Alask USA Credit Union Review and Rates

Alaska USA Credit UnionAlaska USA Federal Credit Union primarily serves Alaska, the Puget Sound area of Washington State, and California’s High Desert.

Currently Alaska USA is the largest provider of consumer financial services in Alaska. Member is groing in Washington and California. Alaska USA Credit Union provides business services, including checking, commercial loans, and insurance.

See a BankAims List of Credit Unions and Info about each.

Here are some facts about Alaska USA CU from their website.

  • Founded in 1948
  • Over 390,000 members in all 50 states and around the world
  • Over $4 billion in assets
  • 59 branches in Alaska, California, and Washington
  • Most branches open seven days a week
  • Financial Centers in Anchorage, Fairbanks, Kenai, Soldotna, and Wasilla
  • Offers consumer and commercial deposit and loan services, as well as mortgage and real estate loans, insurance, investments and investment management, and title and escrow closing services
  • Credit union accounts federally insured by the National Credit Union Share Insurance Fund (NCUSIF)

Alaska USA Federal Credit Union is one of the largest Credit Unions in the Nation.

Alaska USA CU Deposit Rates.

Rates and terms vary depending on minimum deposit amount.  With a $500 deposit rates are as follows. (Please note the date of this article for rate accuracy.)

Alaska USA CU Loan Rates

  • 30 year fix – 4.5% with a 4.631% APR
  • 15 year fix – 3.750% with a 3.975% APR

To see more information or get rate info see here.


No Credit Check Refinance – Is it possible?

When you apply for a mortgage one of the very first things you will need to do is give your social security number so your broker or bank can pull your credit.

What if your credit is terrible and you don’t want your credit to be pulled?

In all honesty it is very unlikely that you find a lender willing to fund a mortgage without your credit being check, although there are a few exceptions to this rule.  Your credit score is not the only, nor the most important factor in determining if you qualify.

Lenders and banks understand that some people with a stronger financial portfolio may have poor credit.  (stronger in the sense that you are able to comfortably afford your mortgage payment.)

It comes down to risk for lenders.  If you can show that even though your credit is poor you have the means to make your mortgage payment every month you may be able to qualify for a refinance.

If you have missed a mortgage payment in the previous year or two it is unlikely you will qualify because this dramatically weakens your position.  You want to show good payment history, strong monthly income and it is very important that you have money in reserves.  Which simply means money in savings, a liquid retirement account or something similar.

If you can show the lender you can comfortably make the payments and are a low risk borrower you may be able to refinance with less than stellar credit.

Here is a break down of the important factors when qualifying for a mortgage.

  • DTI (Debt to Income) – If your DTI remains under 30% it shows you earn enough money to comfortably make your mortgage payment.  The lower the better.
  • LTV (Loan to Value) – The lower the Loan to Value on your home the stronger it is.  If you only owe 70 or 75% of your houses value you become lower risk.
  • Income – Income is a main factor in determining your DTI.
  • Assets – If you can show 6 months of assets, this will really strengthen your file tremendously.  Assets, particularly liquid assets, help show that even if you lose your job or run into financial difficulties you can still make your mortgage payment for a number of months.
  • Payment History – A clean mortgage payment history (meaning you have no 30 day late payments) shows you are a trustworthy borrower.

In conclusion if you can show strength in the other areas of your mortgage than the credit score factor may be minimized or eliminated.

Some people never even build credit and literally have no credit, but can still purchase a house.  This is because these other factors are strong.  Plus in this case if we are looking to refinance the fact you already own the home helps tremendously.


What is DTI (Front and Back End Ratios for Mortgage)?

When you are in the middle of the mortgage application process you may hear the terms DTI or ‘front end ratio’ and ‘back end ratio’ being thrown around.

Your income plus monthly debt burden will help determine how much house you can afford.  The front end ratio and the back end ratio are the calculations that make this determination.

The Front End Ratio:

Front Ratio is determined by adding together your proposed principle and interest mortgage payment, taxes, insurance and any dues owed to a homeowners association or condominium complex.  This total is divided by your total gross income.

Example:

  • Principle and interest mortgage payment = $1,000
  • Taxes and insurance = $150
  • Homeowners Dues = $50
  • Total Payment = $1,200

With an income of $4,000 a month your front end ratio would be 30%.  Typically mortgage companies want to see a front ratio of under 28%.

[Related: What is YSP (Yield Spread Premium)?]

Back End Ratio:

This ratio is called your DTI (Debt to Income).

The back ratio is determined by adding together the total mortgage payment (including everything listed above) plus any other monthly financial obligation.  The monthly obligations can be credit card payments, auto loans, lines of credit, etc.  This total is then divided by your gross monthly income.  If you have no monthly payments besides your mortgage your front and back end ratios will be the same.

