Navigating Home Loan Options and Rates

With the Spring Home buying season around the corner, there may be some confusion over the different types of home loans available for those making the big purchase.

Financial One Credit Union is here to help – both with providing answers and with financing your new home.

Types of Home Loans: 

1. Adjustable Rate Mortgage

ARMs give you a fixed interest rate for a certain number of years (the “adjustment period”) at a very reasonable rate. Following that period, your mortgage then becomes what is called a variable rate mortgage, where the rate adjusts on an annual basis based on market conditions, usually +/-1%.

2. Fixed Rate Mortgage

With these loans, the interest rate is fixed for the term of the loan – usually for 15 or 30-year terms. Fixed rate mortgages are more stable over the long-term even though you may see a higher interest rate than you’d get at the beginning adjustment period of an ARM.

3. Home Equity Loans

These loans take advantage of the equity you have in your home and are available if you owe less on your home than it is worth. Home Equity loans give you large amounts of funds to use for a variety of reasons and are available through Financial One Credit Union as lump sum loans (up to 100% loan to value) or as a Home Equity Line of Credit (up to 80% loan to value variable rate).

Interest Rates

Interest rates fluctuate daily based on changes in financial markets. Your individual interest rate will be determined based on your credit score, your income vs. debt ratio, down payment amount, the amount being borrowed, and the term of the loan. If you have any questions about how interest rates are calculated or why they fluctuate, please don’t hesitate to contact us.

Rates at Credit Unions are Often Better than Banks

According to Investopedia, Credit Unions are able to turn income into savings for their members. “Since profits to stockholders aren't a part of the company vision, credit unions are free to pass surplus money on to members.” In addition, Credit Unions don’t need to answer to stockholders; we are member-owned and are concerned with benefiting members over anything else.

Apply now for a Home Mortgage Loan from Financial One Credit Union, or view our current rates here.

Update Your Home With a Financial One Home Improvement Loan

The springtime reinvigorates many homeowners to clean, improve, and even renovate their house. It is the time to freshen up your home and get that home improvement checklist done. Even if you don’t have a lot of cash to put towards improving your home, there might still be a simple option for you.

Financial One Federal Credit Union offers home equity loans to reinvest in your house, making the improvements you need and increase your home’s overall value. Some might call it a “home improvement loan” because our members take out a home equity line of credit to use it for home maintenance almost as often as it is used for debt consolidation. We gathered a list of home improvements you would be wise to make on your home that have a great return on investment and will put your home equity to good use.

1. A New Garage Door

Surprisingly, a new garage door is one home improvement project that has the highest return on investment. This is because it can drastically improve your home's curb appeal!

2. Insulation in the Attic

Besides keeping your attic free from pests and mold, insulation works to make your home's HVAC system run more efficiently. This update kills two home improvement birds with one stone!

3. Kitchen Upgrades

Have you been dreaming of granite counter tops or a farmhouse sink? If you spend your money wisely, kitchen upgrades can have a very high return on investment and are one of the first things people will notice in your home.

4. Adding a Patio or Porch

Adding a porch, patio, deck, or an outdoor living space to your home is a great way to increase the usable square footage of your property and make your home feel larger without the huge expense of an add-on. The outdoor project with the highest ROI is a well-designed fire pit area.

5. Replacing Old Appliances

If you live in an older home, there are likely numerous appliances that are running inefficiently in your home. Spending the money to install a new HVAC system or tankless water heater can really pay off in the long run.

These are just some of the many ways you can reinvest back into your home with a home improvement loan. At Financial One, we help our members transition their hard-earned home equity into budget-friendly financing options for all your home improvement needs. Stop in and ask about a home equity loan from Financial One today!

Financial Statistics That Will Shock You

Financial One is experienced with providing solutions for our members, especially those suffering from debt. Though our economy has shown some improvement over the last few years, many people still struggle financially. These statistics highlight the trends and troubles with the way people in our economy use their money. Some of these financial statistics should certainly shock you!

The student loan debt in the US increases at a rate of $2,853.88 per second

According to businessinsider.com, “The average student loan is $23,186. Americans collectively owe more than $875 billion on student loans – which is more than the nation’s credit card debt.” As our nation’s next group of leaders, this statistic is particularly troublesome.

Only 58% of Americans Have a Credit Score Over 700

The national average credit score is 692. This is a problem because your credit score needs to be good enough if you want to acquire a home loan, car loan, or new credit card. Having a score over 700 is the cut-off for many industries.

