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Tara’s Refinance Story  by Tara

December28

“Rates are at a historic low! Now is the time to refinance!”

Unless you’ve been living under a rock for the last year, you’ve heard this at least a dozen times. When my husband and I became homeowners in 2008, we locked into a rate that our loan officer was ecstatic about because it was “so low!” As the years passed, the rates got lower and lower. Just like you, I kept hearing, “The rates are lower than we’ve ever seen! NOW is the time to refinance!”

The idea of refinancing kind of scared me. It sounded almost as fun as going to the dentist or listening to an album featuring nails on a chalkboard. My husband and I had avoided it like the plague until September of this year. Rumor was if your APR was 4.00% or higher, you absolutely needed to look into refinancing. People seemed to be saving a ridiculous amount of money – and, since our APR was higher than 4.00%, I thought it was worth a shot.

What’s really cool about our mortgage department is that they can tell you pretty quickly (either in person or over the phone) whether or not you’d save money by refinancing. My husband and I sat down with one of our helpful mortgage loan officers who ran through several scenarios (15 year, 30 year, various other combos). The loan officer seemed to be almost as excited as we were about the difference refinancing would ultimately make in the life of our loan.

Many people find that they can reduce the amount of money they would have to pay each month. We decided to keep our payments the same and, instead, shorten the life of our loan. Thanks to our refinance, we will have our house paid off 8 to 10 years faster than if we had ignored all the yammering about historically low rates. Yes, we did have to bring a little money to the table

Curious about the process? Let me give you the nutshell version:

We met with a loan officer and locked into a new, much lower rate at the end of September. My husband and I had to provide some paperwork, such as our most recent pay stubs, most recent mortgage statement, and our most recent bank statements. (DON’T WORRY! These things are super easy to get your hands on, thanks to online access to accounts! You just need to print stuff off instead of digging through the piles of paperwork you have stored away.)

Linn Area Credit Union selected an appraiser, who then contacted me for an appointment. This was the part I was most nervous about, but it was super easy. You don’t have to clean to closets out, TRUST ME! The appraiser is looking at the overall big picture, not the dust bunnies. Not that I have any of those… Anyway, he had performed the appraisal and returned all of the documents within 3 weeks of us locking into our rate!

Now here’s the part where you get to kick back and relax while Linn Area Credit Union takes care of the rest behind the scenes. What kinds of things are they doing? I’ll sum it up in one word: PAPERWORK. Bleck. So glad we didn’t have to deal with any of that jazz! Occasionally, they’ll need a little more info from you if requested by the underwriters (dun dun dunnnn). We had to resubmit our latest mortgage statement. *shrug* Whatever, no biggie. The next time I had to do anything for our refi was when I was asked what a good time of day would be for our closing. I’m serious! It was THAT easy. Heck, I spent more time signing documents at closing than I did on the rest of the process combined!

Our entire refi process took about 45 days, but they can take up to 60.

So if you’ve been dragging your feet thinking that refinancing was going to be too big of a pain in the tuckus, please at least call one of our loan officers at (319) 378-0101 ex.3 to see if you’re missing a HUGE opportunity! You can also check out rates, find out about our loan officers or apply online at www.linnareacu.org/mortgage.

WE WANT TO KNOW: Have you refinanced? How much did you save??

Tips for Buying Your First Home  by Matt

September27

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.

Free Money for First Time Home Buyers!  by Tara

September13

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!

You might be austere and not even know it!  by Matt

January11

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!