30 Apr

What to Do If You Can’t Pay Your Loans During the Coronavirus

girl sitting on bed with bills and credit cards due debt

The coronavirus (COVID-19) has significantly altered how we manage our lives and our workplaces. Many people face a drop in wages or work losses entirely and may find it impossible to keep up with their student loans, mortgage payments, credit card bills, and other debts.

In this post, you’ll get details on the different solutions that may be open to you if you’re concerned about falling behind in bill payments, as well as what you can do to try and protect your credit during this crisis.

Federal Student Loans

The federal “Coronavirus Aid, Relief and Economic Security Act” or the “CARES Act” (H.R. 748) suspends payments without interest for federal student loans held by the United States Department of Education for a total of six months, until 30 September 2020. The termination of payment is automatic, you don’t have to ask for it.

Mortgage Payments 

As soon as you know you’ll be having trouble making your next mortgage payment, contact your loan service company to find out what choices are open to you. You may be eligible for default under the CARES Act or some form of short-term immediate mortgage relief, such as a late-payment waiver.

The CARES Act also imposes a 60-day foreclosure moratorium on federally funded mortgage loans and loans issued, guaranteed, or insured by the Department of Agriculture. This moratorium includes much of the country’s residential mortgage loans.

Property Tax

 If you are late in paying property taxes, several counties are enforcing a moratorium on property tax foreclosures and tax sales. Call your county treasurer’s office or search online to see if your region has a moratorium.

Credit Cards, Personal Loans, Small Business Loans

 Many credit card issuers have issued announcements on their websites detailing a range of forms of customer assistance during the COVID-19 outbreak. Accessible assistance covers credit line changes, forbearance collection, and missed payments. With our credit cards, RMLEFCU provides a free balance transfer and competitive APR*.

When you need money, various lenders, and the U.S. Small Business Administration (SBA) is providing loans to those affected by the coronavirus.

Utilities, Phone, Internet

Many phone service and internet providers also waive late charges and postpone shutdowns. Some providers provide free Internet service to new customers or unrestricted data to current customers for a limited period of time, such as 60 days.

Auto Loans 

Lenders offer payment extensions and other options to those that may have trouble paying their car payments. If you refinance your auto loan with RMLEFCU, we offer a 90-day payment free period!

You Have Options at RMLEFCU

The best thing to do is to contact your service or loan providers immediately. RMLEFCU can help you cope with financial stresses during the COVID-19 recovery period. For instance:

  • Consider a low rate personal loan to pay bills to those institutions who aren’t as understanding.
  • Debt protection offers superb financial shielding to cover loan payments in the event of death, disability, or involuntary unemployment.

These and other services are at your fingertips. Please reach out to our Member Experience Team for more information! Email them at lending@rmlefcu.org.

05 Feb

What is a HELOC and Why Should You Have One?

Home Equity Line of Credit (HELOC) piggy bank under a house

In many places, home values have grown considerably for recent years, providing homeowners an opportunity to tap into the equity of their homes to make renovations or otherwise boost their overall financial picture.

Although a home equity line of credit (HELOC) may be a good way to quickly access cash, it is important to proceed with caution and have good reason to do so. We’ll explain the ins-and-outs of a HELOC and some reasons why getting one could be the right move for you.

What is a HELOC?

A home equity line of credit, or HELOC, is a second mortgage that gives you access to cash based on the value of your home. You can draw from a home equity line of credit and repay all or some of it monthly, similar to a credit card.

You borrow against your equity with a HELOC which is the value of the house minus the amount that you owe on the primary mortgage. Which means:

  • You might lose your home to foreclosure if you don’t make the payments because you’re using your home as collateral.
  • To get a HELOC you need to have plenty of equity. Typically, a HELOC allows you to borrow up to 85% of the value of the home subtracted by the amount you owe on the loans.

For something like a major repair or remodeling project that increases your home value, taking out a HELOC would be great. You should not get a HELOC if you’ll be putting yourself at risk of losing your home because you are unable to pay back what you are borrowing.

How Does it Work?