You can save $112,000 over a lifetime by bringing your lunch to work

And that amount could be substantially more if you saved that money in an investment vehicle, like the stock market. Those little purchases really add up! What would you do with an extra $100k?

61% of Americans live paycheck to paycheck

That is up from 49 percent last year, according to Money magazine's audience poll. But what is most alarming: more than one in five of those living paycheck to paycheck earn a salary of $100K or more.

43% of those who lent money to family or friends were not paid back in full

Ownthedollar.com provides us with this statistic, explaining that a whopping 27% hadn’t received a dime in repayment after loaning loved one’s cash.

Everyone has made poor money decisions at some point or another in their lives. Of course, moving towards a solution is what matters most. Financial One can help! Please stop in and see us today to get yourself back on a comfortable financial track.

Be a Part of the Solution at Financial One Credit Union

Financial One is your solutions credit union. We don't come forth with solutions just for our members, we want to be a part of the solution for everyone in our community. That is why we launched our 3 Essentials program earlier this year and continue to give back to those in need. The three essentials every person needs is food, shelter, and clothing. We have teamed up with some great organizations in our local community to make donations towards providing these three things. Here's how you can help:

Your Auto Loan Equates to 100 lbs of Food

For every new auto loan Financial One lends to a member, we donate 100 lbs of food to those in need. This is in an effort to “drive away hunger” in our local community. We donate to the organization SACA Food Shelf & Thrift Store and NACE – North Anoka County Emergency Food Shelf. Our goal is to donate more than a million lbs of food over the next five years. You can help by choosing Financial One for your next auto loan and join us in driving away hunger!

Your Home Loan Equates to 1 Night of Shelter

It is so exciting to purchase a new home, it can be easy to forget your community members who are not quite as fortunate. You can feel good about borrowing from Financial One when your mortgage pays it forward. For each home loan we give, Financial One will donate 1 night of housing to someone who is homeless. We work with Stepping Stone Emergency Housing and Hope for Youth to give back. So far, 157 nights of shelter have been provided.

Your Checking Account Equates to 1 Coat for a Veteran

Sadly, a lot of our community members in need are veterans suffering from the aftereffects of serving their country. When you choose Financial One for your checking line of credit, we donate 1 coat or article of clothing to a veteran in need. So far we have donated more than 150 items of clothing! Our goal is to donate 2,000 items of clothing over the next five years.

Trust Financial One Credit Union with your next auto loan, home loan, or checking line of credit and know you are making a difference. Your choice can improve the lives of others through our 3 Essentials program. Join us in being a part of the solution at Financial One!

What You Need To Know About Closing Costs

Closing costs are something that every home buyer has to face, but many don’t completely understand what they are when they first start shopping for a home. They can be quite expensive, and in past years, have increased on average. Here’s what you need to know about closing costs:

What are closing costs?

Closing costs are fees associated with the closing of a real estate transaction. Closing costs can be incurred by either the buyer or seller, and occurs when the title of the property is transferred from the seller to the buyer.

What charges are included in your closing costs?

Depending on where you live and what kind of property you own, your closing costs can include a variety of factors. These factors can include an appraisal fee, a fee for running your credit report, inspection fees, insurance fees, loan fees, deposit fees, and more.

How much are closing costs?

Home buyers can expect to pay between 2 to 5 percent of the purchase price of their home in closing fees with prices varying due to taxes and location. Lenders are legally required to provide a loan estimate which will help you determine a starting point for your closing cost. Often times, closing costs can include unnecessary fees, such as mailing and administrative costs. If you encounter a large number of unnecessary charges, you can walk away from the loan and search for other lenders who can offer lower closing costs.  

Can you avoid closing costs?

You can’t fully avoid closing costs, but it could be possible to transfer them. You could ask the seller to pay some of the closing costs if you are short on money. The worst response you could hear is, “no.” You could potentially ask the lender to pay the closing costs as well. The caveat with this is that while lenders may agree to pay part or all of the closing costs or roll it into your mortgage amount, you can typically expect to see a higher interest rate on the loan.

How can you get the most accurate closing cost estimate?

Your final closing costs shouldn’t be a surprise. Within three days of receiving your application, your lender must provide a good faith estimate—a ballpark figure—that lists your estimated costs and any anticipated factors. Prior to closing, you’ll get an HUD-1 settlement statement that itemizes an updated and final closing cost. If the final statement is nowhere near the original good faith estimate, question your lender about it.

