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If you can, try a credit union. State Employees is honest beyond belief and will not put you in a bad loan.
I looked at their website, without knowing whole lot of details about their program, their rates looks pretty decent (Keep in mind the rates they listed in their website are with 1% origination fee). I am a member of a large credit union that I always use and their rates are comparable to this. Do you know what is the criteria to become a member?. Do you have to be a state employee or something?.
[I base my information on Freddie Mac's "locked" rates of the previous week. That seem to be 6.13% with a 0.5% origination fee for a 30 year fixed conventional and the compare rate with SECU is 6% with 1% orig fee.)
Also do you know their closing costs off hand. That could bite you.
SECU offers decent ARMS, but they can't compete when it comes to 30 year fixed mortgage. They are very limited in the loan programs they can offer. I met with a loan officer there last year (I am a member of SECU) and he told me point blank that they could not compete when it came to a 30 year fixed. I faired much better going through a mortgage broker.
If you're interested in credit unions, Coastal Federal Credit Union is another option. Last year when we bought our house, we checked with a mortgage broker and a couple other lenders, but CFCU had the best rate for us. COASTAL - Experience the Difference.
Many employers in the area are affiliated with this credit union, but I think anyone can join if they pay a one-time fee of $15. Double check that just to be sure.
I looked at their website, without knowing whole lot of details about their program, their rates looks pretty decent (Keep in mind the rates they listed in their website are with 1% origination fee). I am a member of a large credit union that I always use and their rates are comparable to this. Do you know what is the criteria to become a member?. Do you have to be a state employee or something?.
[I base my information on Freddie Mac's "locked" rates of the previous week. That seem to be 6.13% with a 0.5% origination fee for a 30 year fixed conventional and the compare rate with SECU is 6% with 1% orig fee.)
Also do you know their closing costs off hand. That could bite you.
# Employees of the State of North Carolina and Federal employees working in conjunction with State departments
# Employees of Public Boards of Education
Last edited by autumngal; 03-15-2008 at 05:42 PM..
Reason: copyright issue, read the TOS please
In order to join SECU you have to be a state employee, related to a state employee, or related to a member. You can also join if you share an address with a member, such as a roommate. I am closing on my house on Monday and I went with their 2 year ARM. My rate is 4.25% with 10% down. There is no PMI on their ARMs even for 100% financing and the rate can only go up or down 1% every two years.
# Employees of the State of North Carolina and Federal employees working in conjunction with State departments
# Employees of Public Boards of Education
So if I am reading this right then not just anyone can do the mortgage loan there. You have to be a state empolyee (ish). Well that doesnt work well even though they have good rates.
Well there is a big difference between a prime ARM and a subprime arm in terms of foreclosure rate. Prime ARM's are not getting foreclosed on like subprime ones are.
The A- ARMs are not doing so well either. The Option ARM was mostly A or A- paper and that barrel is about to burst. I think the reason not a lot of Prime ARMs are getting foreclosed is because by definition a Prime loan either requires 1) proof of income or 2) a downpayment.
As I said the main factor affecting foreclosures (so far) has not been credit scores or adjustable rate increases. The biggest factor was lenders and borrowers (together in many cases) over-stating income and choosing teaser rates to get far more home than they could pay for.
As for the comments on the SECU, I agree they are a great option. It is restricted and not just anyone can join (other credit unions have different rules) but for those that can they really should check them out.
They are competition, but I advise my clients that work for the state to speak with a loan officer there to compare options. You win some and you lose some, but at the end of the day you can stay in business and get referrals for doing the right thing.
I hope things work out as planned for you. Your adjustable rate is 5%, but one can get a fixed at 5.5% and rest easy.
My point about not knowing what the future holds, is that people can have plans and they don't work out. What then for a person that had a variable rate? They may plan on selling in 3, 5, 7, or 10 years, but what if they don't? What if then, interest rates have risen dramtically and what if their equity did not turn out as planned. I will always stay with a fixed, as I will never be surprised, especially as I never sold when I thought I would in the beginning. I sell when the market dictates.
Best of luck to you, though.
I've gotta agree with Gator on this one. People take out ARM AND FIXED loans they can't afford. That is the real problem, not most of the programs. It's the misuse of the programs on the part of the borrowers AND the lenders.
I've owned homes with an ARM and a FIXED. With the ARM, I knew we'd be there 2 or 3 years tops, it was an awesome rate, and even other brokers told me they couldn't touch it and I should go for it. That loan saved me thousands. If you know what you are doing, an ARM or even interest only can be a good tool, if you can't afford it unless you go that route, it's probably not a good idea. That doesn't mean it can't work out, but there is definitely more risk involved, as many losing their homes now know.
Saying that you don't know what can happen, using hypotheticals doesn't make the fixed the ideal thing to do. As far as I am concerned, any unfortunate event that would have made me unable to pay my ARM would have been significant enough that I couldn't have paid a FIXED mortgage payment either.
The A- ARMs are not doing so well either. The Option ARM was mostly A or A- paper and that barrel is about to burst. I think the reason not a lot of Prime ARMs are getting foreclosed is because by definition a Prime loan either requires 1) proof of income or 2) a downpayment.
As I said the main factor affecting foreclosures (so far) has not been credit scores or adjustable rate increases. The biggest factor was lenders and borrowers (together in many cases) over-stating income and choosing teaser rates to get far more home than they could pay for.
As for the comments on the SECU, I agree they are a great option. It is restricted and not just anyone can join (other credit unions have different rules) but for those that can they really should check them out.
They are competition, but I advise my clients that work for the state to speak with a loan officer there to compare options. You win some and you lose some, but at the end of the day you can stay in business and get referrals for doing the right thing.
Now, you're an ethical person, and I tip my hat to you as an ex-banker.
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