A HELOC works kind of like a credit card. You will borrow money up to a certain credit limit set by the lender and then pay it back, along with interest, the borrowed amounts. This option can offer more flexibility and you can even withdraw and make payments daily or weekly.

How Much Can You Borrow?

The credit limit for a HELOC depends on a number of factors, including your income and outstanding loans, but it is largely determined by the market value of your home and the amount you owe on your mortgage.

Say you have a $500,000 home on your first mortgage with a balance of $300,000 and your lender allows you to use up to 85% of your home’s equity. You may receive a HELOC with a limit of up to $125,000:

  • $500,000 x 85% = $425,000.
  • $425,000 – $300,000 = $125,000, your maximum line of credit limit.

What Would I Use a HELOC For?

A HELOC is commonly used for home repairs and upgrades. If you use the money to buy, build, or substantially improve your house, the interest on your HELOC may be tax-deductible.

Some people also use home equity lines of credit to pay for education. You should not use a HELOC to pay for vacations and vehicles because those expenses do not build wealth, and if you default on the loan, you run the risk of losing the home.

How to Get a Low-Interest Rate

 You can automatically get a low-interest rate just by being a member of RMLEFCU! A good credit score can lower your interest rate even more. Order your free annual credit report from one of the three credit offices (Experian, TransUnion or Equifax) or check the RMLEFCU app to check your credit score. If you’re close to the cutoff lines between a good and excellent score, spend some time and raise your score before you apply for the HELOC.

When you’re ready to have a little extra cash, give RMLEFCU a call at 303-458-6660 or email lending@rmlefcu.org. We’ll get you the best rates.

10 Sep

First Time Home Buyer Mortgage Tips

First Time Homebuyer Mortgage

Buying a home can be nerve-racking, especially if it’s your first one. When you find your ideal home, you should secure a mortgage that makes sense for you today and for the future. To ensure you can do this appropriately, here are some insider first-time homebuyer mortgage tips.

Apply for What You Can Afford Today

 First-time home buyers may be buying too much home. You may qualify for a large mortgage but making that steep monthly payment will impact all other parts of your life. Instead of shopping for a home that fits for the mortgage you qualify for, look at monthly payments to see if it is doable for your finances currently. When you’re making high monthly payments on a mortgage for your home, you can put yourself in a tough situation and not have money left for other things like savings and travel.

Shop for Your Mortgage 

Shopping for your mortgage is crucial and, when you ask the right questions, it can save you thousands of dollars. While filling out a mortgage application is tedious and time-consuming, that should not stop you from applying for a mortgage from more than one source.

Similar to shopping around for any large purchase you’re making, you should apply for a mortgage and get competitive rates. RMLEFCU’s mortgage application process is a breeze with our quick, local decision-making. We also have competitively low, fixed rates for home purchase and a variety of repayment terms available. On top of that, we also have helpful loan advisors with working knowledge of the local Colorado real estate market to help you get the best deal.

 Mortgage Down Payment

One prevailing myth about mortgages is that you’re required to put 20% down. While you will usually get a lower interest rate if you have a 20% down payment, that is not the threshold for achieving mortgage financing. Many lenders now permit much less and first-time homebuyer mortgage programs allow as little as 3% down. To see what your monthly payments will be, play around with a down payment calculator to help you land on a goal amount.

If you are a first-time homebuyer and are shopping around for a mortgage, you may find it difficult to sort through all the financing options. Take some time to read over these tips accordingly. A good mortgage broker or mortgage banker should be able to help steer you through all the different programs and options. If you have any questions about a first-time homebuyer mortgage or would like to speak to one of our loan officers, email us at lending@rmlefcu.org.

10 Jul

 How to Refinance your Mortgage

Buying a home is a major milestone in your life, but the journey continues! After a few years, you might be ready to refinance your mortgage. Refinancing your mortgage is getting a new one to replace the original.  People do this to get a better interest term and rate or to lower their monthly payments.

Refinancing a mortgage isn’t a simple phone call or online form, and there may be more paperwork involved than when you first bought your home. Here’s how to navigate it and what you can expect.

