Posted on: 17th Jan, 2013 11:11 am
hi guys! first time here....
i am a first time home buyer and just met a loan officer at my local credit union. they are offering 30 year mortgage loan, but i noticed on the small print is says 5 year demand; rate fixed for 5years.
"www.aurorahealthcare.org/misc/creditunion/art/ratesheet.pdf"
so i ask her about it and the way she explained it is after 5 years, they will revisit or review the loan rate. she mentioned that eversince she works there , even the housing market went downhill the 2nd time in 2008, they never review any loan.
she just said that after 5 years , you can refinance if needed.
does this mean they can change the rate after 5 years? i am a bit confused? i thought this is a 30 year fixed?
- my loan amount is $114,000
-they have $600 credit for closing cost to first time homebuyer.
their typical closing cost is around $600-$800.
- they will take off 1/4 percent if do automatic deduction from my paycheck.
- i am only putting a 5% down and pmi is around $45 a month for 25% coverage.
- they do not offer escrow account, so i can set up on my own.
-- attorneys fee $175
etc.
pretty much straight forward fee with less junk fee of fha loan.
btw, i know i should have preapprove first, but i am liking a condo asking $111,800, i wonder what is a good price to start?
condo is been in the market for 6 months, seller is highly motivated.
(extra info: 7 years in a healthcare job making $75k gross. excellent credit) wife is a homemaker....
i am a first time home buyer and just met a loan officer at my local credit union. they are offering 30 year mortgage loan, but i noticed on the small print is says 5 year demand; rate fixed for 5years.
"www.aurorahealthcare.org/misc/creditunion/art/ratesheet.pdf"
so i ask her about it and the way she explained it is after 5 years, they will revisit or review the loan rate. she mentioned that eversince she works there , even the housing market went downhill the 2nd time in 2008, they never review any loan.
she just said that after 5 years , you can refinance if needed.
does this mean they can change the rate after 5 years? i am a bit confused? i thought this is a 30 year fixed?
- my loan amount is $114,000
-they have $600 credit for closing cost to first time homebuyer.
their typical closing cost is around $600-$800.
- they will take off 1/4 percent if do automatic deduction from my paycheck.
- i am only putting a 5% down and pmi is around $45 a month for 25% coverage.
- they do not offer escrow account, so i can set up on my own.
-- attorneys fee $175
etc.
pretty much straight forward fee with less junk fee of fha loan.
btw, i know i should have preapprove first, but i am liking a condo asking $111,800, i wonder what is a good price to start?
condo is been in the market for 6 months, seller is highly motivated.
(extra info: 7 years in a healthcare job making $75k gross. excellent credit) wife is a homemaker....
I would contact a reputable mortgage broker or banker in your area so you can compare what they have to offer with what the credit union is offering. My guess is that you can get a true fixed rate mortgage loan at a rate that is comparable to the credit union's hybrid loan which looks like a balloon mortgage that has to be recast after 5 years.....and yes, the rate most likely can increase.
HI Awgd,
You can check out the given term and rate calculators respectively in order to compare the various terms of the loans and mortgage interest rates that you're getting:
http://www.mortgagefit.com/calculators/term-comparison.html
http://www.mortgagefit.com/calculators/comparison.html
This might help you in deciding which option to go in for.
You can check out the given term and rate calculators respectively in order to compare the various terms of the loans and mortgage interest rates that you're getting:
http://www.mortgagefit.com/calculators/term-comparison.html
http://www.mortgagefit.com/calculators/comparison.html
This might help you in deciding which option to go in for.
Thanks guys.
I am considering to keep the condo for a long time, so I do not think 5 years then refinance will work for me. I would like to lock the current rate right now and I do not think it is going to be this low after 5 years.
Here is the small print I found from my Credit Union.
**First and second mortgages are subject to a five-year demand period, respectively. At the end of the demand period, Aurora Credit Union reserves the right to call the loan due. At such time, you are invited to apply to refinance the loan.
Does this mean they "might" or they "must" force me to refinance after 5 years or depends if I am a good payer?
My credit union said this is not an ARM loan. I did check the application paper and the Fixed term box is neither checked. The box that has a check mark says Demand term...
Sounds fishy?
I made an appointment with my local bank loan officer next week to compare.
I am considering to keep the condo for a long time, so I do not think 5 years then refinance will work for me. I would like to lock the current rate right now and I do not think it is going to be this low after 5 years.
Here is the small print I found from my Credit Union.
**First and second mortgages are subject to a five-year demand period, respectively. At the end of the demand period, Aurora Credit Union reserves the right to call the loan due. At such time, you are invited to apply to refinance the loan.
Does this mean they "might" or they "must" force me to refinance after 5 years or depends if I am a good payer?
My credit union said this is not an ARM loan. I did check the application paper and the Fixed term box is neither checked. The box that has a check mark says Demand term...
Sounds fishy?
I made an appointment with my local bank loan officer next week to compare.
Hi Awgd,
As far as I can understand, you will have to refinance the loan after the 5 year period or pay off the loan in full. If you don't want to go with this option, then it will be better to take help of some other lender in order to get a loan.
Thanks
As far as I can understand, you will have to refinance the loan after the 5 year period or pay off the loan in full. If you don't want to go with this option, then it will be better to take help of some other lender in order to get a loan.
Thanks
Thanks guys! I went ahead and got preapproved by a local USbank here in Wisconsin. I will start a new thread regarding the numbers the loan officer gave me.
That's great to note!! Congratulations!! :)