To learn more about closing costs and how our professional lenders can help you close on the home of your dreams, visit Financial One Credit Union for more information.

There’s No Place for Stress During the Holidays

The holiday season is here, and there’s a good chance your wallet has already taken a couple of blows. With all of the enticing deals, gifts to buy, and social gatherings during this time of the year, it becomes rather easy to overspend and run short on money. This may be especially true if you found yourself tempted into buying something you didn’t need on Black Friday or Cyber Monday. Regardless of how it happened, running low on money can be a very stressful situation, especially during the holidays.

Have no fear - Financial One is here to help! Whether you’re running low on money for gifts, or looking to afford a holiday trip, we have your solution. We are offering a special holiday solution loan, which can be applied for now. The rates on this loan are fantastic (we recommend checking them out), and it might just be your ticket to a stress-free holiday season.

A Holiday Solution Loan is not the only option - we also offer budget-friendly financing on personal loans and lines of credit, which come without annual or prepayment fees. You will receive helpful, member-first service throughout the entire process, and we will tailor your financing to fit your unique situation. After all, not everyone’s financial situation is the same. Not to mention, we handle the process in-house, which helps ensure that we get you money as soon as possible.

Regardless of your plans this holiday season, there’s no need to stress. Whatever you want to do, Financial One is here to get you there! Stop by one of our branches or give us a call at (763) 404-7600 if you have any questions regarding our holiday solution loan, personal loans, or lines of credit. We’d love nothing more than to help you make this holiday season one to remember.

Achieving Your Summer Bucket List

The summer bucket list: for some, it includes making your own ice cream and swimming in the dark. As we grow older, our summer goals tend to become more narrowly focused and, unfortunately, more expensive. We want to help you complete your summer bucket list, no matter how big your dreams may be! Just to help you get the ball rolling, here are a few ideas:

Vacations

Summer is a popular time to take the family on a vacation. Minnesota is the perfect state to invest in a vacation property, given our wide range of opportunity for lakefront housing. Many choose to leave the state (or even the country) each summer for a relaxing getaway. Take your loved ones on a road trip around the country or destination of your choice. If you’re more of a homebody, there are still plenty of great Minnesota-based vacation options.

Boating

The land of 10,000 lakes means 10,000 reasons to invest in a watercraft vehicle. Even if you are just using it on the lake over the weekend, investing in a boat will give you many more opportunities for summer adventures. Already have a boat? Make this summer the year to upgrade to something a little more powerful or something with a bit more space, then you can stop staring enviously at your neighbor with the new 30-foot pontoon. Add some high-quality tubing accessories onto your bucket list, and invite a few friends for a day of summer fun that will be the envy of everyone else on the lake.

Summer Home Improvements

Every homeowner has plans to build a gazebo, make landscaping changes, or make energy efficient changes to the house. The list of ideas goes on and on! Somehow, thoughts of these plans almost always end with one word: someday. Summer is the perfect time to make these changes in your home. You can also make a few necessary investments during the summer that can save you money in the winter. Need to fill up your LP tank this winter? Many times, you can get reduced prices in the summertime. Thinking of switching your heating to a wood-burning stove? Make plans now- why wait until the cold hits?

Put in a Pool!

Clark Griswold wanted to use his christmas bonus to build his family a pool, and we all know how well that turned out for him. Pools (especially in-ground) can be an extravagant expense to some, but the equity it adds to your home can end up paying for a big chunk. Let’s be honest, you’re lucky if those inflatable options you purchase at big box stores last longer than one summer. Give yourself a summertime treat that will not only improve your kids’ opinion of you, but also the value of your home!

Whatever may be on your summer bucket list, Financial One Credit Union can help. With low rates and easy payment options, completing your summer bucket list is easier than you may think. Check out our flexible loan options to see for yourself!

The Best Home Loans for Your Financial Planning

Finding the perfect home in the perfect neighborhood in the perfect town for your family is a big enough feat as it is. Why spend more time stressing out about how to finance your home? Luckily, Financial One Credit Union offers a variety of options for home financing.

Financial One offers competitively low rate solutions for whether you are buying, building, or refinancing your home. Better yet, our home loans are available for primary residences, second homes, vacation homes, mobile homes, and investment properties- meaning you can take care of both your house and your lake cabin with us.