Find Your Mortgage Refinancing Goal

Before you begin the process of researching different mortgage rates, it’s important to consider why you want to refinance your home loan in the first place. This will help direct your process from the beginning.

Some options are to refinance your mortgage for a lower monthly payment, a shorter loan term, or better interest rates. Lowering monthly payments is the most common goal, however, that usually means you are opting for a longer repayment term.

Shop for the Best Rates 

Once you’ve decided on your goal, it’s time to shop for the best rates. Using a mortgage refinance calculator can help you estimate and shop for the best mortgage. On top of that, you should also shop for your best mortgage refinance rate and get estimates from lenders. There are also closing costs that are associated with refinancing your mortgage. Finding deals or low closing costs are also something you should look for.

Luckily for you, RMLEFCU is offering a lender credit of $500 if you are refinancing from a different institution! We have rates as low as 4.0% APR* on a 30-year mortgage or 3.5% APR* for a 15-year mortgage. Don’t hold off on contacting us – this offer is only available through August 31, 2019.

Final Tips

Lowering your monthly rate isn’t the only reason some people refinance. You can also refinance to get rid of mortgage insurance or tap into your home equity as cash in a cash-out refinance.

For any mortgage refinance, there are also fees and expenses. It’s important to have cash on hand to take care of those additional costs.

Refinancing your mortgage for the right reasons and with a good rate and suitable term can enhance your financial position. Contact an RMLEFCU lender today to receive $500 toward your closing costs and great low rates today.

17 May

Getting Your First Mortgage Through a Credit Union- Lower Rates and No Mortgage Insurance

Mortgage Through a Credit Union

When it comes to buying your first home and applying for a mortgage loan, finding your dream home is only half of the battle. There is the task of making sure you understand all the requirements of applying for a loan, figuring out what type of mortgage is best for you, and making sure that your lender has your best interests in mind. Buying a home is probably the biggest purchase you will ever make, so there is a lot at stake when choosing a lender.

All of these reasons are why getting a first mortgage through a Credit Union like RMLEFCU is becoming more and more popular. Credit Unions operate very differently than big, private banks and in turn can offer you better service, lower rates, lower origination fees, and NO mortgage insurance if you’re putting down less than 20%.

Yes, you heard correctly! NO mortgage insurance required.

No Mortgage Insurance (PMI)

For many first time home buyers, the biggest obstacle to getting the ball rolling is the intimidating task of saving up 20% of the home cost or facing a monthly charge of $100-$300 for mortgage insurance. At RMLEFCU, you can have your cake and eat it too!

Is it up to the lender whether to charge mortgage insurance on loans with less than 20% down, and at Rocky Mountain Law Enforcement Federal Credit Union, there is none required. You can put less than 20% of the total home cost down and still avoid a monthly PMI fee.

Low Interest Rates and Origination Fees

Credit unions are able to offer lower than average interest rates and origination fees because of how their business models differ from that of a traditional bank. Credit Unions (like RMLEFCU) are owned by the members and run as close to cost as possible. Any profits earned don’t go into the executives’ pockets, members democratically decide where they go, which is usually to lowering rates and fees.

On a huge, long term loan like a mortgage, small fractional increases in interest rates can have an enormous impact on how much you will pay out over the life of the loan. Getting as low an interest rate as possible is a vital part of getting the best mortgage.

Better Service

Credit Unions are known for their great service. It all ties back to the business model; a Credit Union is owned by its members and decisions are made democratically. This involvement by members in the innerworkings of the business eliminates the divide between bank employees and you.

In addition, RMLEFCU is a local, Colorado credit union made up exclusively of law enforcement officers, support staff, and their families. Our loan officers understand the Denver real estate climate, your situation, and know you by name. Your experience applying for a loan will be much more personal and specific to you, not just how you add up on a piece of paper.

Make your dream of being a home owner happen sooner than you thought possible by getting a mortgage through a credit union. With no PMI and low rates and fees, you can’t afford not to!

