- How much can I borrow?
- How much house can I afford?
- When is my rate locked in?
- How do you determine the value of my
home?
- Can I borrow the money for closing
costs or do I have to pay in cash?
- What if I do not qualify for a mortgage?
Can I get my $300 back?
- Is flood insurance required?
- What about my taxes and insurance?
Do you require an escrow account?
- How do I make payments?
- Is there a pre-payment penalty?
- Will MECU hold my mortgage?
- What could potentially cause me problems
with my application?
- How much are closing costs? What is
included in closing costs?
- What are pre-paids?
If your questions are not listed here please
call a mortgage loan officer at (920) 733-3243 or email.
Q: How much can I borrow?
A: If
purchasing, you may borrow up to 95% (in some cases,
97%-100% is available) of the appraised value of the
home or purchase price, whichever is less. Any loan
above 80% will require Private Mortgage Insurance (PMI).
PMI insures the lender against default by a borrower
who does not have 20% invested in the property. This
additional cost would be added to your payment.
The maximum single family home mortgage is $417,000.
Greater loan amounts are available for 2-4 unit properties
(available if you live in one of the units).
If refinancing, you may borrow up to 95% of the appraised
value of your home. PMI is required for any mortgage
higher than 80%.
If you want to borrow more funds in addition to paying
off your current mortgage which is called “cash
out,” then the maximum allowed is 70%, and in
some cases 90%, of the appraised value. PMI is required
for any mortgage higher than 80%.
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Q: How much house can I afford?
A:
There are numerous variables that go into this
question. You will get the most accurate answer by speaking
with a mortgage loan officer. Know your gross income
and what your debts are to help get them started. Here
are a few commonly used benchmarks to get you started.
On average your mortgage (principle and interest), property
taxes, and homeowner’s insurance should not exceed
25-30% of your gross monthly income. Your total debts
(mortgage included) should not exceed 36-40% of your
gross monthly income. Use our calculators
to estimate your payments using different loan amounts.
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Q: When is my rate locked in?
A: You
have the option of locking in your rate upon our receipt
of your completed application and your initial $300
or locking in at any time after this, but prior to the
preparation of closing documents.
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Q: How do you determine the
value of my home?
A: MECU
contacts a qualified residential appraiser in your local
area to determine the appraised value.
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Q: Can I borrow the money for
closing costs or do I have to pay in cash?
A: For
purchases, the closing costs cannot be added onto your
loan.
For refinances, you may pay the $300 up front towards
the appraisal, processing fee and credit report. The
rest of the closing costs may be financed with the mortgage
provided you have enough equity in your home to do so.
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Q: What if I do not qualify
for a mortgage? Can I get my $300 back?
A: These
funds are not refundable unless it is determined prior
to ordering the appraisal and other pertinent documents
that your application does not qualify. If after that
time it is determined you/we cannot continue with the
loan you would receive your $300, minus up to $250 for
processing fees.
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Q: Is flood insurance required?
A: Yes,
if your property is found to be in a flood zone area,
then federal law requires it, as this insurance is for
your protection.
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Q: What about my taxes and
insurance? Do you require an escrow account?
A: Possibly.
Depending on the equity in your property. If you have
less than 20% equity, you will be required to escrow
for both taxes and insurance. If you have more than
20% equity and choose to waive escrow, you may be interested
in our Property Tax Club
Account.
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Q: How do I make payments?
A: Your
payment can be automatically taken from your checking
or savings account monthly or bi-weekly. If you choose
to set up bi-weekly payments after closing there is
a $100 set-up fee. For your convenience you can set
up your payroll deduction to include this payment and
this way you’ll never have to worry about your
payment being late! You also have the option of having
coupons and mailing your payments monthly.
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Q: Is there a pre-payment
penalty?
A: No.
You may apply extra funds to your mortgage at any time
and for any amount.
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Q: Will MECU hold my mortgage?
A: Our
mortgage company, Associated Mortgage Inc. will purchase
your loan from MECU. They will hold the servicing locally
in Wisconsin. They will not sell the servicing of your
loan to another company.
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Q: What could potentially
cause me problems with my application?
A: Here’s
a list of “potential problems” when applying
for a mortgage:
1. Bankruptcy within the last four years. A minimum
of 24 months is required before an application is
considered for a fixed rate mortgage.
2. A change of profession within one year (student
status is exception).
3. Unusual property for area (log home, stilt home,
earth home, large acreage).
4. Late payments on mortgages, loans, or credit cards
within the past 12 months or lack of credit history.
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Q: How much are closing costs?
What is included in closing costs?
A: Closing
costs can vary because each borrower’s situation
is different (i.e. purchases or refinances). The range
is typically $1000-1500. You will receive a Good Faith
Estimate itemizing the costs associated with your loan
after you apply. The following are most of the items
included in your closing costs: Appraisal, Title Commitment
and Policy, Underwriting, Processing, Recording Fees,
Tax Servicing and Assessment, Flood Certification, and
Settlement.
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Q: What are pre-paids?
A: Pre-paids
are separate from closing costs, although it may seem
like they are lumped together. Pre-paids include the
amount of interest that accumulates between the day
your mortgage is dispersed and the first day of the
month you make your first full payment. If you are escrowing
for your taxes and insurance, pre-paids also include
the amount of each of these that needs to be deposited
into your escrow account so that when they are due,
there is enough in the account to pay them. A mortgage
loan officer can explain pre-paids to you in more detail.
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