Mortgage Basics
There’s nothing like the excitement of finding the perfect home to buy. The satisfaction of knowing that you were right to keep searching until you found a house that offered everything you wanted and needed. At Direct Financial, we take the same approach to finding you a mortgage.
We make it a priority to provide personalized service with competitive rates and low fees so we can customize a mortgage product that’s just right for you.
Why Direct Financial for your next mortgage loan?
- Consistently high levels of member satisfaction
- Low interest rates
- Local underwriting and servicing
- Lower monthly mortgage insurance payment
- Experienced loan officers
- Free home buying seminars
- Free pre-approval
Call 866.80.LOANS to speak with someone today, or apply online anytime.
Mortgage Rates
30 Year Fixed Rate
Today's Rate:
4.650%
7/1 ARM
Non-Conforming ARM Primary Residence
4.914%
FHA 30 Year Fixed Rate
5.086%
Prepare to Borrow
Quick Tip
Providing thorough documentation to your lender is helpful in making the loan process move quickly and smoothly to approval.
When preparing to meet with your lender please gather the following documentation for each borrower:
- Copy of a recent paystub
- Copy of the last 2 years W-2 forms
- If self employed or commissioned, copies of the most recent two years full federal tax returns
- Copy of Divorce Decree or Child Support Order, if applicable
- Copies of any non-Direct Financial bank statements
- Copy of most recent retirement statement
The Path to Your New Home
Phase 1:
Application
- Apply online or on paper.
- Provide Direct Financial with a signed General Consent Form.
- Collect applicable items from the Mortgage Checklist.
- A Mortgage Loan Officer will contact you.
Phase 2:
Approval
- Direct Financial Underwriter reviews income, employment history, credit and assets for loan approval
Phase 3:
Processing
- Mortgage Processor provides appraisal results and Commitment Letter
- Borrower provides Direct Financial with a homeowner’s insurance binder
- When loan conditions are met, closing is scheduled
Phase 4:
Closing
- Title Company performs 40 year title search
- Closing Disclosures prepared and provided
- Title Company advises borrower on acceptable method of payment
- Be diligent when considering wiring money. Click here to learn more.
- Closing is held at the Title Company's office
Your Direct Financial Team
Mortgage Officer
- Reviews income, credit, savings and loan programs
- Issues pre-approval letter
- Obtains copy of Purchase & Sales Contract
- Orders appraisal
- Submits loan to underwriting
Mortgage Assistant
- Keeps REALTOR® representing borrower updated on key dates regarding appraisal, loan approval, and closing dates
Mortgage Processor
- Issues commitment letter to borrower after approval
- Orders legal work for borrower
- Works with borrower to meet conditions of loan approval
- Schedules closing
Underwriter
- Reviews loan documentation
- Approves or denies loan based on program guidelines
Real Estate Agent
- Obtains market information
- Searches for home within price range
- Negotiates Purchase and Sales Contract
Title Company
- Helps prepare Initial Closing Disclosure with lender
- Performs 40 year title search
- Closes the loan
Credit Score
Perfect Credit? Credit scores in the United States can range from 300-850.
What can hurt my score?
- Making 30, 60 or 90 day late payments on any account
- Having credit card balances maxed out
- Having limited or no active credit accounts open
- Applying for too much credit in a short period of time
What can help my score?
- Make all current loan payments on time
- Keeping credit card balances 50% or less of limit
- Keeping 3 traditional accounts open and active
- Keep older credit card accounts open, do not close
Credit Basics
Having your credit report pulled can be stressful and confusing.
At Direct Financial, your Loan Officer will review and explain your credit report to you.
What information is on your credit report?
Included
- Personal information (Name, Address, SS#, DOB)
- Payment history on loans and credit cards
- Any accounts turned over to collection agencies
- Public Record such as bankruptcy
- Recent inquiries by any lender
Not Included
- Income
- Payment history on utilities, cell phone or rent
- Assets
- Marital status
Fixed vs. Adjustable Rate
Advantages
Fixed
- No risk of future rate/payment increase
- Easier to manage household budget
- Simple loan terms to understand
Adjustable
- Lower initial rate
- Good for buyers looking to move in 3-7 years
- Closing Costs may be lower
Disadvantages
Fixed
- Possible higher rate
- More restrictive underwriting requirements
- Higher closing costs
Adjustable
- Payments can increase over time
- Watch out for teaser programs
- Loan parameters can be difficult to understand (Caps, margins and Index)
How to Decide
- What type of property do you intend to purchase?
- How long do you plan to stay in the home?
- What is the future income potential and affordability?
- What is your current debt and credit situation?
- What amount of savings do you have available for a down payment and closing costs?
- Is local servicing important to you?
Rent vs. Buy
There are many factors to consider when deciding if buying a home is right for you. Listed below are some advantages and disadvantages of Renting vs. Owning.
Advantages
Rent
- Easy to move or relocate
- Fewer responsibilities for maintaining property
- Lower initial financial commitment
Buy
- Tax Benefits
- Financial Investment
- Stable monthly housing payment
Disadvantages
Rent
- No Tax benefits
- Subject to landlord restrictions
- Unknown future housing payment
Buy
- Long term financial commitment
- Higher overall living expenses
- Limited ability to move or relocate quickly
Disputes/Inquiries
The Consumer Finance Protection Bureau (“CFPB”) requires that loan servicers adhere to an established process for addressing Notices of Errors from Members as well as Information Requests from members as they pertain to loans. In order to submit a formal Notice of Error or an Information Request please send a written request to the following address:
New England Federal Credit Union
Attn: Loan Servicing
PO Box 527
141 Harvest Lane
Williston, VT 05495
Please include in the written request a detailed explanation of the error or the information you are requesting. Be as specific as possible and provide any information that you believe may be helpful. Also note that correspondence written on a billing statement will not be considered a formal request.
NEFCU will respond to your written request within five (5) business days to acknowledge your request and if possible to satisfy it. If we are unable to resolve the notice of error or information request at that time, we will acknowledge that fact and shall respond to you within thirty (30) business days provided that you provide any additional information requested that may be necessary.