Partnerships with Cambria Mortgages and local neighborhood consultants are available to help keep you informed so you can make the best decision. They offer members personal guidance as well as mortgage loan calculators to help you research home mortgage loans and sift through the best deals for you in terms of competitive rates and repayment plans.

Better still, Financial One offers home equity loans for your home improvement renovations whether large or small. Your could finance up to $15,000 with rates as low as 3.99% and payments as low as $50 per week. Financial One makes this loan process easy and convenient. You can apply online at any time, then once approved, you can sign electronically at home and receive funding in as little as 24 hours. This means you can start your dream home renovation project this weekend!

At Financial One Credit Union, we take care of our members and what matters most to them. Financing your home should not be a chore. Start with a visit to our website and then follow up by meeting with our home loan consultants to take advantage of what we have to offer with our home loans and payment protection plans that will protect your dream home and family today.

Student Loans: What not to Do

As a freshman, it’s important to read and understand the promissory note before signing on the dotted line. As many previous graduates have learned, sometimes paying off your student loans is harder than what you bargained for. Here is what NOT to do when it comes to your student loans.

Taking Out Loans When You Do Not Need Them

About 60% of students currently take out student loans. The other 40% get around loans by choosing a cheaper school and paying in cash, finding scholarships that can pay for some of the tuition, or putting off school and working to save up some money. Do not sign accepting the loans if you do not need them.

Taking Every Dollar Offered

Unless you have chosen a very expensive school, you more than likely don’t need to take the maximum amount of money offered by the government. You should evaluate what you truly need and only take out that amount. If you are worried about books and other expenses consider working a part-time job.

Not Keeping Track of Your Paperwork

Whether you are organized or not, throwing away your debt information can hurt you in the long run. Where are you going to send payments if you don’t have your information? If you do lose your paperwork, the National Student Loan Data System is the place to go to try to recover some of your lost information.

Not Making Interest Payments While Still in School

Try setting aside a few dollars a month and putting it towards your student loan interest. While this may be tough to accomplish on a small budget, it can help you out in the long run if you get rid of some of the debt right away. Don’t let the interest capitalize and be added to your overall balance.

Using Your Loans Towards Non - School Related Activities

Using your loans towards non-school related activities. If you are taking extra money out on loans, don’t use it to buy another case of instant noodles. The best thing you can do is to take that check and immediately pay down your student loans. Spending borrowed money on vacations and off-campus housing isn’t necessary. Just because you have a check doesn’t mean you need to spend it.

FAQs on Student Loans

Student loans are known as a hassle. With all the regulations and rules, loans can be a frustrating topic for most students. However, student loans are a great tool that enable students to obtain their education at a university that they normally cannot afford. We took some of the most frequently asked questions and addressed them in this month’s blog.

What are my student loan options?

The most popular loan is the Federal Stafford Loan. This loan is available for most students but is capped well below the cost of most colleges. Another loan is the Federal PLUS Loan. This loan is for creditworthy parents of students. This loan can more than likely cover the full cost of education for any student. The third most popular loan is the Federal Perkins Loan. This loan is made directly by a school to the student. Some schools do not offer this loan, but those that do can decide who to give the loan to based on who needs it the most.

Am I Eligible for a Federal Student Loan?

If you are enrolled in a certified program at an eligible school, you are more than likely eligible for a federal loan. You must be a U.S. citizen or an eligible non-citizen. In addition have your high school diploma or GED equivalent. If you have been convicted under any federal or state laws you may not be eligible for aid in certain cases.

What’s the Difference between Federal and Private Loans?

Federal loans are highly regulated by the federal government and include many benefits like fixed interest rates and repayment plans whereas private loans are subsidized and usually more expensive. Most people maximize their federal loans before thinking about taking out a private loan.

How long is my Grace Period?

A grace period is a specific amount of time during which you do not have to make payments towards your student loans. Knowing how long your grace period lasts is crucial so you don’t miss payments. In the terms and conditions section of your promissory note, you will find details about your grace period. If you no longer have the note your school's financial aid office and your lender are excellent resources to assist you with finding out the correct information about the grace period.

Can I Cancel my Student Loans?

Federal student loans can be cancelled but there are very specific conditions you must meet to get your loans cancelled. A successful cancellation means the government must give back any payments you have made and help you try to turn your credit score around. An application form is available, but there may be tax consequences if you decide to go through with the cancellation.