lender in the event that you cannot make the mortgage loan payments. The Mortgage restates the basic information contained in the note, as well as details the responsibilities of the borrower. In some states, the document is called a Deed of Trust instead of a Mortgage.
Right of Rescission
If your mortgage loan is a refinance for a primary residence, federal law requires that you have three days to decide positively that you want a new mortgage loan after you sign the documents. This means that the mortgage loan funds will not be disbursed until three business days have elapsed. The closing agent will provide more details at the closing.
Will I need to have an attorney represent me at closing?
In some areas it is customary, and sometimes required by law, to have an attorney represent you at the closing. In other areas, attorneys are not as common at a real estate closing. Please contact the UNFCU Mortgage Closing Department if you have questions about attorney representation. By all means, we recommend that you have an attorney at the closing if it would make you more comfortable. If your attorney has any questions about your new mortgage loan, please refer them to the UNFCU Mortgage Closing Department. We would be happy to provide any information necessary.
Can I get advanced copies of the documents I will be signing at closing?
Your Closing Disclosure will be prepared and sent directly to you 3 business days prior to your scheduled closing date and it provides an itemized listing of the final fees charged in connection with your mortgage loan.
Who will be present at the closing?
The closing agent acts as our agent and will represent New York University Federal Credit Union at the closing. However, your personal Closing Representative will contact you prior to closing to discuss your final documents and to explain a final breakdown of your closing fees. If you have any questions that the closing agent cannot answer during the closing, ask him/her to contact your Closing Representative by telephone and we will get you the answers you need - before the closing is over!
I will not be able to attend the closing. What other options are there?
If you will not be able to attend the mortgage loan closing, contact your Mortgage Representative to discuss other options. If someone you trust is able to attend on your behalf, you can execute a Power of Attorney so that this person can sign documents on your behalf. The Power of Attorney form must be reviewed and approved by our Closing Department prior to closing. In any event, we will suggest any solution that will work in your unique circumstance.
If I apply, where will the closing take place?
We use a nationwide network of closing agents and attorneys to conduct our mortgage loan closings. If your property is located in another state, we will schedule your closing to take place in a location that is convenient for you.
We will deliver our mortgage loan documents and wire transfer your mortgage loan funds to the closing agent or attorney prior to closing so that they will have plenty of time to prepare.
Can I make my monthly payments with an automated debit from my New York University Federal Credit Union account?
For your convenience, New York University Federal Credit Union offers automated monthly payments. At the mortgage loan closing, an automated payment application will be provided. Simply sign it and return to the Closing Agent at closing.