Example:

  • Total from above = $1,200
  • Car Payment = $200
  • Credit Card Payments = $80

Again with a $4,000 a month income your back end ratio would be 37%.  Mortgage companies want to see this below 36%.

Even though lenders like to see your DTI below 36% some lenders will give exceptions all the way up to 50% depending on the strength of your credit score and other factors in your loan.

Keeping a low Debt to Income ratio is important and can help you qualify for a mortgage with less hassle.

To keep your mortgage payments low, make sure your credit score is high. If your score is currently too low, speak with a specialist to get credit repair secrets to get your number back to respectable, and your mortgage payment will fall.

Check out todays mortgage rates.


Mortgage Rates Fall Again – November 11th

After a few weeks of fairly steady rates, mortgage rates have decided yet again they are not ready to stop setting record lows.

Over the past week the average national mortgage rates have decreased across the board.

According to Freddie Mac’s Primary Mortgage Market Survey, which takes the average rates offered by banks and lenders across the nation and averages them out, rates for this week look like this.

November 11, 2010 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM
Average Rates 4.17 % 3.57 % 3.25 % 3.26 %
Fees & Points 0.8 0.8 0.7 0.7

These are new lows compared to last weeks numbers:

November 4, 2010 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM
Average Rates 4.24 % 3.63 % 3.39 % 3.26 %
Fees & Points 0.8 0.7 0.6 0.7

It is obvious to see that rates are not ready to climb back up the ladder quite yet.

Not since October 14th when rates were 4.19% on the 30 year fixed, have rates been down this low.

Will this trend continue?

No one can forecast what rates will do with 100% certainty, but there doesn’t appear to be anything on the economic horizon that would suggest mortgage rates go any other direction but down.  Perhaps they steady out or even bump back up slightly, but it may be a while before we see a significant rise in mortgage rates.

Doing a mortgage yourself? Check out these mortgage help articles.  What is PMI? and How is APR Calculated?


What is Private Mortgage Insurance (PMI)?

A commonly misunderstood part of a mortgage is PMI or Private Mortgage Insurance.  In this article we will break down what PMI is, but first let me tell you what it is not.

What PMI is NOT.

Some people, often times first time home buyers, believe that Private Mortgage Insurance is a policy where if the borrower died the mortgage insurance would pay off the existing balance.  This is not true, and in fact completely opposite of what PMI really is.  PMI is built to protect the lender not you the borrower.

Others mistake PMI for Home Owners insurance, and believe it will protect them against damage or theft of their house.  This is not the case as Homeowners Insurance is completely separate requirement, can never be removed, and is in place for the benefit of you.

[Want more Mortgage Help?]

What PMI is.

Private Mortgage Insurance is a requirement for most, if not all, loans where the borrower has a mortgage more than 80% the value of the home.  If you are purchasing a home and put less than a 20% down payment PMI will be required.  Likewise if you are refinancing your home and the new loan amount exceeds 80% the appraised value PMI will be required.

PMI protects the lender on “risky” loans in case you as the borrower default.

So what is in it for me?

Good question.  The answer… not much other than the ability to borrow over 80% or have less than a 20% down payment.  Many people do not have enough money saved to put 20% down on a home; therefore PMI may be your only option.

How long will PMI last?

PMI is not good for the life of your loan.  Two factors that naturally occur help reduce the time you are required to pay mortgage insurance. These factors are making your monthly payments and appreciation of your home.  You can request your PMI be canceled when your mortgage equals 80% or less of the original purchase price or appraised value of your home at the time the loan was obtained, whichever value is less.

Good payment history for the previous 12 months is often required to drop PMI at 80% LTV (loan to value).  Once your LTV equals 78% your lender is required by law to automatically remove the PMI.  If you are delinquent during this time PMI will not be removed until your loan is current.

Finally, if neither option above is reached by the time the loan reaches the midpoint of its term PMI will be automatically canceled.  For example if you have a 30 year loan with 360 payments once the 180th payment is made PMI must be canceled, provided you are current on your payments.

Can I avoid PMI without a 20% down payment?

Some lenders offer 2nd mortgage plans to avoid PMI.  Commonly known as an 80-10-10 loan, in this scenario you borrow a first loan of 80% (no PMI because it is 80%), second loan of 10% and a 10% down payment.  Although you avoid private mortgage insurance you have the risk of a high interest rate 2nd mortgage.  2nd Mortgages are often times adjustable rate mortgages, or even have a balloon payment at some point in the loan.

