Greater Central Texas Federal Credit Union,
3305 E Elms Road
Killeen, TX 76542
Telephone: 254-690-2274
www.gctfcu.net

Home Loans: Jargons and Terminology

13. January 2015 Administrator Home Loans (0)
People who have ever applied for a home loan in Killeen, TX know how puzzling and nerve-wracking the process can be. The jargons and terminologies used by the financiers are so complicated that most of the customers fail to understand the basics of their home loan. Due to this, they end up striking deals without knowing about out their consequences. Thus, anyone intending to get a home loan must be aware of the meaning of the commonly used jargons.

Given below is a complete explanation of the common terminologies used in home loans:

  • Annual Percentage Rate (APR): It refers to the variable or fixed interest rate at which the financier is ready to lend the loan for a certain period of time. Borrowing a loan at a low APR does not always mean a cheap loan, particularly if it is a long term loan. Paying higher number of installments at a low APR ultimately leads to reimbursing more interest.
  • Comparison Rate: This includes the upfront loan fees as well as the proposed interest rate. Comparison rate will help you in assessing the true cost of the home loan.
  • Fixed Rate: This allows you to borrow the loan at a definite rate of interest with fixed monthly payments for a specified period of time.
  • Loan To Value Ratio (LVR): It refers to the size of your home loan in proportion to the actual value of the property to be purchased. For instance, if you borrow $200,000 to finance a home worth $400,000, the loan will have an LVR of 50% ($200,000 is 80% of $400,000).
  • Variable Rate: It keeps on varying according to the changes in official rates of interest.
  • Down Payment: When you borrow a home loan, the lender will require you to contribute certain percentage of your own money to buy the house. This initial amount is known as down payment. 
  • Refinance: This refers to procuring a new mortgage loan on an already owned home. This is usually done to switch current loans on the property. 
  • Loan Term: It is the time period before the maturity of your home loan and is usually indicated in months, usually 24 to 84 months. It helps the borrower have an idea about when he is expected to pay off the loan.
For more information about home loans in Killeen, TX, contact Greater Central Texas Federal Credit Union. You can call us at (254) 690 – 2274 or visit our office at 3305 E Elms Road, Killeen, TX 76542.

Comments are closed
GCTFCU Blog | Eligibility For Home Loan In Killeen, TX
Greater Central Texas Federal Credit Union,
3305 E Elms Road
Killeen, TX 76542
Telephone: 254-690-2274
www.gctfcu.net

Eligibility For Home Loan In Killeen, TX

21. December 2015 Administrator Home Loans (0)
A home loan is a perfect way to purchase your dream house in Killeen, TX. However, before applying for a loan from a credit union or any other financial institution, it is important to know whether you are eligible for the same or not. It will help you save time and simplify the home loan process.

Listed below are some eligibility criterion set by most financial institutions in order to apply for a home loan in Killeen:

  • Age:  Age is an important consideration for home loan approval. Younger people are more likely to get a loan as compared to those who are nearing retirement.
  • Source of income: Your source of income along with its stability is an important factor taken into account by a credit union. For instance, having a salaried job can fetch you a higher loan amount because of your job stability.
  • Additional debts: If you have an existing loan repayment, it can affect your chances of getting a home loan from credit union. It is better to pay off all your smaller loans (if any) before applying for a home loan. Additionally, having a good repayment history may also increase your chances of getting a home loan.
  • Proof of income: You will be required to show at least three of your recent pay slips to your lender. If not, you may be asked to submit a letter from your employer which states your annual salary. In case you are self-employed, you may be asked to provide the financial accounts for the past two years.
  • Debt to income ratio (DTI): Your debt to income ratio is another factor considered by a credit union before approving a home loan. It is basically a measure of your ability to manage monthly payments and repay debts as well. DTI is calculated by dividing total recurring monthly debt by gross monthly income. You should calculate it prior to deciding how much loan you want.
  • Credit score: Having a good credit score increases your chances of getting a home loan approved easily. Therefore, it will be beneficial if you maintain a decent credit score by paying all your installments and loans on time.
We, at Greater Central Texas Federal Credit Union, offer affordable and convenient home loans to our members in Killeen, TX. To know more about our services, feel free to call us at (254) 690 – 2274 or visit 3305 E. Elms Rd., Killeen, TX  76542.
Comments are closed