Listen: At Home on the Lakeshore | UnitedOne Credit Union

Podcast: Choosing the Right Mortgage for You
Authored By: UnitedOne Credit Union on 11/2/2023

There is no one-size-fits-all mortgage product. Navigating the mortgage market can be overwhelming, with a multitude of financing options available to homebuyers.

Luckily for you the Local Home Loan Experts at UnitedOne Credit Union can provide guidance and help you choose the perfect mortgage type that suits your unique needs and financial situation.

“We look for that best one that fits your specific needs,” said UnitedOne Mortgage Specialist Linda Serrano, NMLS # 441416.

Make an appointment today to discuss your home loan options. You can also listen to UnitedOne’s Local Home Loan Experts go over the different mortgage products available and the benefits of each in the latest edition of their podcast, At Home on the Lakeshore.

“It’s OK to ask for different options,” said UnitedOne Mortgage Specialist Julie Peot, NMLS # 441412. “When we sit down with people, we can present two, three, four different options to you at one time.”

1. Conventional Fixed-Rate Mortgage
The interest rate remains constant over the life of the loan, typically 15, 20 or 30 years. This provides predictability for homeowners as their monthly payments remain consistent. Conventional loans often require a good credit score and a down payment. It’s an excellent choice for those seeking long-term ownership and financial stability.

“Most of the time these get sold on the secondary market, meaning we do all the work initially (at UnitedOne) but the loan itself gets sold to another service company and then your payment is made to that company,” UnitedOne Mortgage Specialist Julie Peot said.

2. ARM (Adjustable-Rate Mortgage)
This loan offers a lower initial interest rate than a fix-rate mortgage. However, the interest rate can fluctuate periodically based on a specific benchmark. This makes ARMs more suitable for people planning to stay in their homes for a relatively short period.

“ARMs can be 5/1, 7/1, 10/1. That first number, that’s how long the rate is locked in for and then, for example, after the five years it’s subject to change annually or every year after. These mortgages stay here at the credit union. We’re here to help from start to finish,” UnitedOne Mortgage Specialist Julie Peot said.

3. WHEDA (Wisconsin Housing and Economic Development Authority)
It’s a unique mortgage program for Wisconsin residents only. WHEDA provides low and moderate-income borrowers an affordable financing options with competitive interest rates, flexible down payment requirements, and both fixed-rate and adjustable-rate options.

“It's geared for the first-time homebuyer, but you don’t have to be a first-time homebuyer anymore. We can actually get you into a WHEDA product, but you can only have one WHEDA product at a time and you have to live in the home. So, if you’re planning on moving out and renting it out, you will have to get out of that loan in order to rent it out,” UnitedOne Mortgage Specialist Linda Serrano said.

4. VA (Veterans Affairs)
VA loans are available to eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. These mortgages are backed by the U.S. Department of Veterans Affairs, offering several benefits such as low or no down payment requirements, competitive interest rates, and no private mortgage insurance (PMI).

5. FHA (Federal Housing Administration)
It’s a government-backed initiative designed to assist low and moderate-income borrowers. FHA loans require a lower down payment and have less stringent credit requirements compared to conventional loans. However, borrowers are required to pay mortgage insurance premiums, which increases the overall cost of the loan.

“Sometimes credit might be a challenge, and FHA offers some really good products for not the perfect file because of course not everybody has the perfect file, but we have financing for all these types of files,” UnitedOne Mortgage Specialist Julie Peot said.

6. USDA (United States Department of Agriculture)
These are aimed at homebuyers in rural or less densely populated areas. These mortgages offer 100% financing, meaning no down payment is required. USDA loans also have competitive interest rates and low mortgage insurance premiums. To be eligible, borrowers must meet specific income and property location criteria.

“We can plug in an address and determine if it qualifies,” UnitedOne Mortgage Specialist Linda Serrano said.

7. Construction Loans
A Constrution Loan is ideal for those looking to build their dream home or do a large remodel of their current house. Unlike traditional mortgages, these loans are short-term and designed to cover the cost of construction. Once construction is complete, it becomes a permanent mortgage.

“There is a one-time close that can save you thousands of dollars in costs,” UnitedOne Mortgage Specialist Linda Serrano said.

Selecting the right mortgage product depends on your financial situation, goals, and the property you wish to purchase. It’s crucial to assess your credit score, income, and the size of your down payment to determine which option is best for you.

Consulting with one of UnitedOne’s Local Home Loan Experts will provide you with further guidance and help you choose the perfect mortgage product that suits your needs and financial situation best.