Buying a home can be a very intimidating process for the experienced homeowner, so it’s only reasonable to say that for a first-time buyer it can be downright terrifying! 

It’s easy to get swallowed up by the terms and requirements of the mortgage world, things like escrows and rate locks, wondering why anyone would want to look at your college transcripts, being bamboozled by being told you don’t have enough debt (yes, there is such a thing) and all kinds of “little” details you would never even think of!

 I’ve gotten together with some of our most experienced mortgage originators (combined, these two have over 60 years in the biz!) to get some of their top tips for purchasing your first home!

Mr. Larry Potter (no relation to the wizard), the Director of Mortgage Lending at LACU, believes that planning and preparing is the key.  Start by speaking with a loan officer first to get pre-approved and go over the process to see what it will be like from start to finish.  They are able to estimate what it will actually cost you to purchase a home and what your eventual payment will be like.  Trust me, it adds up quick and you don’t want to be caught off guard when you find your perfect first home and realize it will be a $1,500/month payment!

Tom Wehmeyer is the Mortgage Loan Manager, and he truly is an expert at getting home loans approved!  If there’s a product or situation out there, odds are he’s dealt with it!  The man has more sayings (we call them Tom-isms) than you can count, but he is as wise as they come.  He’s a by-the-books kind of guy and can help you decide what is best for you by presenting the options.  He suggests a detailed conversation with a loan officer to discuss the details we will need to obtain and document to get you approved for a loan.  People are often surprised at the documentation they need to provide, things such as tax returns, utility bills, statements from landlords of your past 12 months payment history, etc.  Often times there are issues that can be easily cleared up, but there has to be knowledge that they are issues first and we can help identify what they might be!

His biggest recommendation is to determine your “threshold for pain”.  Don’t let a realtor or even a lender tell you what you can afford.  What you make in a month (gross income) divided by the debts reporting on your credit report (called a debt ratio) generally needs to be under 41% including the proposed payment on the new home.  The problem people run into is that they don’t consider that this ratio doesn’t account for vehicle insurance, groceries, entertainment expenses, car repairs, daycare costs or any of those “unpredictables”.  Your being comfortable with your payment is key, not just what the numbers say you should be able to afford.  We want to help you realize your dream and still be happy with your choice two, six or sixty months down the road.

So, if you’re thinking about a new home, now or in the future, give us a call, stop in or visit our website to set up an appointment with one of our very qualified loan officers first! Heck, you can even apply online! We’re here for you to help make that American Dream come true.

Ready to buy your first home? Listen up. Let’s speak mono a mono. Buying your first home can feel completely overwhelming, especially when you start crunching the numbers. We feel like it’s really important to work with people you trust and who will give you reliable advice (like us!). Know what else is helpful? A little extra cash.

Linn Area Credit Union is one of only a handful of financial institutions in Iowa that was approved to give out $50,000 worth of grants to First Time Home Buyers.  We’re able to do this $1,000 at a time. (A $1,000? Not too shabby!)

Let’s see if you fit the criteria:

• You have not owned a home in the last 3 years
• Your income does not exceed $54,720 for 1-2 person family or $62,925 for 3+ family household (income limits for properties in Linn County; other counties may vary)
• Property being purchased must typically be within a town with a population of at least 25,000
• Purchase price must not exceed $243,000

Not sure if you qualify? No worries! Just give us a call at 378-0101 x3 and one of our friendly loan officers will help you out!

There are only 50 grants available – but only through the end of the year – so hurry!

Want to learn more about our mortgage services? Click here to check out our rates, here to meet our helpful loan officers, here for our really cool mortgage calculators or here to apply for your loan online!

What do the words austerity, bailout, blog, woot, and truthiness all have in common?  Stumped?  No, I’ll wait, it’s okay. 

Still no answer?  Well, as amusing as it is to puzzle you all, I suppose I will make it easy for you.  All of these words have appeared as the number 1 most searched word list in the last ten years.  The Top Ten Words of the Year list is published by Merriam-Webster (they make dictionaries!) at the end of each year, showcasing the most searched words that can be linked to current events. 

This year, the chart topper was austerity.  Now when I saw this, I did exactly what many thousands of others have done this year: I looked it up!  Here is what I found… 

The quality or state of being austere.   

Now that explains it all, doesn’t it?  Further down I go, looking for something that makes sense and I find… 

Enforced or extreme economy.   

Oh, okay, that seems a bit more reasonable.  The search for this word peaked right around the announcement of the economic collapse in Greece and continued to pop up whenever there was news regarding newly impacted countries in Europe.  

Austerity is not just applied to a global economy or even a national economy, but a “personal economy” as well.  Everyone has taken steps to “trim the fat” out of their lifestyles to try to buckle down and pinch those pennies in hard times.  Myself, I decided I was eating out way too often for lunch!  Now, I find that I buy more groceries to stock my drawer here at work for lunches than I do for the cupboards at home!  I’m not sure if that’s a sign that I eat too much when I’m at work, I don’t eat enough at home, or I just spend too much time at work…but whatever it is, I’m spending less than I was before! 

As we begin a new year, many people are considering a financial overhaul to streamline their wallet/purse/satchel and cut the amount of plastic carried around.  Let me share a secret with you though, you can do sooo much more!  And now I’m going to tell you HOW! 

Interest rates are so low right now, it’s ridiculous!  Mortgage rates are creeping back up a little here and there (but are still remarkably low – take a look for yourself here) so it’s the perfect time for you to consider a refinance. Or, say, if you think that your belated Christmas gift for this year should be a new house, we would love to help you out there as well!

I’m a numbers guy, all the talk in the world won’t convince me of anything unless I have the numbers to convince me.  Right now, rates are sitting around 4.75% on a 30 year fixed loan (click here to see our latest rates!).  If you are looking at a loan of $100,000 that gives you a monthly payment of $521.65 (principal and interest).  Let’s bump that up to 5.25%, where we were a little over a year ago, and you get $552.20 per month.  Well that’s only a difference of $30.55 right?  What’s the big deal?  Here it is, take that and multiply it by the number of payments over 30 years and you’ll see what the big deal is!  

I’m sure you’ve run the math by now and are amazed to see that it’s a difference of almost $11,000 over the life of the loan.  Don’t you think you could come up with something better to do with that money?  Here are some ideas, in case you can’t:

• An original New York Taxi Painting by Miguel Freitas (it’s on Ebay!)
• A 2 Carat Leo Diamond engagement ring (From Jared, it’ll even make your car’s GPS love you!)
• A full size robot model used in I, Robot (It lights up, but it will not do your laundry.  Conversely, it won’t rebel and try to take over the world either!)
• Your own fleet of Tata Nano cars, four to be exact ($2500 a piece, imagine a smart car got caught in the closing doors of an elevator and was smushed into an even smaller car!)
• Or you could pay off my student loan debt….just a thought!

So, while you’re doing your planning for the coming year, and think you want to take a more austere approach to life, think about all your options!  When you do, make sure to check out Linn Area’s mortgage website (click here) for some additional ideas!  If you’re like me, the calculator section is pretty enlightening.  You can do a rent vs. own comparison, look at potential tax savings, and find out the amazing benefit of paying just a little extra on your mortgage payment each month, among other things! 

Do you have any creative ways you have practiced austerity in the past or plan to practice it in 2011?  We would love to hear about them!