To check out credit union membership possibilities in your area, go to by Washington Post Writers Group.Are you a top realtor? Join Clever’s networkĭo you want to close more loans? Join Clever's partnership program Not all credit unions offer attractive loan deals, but many do. You just want the lowest-cost option for a mortgage. Robert Davis, executive vice president for mortgage markets at the American Bankers Assn., says large credit unions get an unfair break - they essentially function like banks, but they have lower costs because as not-for-profit, member-owned institutions, they are exempt from federal taxation.īut let’s be frank: If you’re a first-time buyer, tax policy issues probably don’t concern you. “We know our members,” Miller said, adding that Navy Federal has been following “ability to repay” underwriting guidelines for years, well in advance of congressional mandates for all lenders to do so after the mortgage crisis of the last decade.Ĭredit unions’ rapid growth - they now have about 100 million members - hasn’t gone unnoticed by banks and mortgage companies who compete against them. Stacie Walker, senior vice president for loan origination at North Carolina’s State Employees’ Credit Union, said that its portfolio of zero-down payment, first-time buyer loans “actually performs better” than the entire mortgage portfolio, though she did not have specific figures on hand. Katie Miller, vice president for mortgages at Navy Federal, told me its serious delinquency rate as of March on its entire portfolio was 0.57%. The Boeing Employees’ Credit Union, which is open to all residents and workers in the state of Washington - not just Boeing employees - gives purchasers the option of receiving a 20% cash refund of their real estate agent’s commission plus a $250 credit toward mortgage closing costs.īut here’s a key question: Are credit unions that offer come-ons like these increasing their risk of defaults and losses? Counterintuitive though it might seem, credit union home-purchase programs generally have minuscule delinquency and default rates. Still other credit unions help new home buyers with their expenses by refunding portions of real estate agents’ commissions. Even “cohabiting partners” are eligible for membership. Navy Federal also is tapping into a massive membership base of 5 million members worldwide and adding young new members quickly: It’s open to all branches of the armed services, active and retired, civilian employees, contractors and a wide range of relatives. So how is Navy Federal pulling in hordes of young first-timers? By offering loans that address their needs - zero-down payments, no private mortgage insurance premiums, plus the standard low-down payment menus of the Federal Housing Administration (3.5% minimum) and the Department of Veterans Affairs (zero minimum) loans. ![]() The historical norm for first-time buyer participation in home purchasing is around 40% but currently is just 28% to 29%, according to the National Assn. ![]() ![]() But what’s really extraordinary is that 59% of the loans went to first-time buyers, and two-thirds of those first-timers were from a demographic slice that has been missing in action for years - borrowers ages 18 to 34.
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