15 Mar

Tips for the First Time Homebuyer in Colorado

 

Imagine you are at the starting line of a marathon. You’re contemplating whether your training was enough, what you ate the night before, and what you will do if things go south. You’re anticipating the reward at the end – the accomplishment of having persevered through unwelcoming territory both mentally and physically. While this narrative is about the sport of running, it could also describe the home buying process in Colorado, especially for a first time homebuyer. You need to be prepared, patient, and ready for roadblocks. But before you take off from the starting line, there’s a lot of prep work to do.

Examine why you want to buy and not rent

Maybe you think there is an opportunity to earn a return – Over time this may be true in our market as home values have been steadily rising, but unless you are very handy, or have the money to hire a contractor to renovate your home – this should be far down on your list of reasons to buy and not rent.

Perhaps you want to buy because rents are just as expensive as a mortgage. Rent Jungle reports for February 2017 show that 1 bedroom apartments in Denver rent for $1,367 a month on average and two-bedroom apartment rents average $1,748. Your mortgage could be comparable. Especially because with a first mortgage loan from RMLEFCU doesn’t ever carry mortgage insurance.

“Pride of ownership” remains one of the top reasons to buy. This one really resonates with buyers who believe buying is the best way to make an investment in their own future and the future they envision for themselves.

If all else fails, you can always leave it up to science and math with this really useful test for renting or buying.

Once you’ve decided to buy – get your affairs in order.

First, check your credit report – Make sure there is nothing surprising. Remember: don’t close old accounts and for Pete’s sake, refrain from making other large purchases if you are hoping to bid and secure a house soon.

Next, prepare copies of everything you will need to apply for a loan. At a minimum you will need:

  • W-2s or federal tax returns for the past two years;
  • Most recent pay stub for proof of income;
  • Most recent statements for any loans or outstanding debt;
  • Statements for bank accounts and other assets for the past three months;

Find out what you can afford by meeting with RMLEFCU’s loan department

The loan application process at Rocky Mountain Law Enforcement Federal Credit Union is easy, quick and attentive from start to finish. We offer competitively low, fixed rates with no PMI (mortgage insurance) to take you from renter to homeowner with a variety of repayment terms to suit your individualized situation. Our loan advisors are local, experienced and can provide fast approvals and loan letters during the bidding process.

Three reasons to use RMLEFCU for your First Mortgage:

  1. No Mortgage Insurance (PMI) – Mortgage brokers and banks require you to have mortgage insurance if your down payment isn’t high enough. We trust our members so we don’t require PMI!
  2. Lower Origination Fees – We keep your initial down payment lower.
  3. Low Fixed Rates – Your payment will stay the same for 30 years. No surprises as interest rates climb.

A word of advice: Aim for a mortgage payment that is no more than between 25-29% of your pre-tax income.

  • Find a realtor in Colorado

Many people look to their immediate social network, i.e. friends and family, when selecting a realtor. But rather than worry about whether your co-worker’s wife will be upset that you went with a different real estate agent, worry more about what an agent should be doing for you.

Here’s a few tips for finding a realtor that matches your expectations.

Once you narrow it down to a few contenders, prepare questions to ask. The most important clue is how responsive they are to you. In a market that depends on 24/7 availability, a realtor needs to prioritize your phone call or email.

  • Take a deep breath as a first time homebuyer.

Prepare for stress by remembering to be patient, aggressive, and motivated. Get ready to chip away at a wish list of things you want in a home and focus on your needs.

  • Do your research for the area where you want to live.

Are there young people nearby, or will you be surrounded by retirees? Is there new development going in that will impact your experience living there? How much of a commute are you willing to deal with? How are the schools? Even if you don’t have kids, consider how the quality of schools may have an impact when you decide to sell.

  • Find a trusted home inspector.

Usually your realtor will have someone they work with. If you decide to branch out, keep these tips in mind.

  • Don’t come to the table with baggage. The less stipulations you have as a buyer, the better.

Consider RMLEFCU your running coach in the marathon that is home buying. We have a local lending team that is experienced and familiar with the needs and wants of law enforcement officers and their loved ones. Put us to work for you and we’ll work hard to show that you’ve made a wise choice.