In conclusion.

Ideally you would like to have 20% down payment so you can avoid PMI altogether.  If you do not have that large of a down payment you will be required to carry PMI for a portion of your loan.  Be sure to keep a close eye on the value of your home and the amount you have paid your mortgage down so you can cancel the mortgage insurance at any time.


What is APR and How is APR Calculated?

What is APR?When you hear mortgage ads, apply for a mortgage, see a mortgage rate advertised, you will always see the APR right next to the interest rate.  Why is that, and what is the APR?

APR stands for Annual Percentage Rate.  The APR is a calculation that determines what your interest rate would be if you removed the fees from your loan.  The higher the fees the further your APR will be away from your actual interest rate.  The lower the fees the closer your rate and APR will be.

The Annual Percentage Rate is more a measurement of Fees than it is rate.

TIL or the Truth in Lending Law requires that the APR must be displayed with any advertised rate. This is so companies cannot advertise extremely low rates and then tack on high amounts of fees you would then be required to pay to get that rate.

Go ahead and look.  You will never see an add or hear a radio commercial for a mortgage rate without also getting the APR.  Just like you will never see someone in a television commercial actually drinking beer (or any alcohol for that matter), they cannot show the consumption of alcohol.  I guess that is a different article for a different blog though.  Back to APR.

How is APR Calculated?

APR is calculated by first determining the payment of your loan then removing certain fees like points, application fee, closing cost, processing fee, title fee, etc, from the total loan amount and recalculating a new rate from the remaining balance and original payment.

Here is an example.

Let’s say your loan looks like this

  • $100,000 Loan Size
  • 4% Rate
  • 30 year term

In this scenario your mortgage payment would be $477.42.

The closing costs included in the $100,000 were $1,500.

APR would be determined by first removing the fees from the loan size.

  • 100,000 – 1,500 = $98,500

Now calculate a new rate (the APR) using

  • $98,500 Loan Size
  • $477.42 payment
  • 30 year term

The rate calculated here is 4.1257% which would be your APR.

So the whole scenario would be

  • Loan Size: $100,000
  • 30 Year Term
  • $477.42 payment
  • 4% rate with a 4.126% APR

This is how you can see the APR is more a measurement of fees than it is rate.

You can use this information to help determine what advertised loans are better than others.  If you see a 3.5% rate with a 4.5% APR compared to a 4% rate with a 4.2% apr you know which loan is going to be much cheaper and probably the better deal.  Even though option one may have had a lower rate.

Check out our other mortgage help information or mortgage news.


Fed’s Meeting Could Drop Interest Rates

The Fed meets this next week to decide how much they will buy of Treasury notes and other assets to help spur the US economy. The Fed is planning on taking action to help create momentum in the US economy and to promote growth. When people stop buying and selling and start saving, the economy slows and growth is minimal. Manufacturing slows when people stop buying products, which then causes people to become unemployed and the cycle of a recession continues. In a time period when home owners are losing their houses and jobs at record breaking numbers, its imperative for the Fed to act.

The goal: drive up the prices of long-term bonds, which pushes down yields. That, in turn, pulls down rates on mortgages and other loans, spurring consumers to buy homes and cars, and businesses to invest and hire workers as noted by Paul Davidson.

What does this have to do with interest rates? If the Fed buys up Bonds and other assets it will spur banks to start lending more of their cash. Both banks and corporations are sitting on loads of cash which can be used to lend to buyers and to create jobs. If banks are more willing to lend money, people will be able to buy houses, refinance their current one and buy other larger purchases such as car, all promoting growth. Interest rates will drop, mortgage rates will drop, making it easier for people to get into a house with a low payment. If people have more cash to spend, rather than save or put it into a house that’s about to go into foreclosure, then the buying of products and new merchandise can spur the economy into growth and lower unemployment.

It will take a few months to see how this decision will affect CD rates. If banks decide to lend out more money, the low interest they charge will keep CD rates low. A certificate of deposit is a loan to a bank which the bank then turns it around and lends it out to a customer with a small interest rate behind it. Whatever the bank earns, they turn that around and pay out a small portion to the lender. The reason why the Fed’s meeting November 3-4th is so important is because if they do end up buying billions of dollars worth of US Bonds, then the interest rates on everything will fall as well. Mortgage rates will decrease to further record lows, which is great for the borrower, but bad for the saver. Be sure to keep an eye on our CD rates board to see if rates begin to decrease or increase.


Mortgage Rates Up 2 Weeks in a Row – Oct 28

According to the Freddie Mac Primary Mortgage Market Survey mortgage rates are up for the 2nd week in a row.

