FAQ

Mortgage

1. What is the difference between a Home Equity line of credit and a Home Equity Loan?

   One of the main differences between these two types of loans is the home equity loan has a fixed interest rate while a home equity line of credit has a variable rate. Also, on a home equity loan you receive all the funds for the loan at closing whereas the line of credit allows you to draw the funds out when you need it. One of our mortgage loan officers would be happy to review both types of loans and help you determine which one meets your needs.

2. What type of information do you need to get a pre-approval?

   Although we donâ€^™t offer an official pre-approval program, we can provide you with a prequalification letter to be able to provide when making an offer on a home. This can be provided once you have filled out an application with us. The prequalification approval letter is given with the stipulation that you have provided us with accurate information. If the information cannot be verified, then the prequalification would be void.

3. How long are pre-qualifications valid?

   Pre-qualifications are valid for 90 days. There is, of course, the option of extending the pre-approval by notifying your mortgage loan officer. Many members use the prequalification letter to be able to put in offers on property they would like to purchase. The prequalification letter will have the date the commitment expires so members can refer to that as well.

4. What is the maximum term for a mortgage?

   The longest term for a mortgage is 30 years.

5. Do you do construction loans and if so what is the timeframe that the loan is converted to a 30 year mortgage?

   The construction phase for this type of loan is 9 months. During this time, disbursements are made in installments. Once all funds are disbursed and either the home is complete or the 9 month construction period is up, the construction loan will then be converted to a 30 year mortgage.

6. What are the guidelines for a manufactured home?

   We offer manufactured home loans for homes that are 15 years old or newer. There are some requirements that have to be met for this type of loan in addition to the age to include it must be on itâ€^™s own foundation or slab. For other details on this type of loan, please contact one of our mortgage loan officers who will be happy to review all of the requirements with you.

7. How much do you need for a down payment to purchase a home?

   3% is the least amount you would need to put down on the purchase of a home loan.

8. Does HRCU offer a program to purchase land?

   Yes, we do offer land loans for an amount that is up to 70% of the appraised value or sales price, whichever is lower. The land must be a buildable lot and maximum term is 10 years.

9. Can we do loans in Maine & Massachusetts?

   Currently we are able to do loans in York County Maine and New Hampshire which are within our lending area. Massachusetts is not in within our lending area.

10. How do I get approved for a mortgage?

    There are 4 key factors that we look at to determine if we can approve a mortgage:

    • Credit history: Itâ€^™s important to pay your bills on time and when you do it gives the lender the impression that you will pay your mortgage on time as well.
    • Income: Steady and consistent income is important and helps us determine if you can afford the loan amount and help determine which mortgage product that would fit your needs the best.
    • Job history: We like to see 2 years history on your current position and no lengthy gaps in employment overall.
    • Current debts: We use your current debts and add the mortgage payment including taxes and insurance to determine the loan amount that is right for you and your situation.

    It's important to note also we do look at the whole picture when determining if someone will be approved for a loan. Everyoneâ€^™s situation is different and we do keep that in mind when reviewing a loan application. Please note also all mortgages are subject to an appraisal to determine sufficient title and must have clear title.

11. What are closing costs and how much can I expect to pay?

    Closing costs consist of a variety of fees which can include a home inspection of the home, appraisal to determine the value, title search to be sure there are no unknown lien or encumbrances on the property along with recording and origination fees. Here at HRCU we strive to keep your costs down as much as we can. Meeting with one of our mortgage loan officers would be the best way for you to get a more accurate picture of what those costs might be for you.

12. What type of mortgage should I choose?

    Purchasing a home is one of the biggest financial decisions of a lifetime for many members. What type of mortgage you choose should depend on what will work for your particular situation. Some members purchase a home and know they are planning to move or buy a bigger home as their family grows. In this case, an adjustable rate mortgage might make more sense as the rate is fixed for a time period and then can change depending on the program. On the other hand, if you feel more comfortable and want to know what your payment will be consistently and you plan on being in the home for a long time, a fixed rate loan may be best for you. Our mortgage loan officers can help you make that decision and can go over all your options with you when the time is right.

13. How far does the vacation home have to be from the primary residence to be able to do a vacation property mortgage?

    We do not have a distance requirement for this type of loan as many people may live on the surrounding Seacoast are and purchase a vacation home on a lake or in the mountains. If you have questions, our mortgage loans officers are always willing to assist you.

14. What types of mortgages do you offer?

    We offer a variety of mortgage programs designed to fit your needs. We offer fixed and adjustable rate conventional mortgage programs as well as Construction loans, land loans, and loans to purchase a manufactured or vacation home.