Finding the Mortgage Loan to Meet Your Needs | Nutmeg State Financial Credit Union Skip to main content

Finding the Mortgage Loan to Meet Your Needs

May 11

Finding the right mortgage loan can be a time consuming and confusing process, but we’re here to help! A mortgage is a huge long-term financial commitment so selecting the right one involves a lot of research and a clear understanding of the financial impact it could have.

As you know, we’ve always offered mortgage loans, and recently we added more options for purchase and refinance. We understand that not everyone can qualify for a traditional loan and may need to explore other alternatives.

With that in mind, we now offer HARP and FHA loans. FHA loans are designed to help first time home buyers who don’t have a lot of money to put down; and HARP loans are designed to help people who are underwater in their mortgage (home value is less than the mortgage). This is part of a federal program to help keep people from losing their homes. This program ends at the end of the year, so now is the time to get started!

To help you determine which program best fits your needs, below are some of the features of each program.

HARP – Home Affordable Refinance Program

These loans are for people who are current on their mortgage payments, but owe as much if not more than the current home value (current Loan-to-Value ratio is greater than 80%).

  • Closing costs can be bundled into the new loan so very little cash is needed up front
  • Can be used on primary residences, second homes or investment properties
  • For mortgages originated on or before May 31, 2009
  • Today’s market rates are more than 30% lower than in 2008
  • You can build equity faster if you switch from a 30-year mortgage to a 15-year mortgage

FHA Loans (Federal Housing Administration)

The FHA loans allow buyers to get a mortgage with a down payment as low as 3.5%. The underwriting requirements to qualify for an FHA loan are usually less rigid than traditional 30 year mortgages, and give those that don’t have a large down payment a viable option for financing.

  • Typical for First-Time Home-Buyers
  • Conventional mortgages generally require borrowers to have debt-to-income of 45% or less, while the FHA allows borrowers to have a debt-to-income up to 57%
  • Minimum 640 credit score
  • Shorter time frame following major credit problems

Conventional Mortgage Loans

Conventional loans can be either a fixed or an adjustable rate. Fixed-rate mortgages have a set interest rate for the entire length of the mortgage term. Adjustable-rate mortgages (ARM) offer a low introductory rate for a fixed period of time followed by periodic adjustments.

  • Require between 5-20% minimum down payment
  • Only require Mortgage Insurance if the loan exceeds 80% of the loan-to-value
  • Credit sensitive
  • Can cover much higher loan amounts
  • Can cover second homes and investment properties, while FHA loans do not

Whether you are buying a home or looking to refinance a mortgage, we can help you make the best decision and get you a great rate as well! Call us for more information!


John Holt
President and CEO