You’ll also need to demonstrate that you’ve been making prompt and regular payments on your current mortgage over the years. When you take out a home equity loan, you’re taking out a second mortgage on your home, so you’ll need to gather the necessary personal and financial paperwork, which means providing proof of income and employment with such items as tax returns, pay stubs and Form W-2s. Make sure to shop around and compare the rates and fees from other lenders to ensure you’re receiving the best offer possible. Although PFFCU doesn’t disclose its minimum credit score requirements, the higher your credit score, the more attractive a loan candidate you are, which should help you qualify for lower interest rates and more favorable terms.īanks and lenders also typically prefer to see a debt-to-income, or DTI, ratio below 36% but no higher than 43%. Your approval for a PFFCU home equity loan or HELOC will depend on a number of factors including your credit score, loan amount, loan term and loan-to-value, or LTV, ratio. However, a $150 fee is charged if you choose an appraisal upgrade. In addition to no application fees and no closing costs, the credit union also says there are no out-of-pocket costs. PFFCU offers home equity loans and HELOCs as well as mortgages and refinancing. Short draw period for HELOCs: Many lenders offer draw periods of as long as 20 years for a HELOC, which gives you the flexibility of lower interest-only monthly payments for two decades, compared with just five years of lower payments. Limited availability: Home loans from PFFCU are only available to police officers, fire fighters and their families, and people who work at certain employers or organizations. Low maximum loan amount: Some people may need more than $600,000 depending on what type of life expense they’re using the loan for.
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