October 28, 2010 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM
Average Rates 4.23 % 3.66 % 3.41 % 3.30 %
Fees & Points 0.8 0.7 0.6 0.7

Last week the 30 year rate was sitting at 4.21%. The 15 year was 3.64, and once again while the 30 and 15 year fixed raise the 5/1 AMR dipped once more from 3.45% last week to 3.41% this week.

Should you lock if you have the chance?

I was visiting an old loan officer friend of mine and I overheard him on the phone talking to a client.  He said to them, “I wouldn’t lock yet as rates are up and you may have the opportunity to lock at a lower rate.”

Should you follow this advice as well?  Absolutely NOT.

Your situation is going to be much different than others.  You need to be sure you have a professional loan officer whom you can count on to give you sound advice for your loan in particular.

Now with that said rates are extremely low right now and if you have the chance to lock in a new rate in the low 4 or high 3 percentage range I say look into it.

If you want to crunch some numbers for your new home loan try our home loan calculator.


TD Bank Mortgage Rates and MTG Process Reviewed

TD Bank services customers in states along the east coast.

TD Banks Slogan is “Americas Most Convenient Bank”.

We’ll review there mortgage rates and then review just how convenient they are able to make your banking experience.

Each of the loan scenarios will be based on an 80% loan to value and 1 point.

30 Year Fixed

  • Rate of 4.125%
  • APR of 4.263%

15 Year Fixed

  • Rate of 3.375%
  • APR of 3.615%
  • Note: The 15 year fix at 0 points is only 3.625% with an apr of 3.719%.
  • TD’s 15 year fixed product is one of the better we have seen.

Lets compare these rates to the nations average mortgage rates. (Based on Freddie Macs Primary Mortgage Market Survey).

  • Average 30 year with 0.8 points = 4.23%
  • TD Bank 30 year with 1 point = 4.125%
  • Average 15 year with 0.7 points = 3.66 %
  • TD Bank 15 year with 0 points = 3.625%

As you can see TD Bank is lower than the national average.  There 15 year fixed mortgage is excellent right now and worth taking a look into.

Is the loan process “convenient”?

As I browse through TD Banks website I notice it is easy to navigate and find my way around.

They have some pretty cool programs like the Mortgage Rate Security, If rates drop after you have made 12 timely payments, you may be able to lower your rate without refinancing.  Or the Hassle Free Mortgage Guarantee which is there pledge to you that your mortgage process will go smoothly.

They also have a rate watch feature that will notify you via email when rates hit your goal.

Use our Mortgage Calculator to figure out your payments.

Now obviously I haven’t gone through the mortgage process with them so I cannot speak to that, but according to MyBankTrackers bank review TD Bank has 2 out of 5 stars based on 155 user reviews.  This is not a good rating.  This rating is based on TD Bank as a whole, not just there mortgage department.

If you have had a good or bad experience with TD Bank please share in the comments below.

TD Bank serves Connecticut, Delaware, Washington DC, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Virginia.


What Does it Mean for Mortgage Rates when the Feds Cut the Prime Rate?

Every so often you will hear that the feds are cutting the prime interest rate.  When I was a loan officer I would get inundated with phone calls from clients after an announcement like this.  Over and over I would have to explain to them how the feds interest rate cut does not directly affect mortgage rates.

Here is why.

When the Federal Reserve (the Feds) raise or cut interest rates they are changing the prime rate of short term loans.  Short term is the key here.  Short term loans are loans such as auto loans or lines of credit.  The most simplistic way to describe it is that banks and lenders use the prime rate as there base and any additions to the rates they offer on short term loans get added onto the prime rate.

If you have an adjustable rate line of credit and the Feds cut the prime rate by .25%, the rate on your adjustable line of credit will decrease.

Now long term loans such as mortgages are based on an entirely different system for determining what the rates will be.  Explaining this system is another article entirely, but has much more to do with the bond markets and mortgage backed securities.

The rate cuts or rate hikes from the feds has absolutely no direct affect on long term loan rates.  Now it can have an indirect affect on them just not directly.  Sometimes long term rates do not do anything when the Feds meet.  Historically long terms rates are just about split when it comes to going up or down after the prime rate has been cut.

Check out Average Closing Costs for a Home Mortgage.

Short term loans and long term loans have two completely different methods for determining interest rates.  Using one to help gauge the other means you will be misinformed.

If you are in the market for a mortgage be sure your loan officer has a good pulse on what is happening with long term rates.  Right now it is pretty easy; they are low, really low.  But when the economy starts making headway it is going to be a different game.  Educate yourself and surround yourself with professionals who can help you make the right choices.

For more tips visit mortgage loan help.

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