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INSIDE THIS ISSUE
• The Perfect Fit – Finding the home
loan that fits you, your family, and
your situation
• SMARTMOVE Home-Buying Service
• Qualifying for Your Mortgage –
What Does It Take?
• Home Equity Loans, LOCs,
and more
• Closing Costs – What They Are,
And What To Compare
• Become Part of the JHFCU
Advisory Council
• Switch to a JHFCU Visa and Save!
• Traveling Abroad?
• Holiday Closings
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Pe Fit
There are signs that home buying and
refinancing are beginning to pick up, but
consumers still need to find a mortgage that
fits their budget and provides good value.
One of the many benefits of a JHFCU
mortgage or home loan is dealing with a
trusted local lender. JHFCU services every
loan here at the credit union.* Plus, we offer
an extensive variety of mortgage options.
Conventional Fixed Mortgage
The traditional fixed-rate, fixed-term mortgage works
for most borrowers. Choose from 10-, 15-, 20- and 30year fixed-rate mortgage loans at competitive rates with
no points. We also offer jumbo mortgages and point
options with lower rates. Financing is available for
purchases and refinancing of primary and secondary
residences too.
30-year Adjustable-Rate-Mortgages (A.R.M.s).
A.R.M.s start off with a fixed rate for a specified time,
and then the rate adjusts once a year. JHFCU also has a
unique option called the “Golden A.R.M,” based on the
Prime rate, which could be a very attractive option as
rates rise.
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The
10-1 A.R.M.
For the borrower who thinks they might move within
10 years, or who just wants a loan rate locked in for
10 years, the 10-1 ARM is an excellent option. JHFCU’s
10-1 ARM is priced at the lower rate of our 15-year
mortgage, but with a 30-year term to keep your
payments affordable. The rate is locked in for 10 years,
with a possible rate adjustment annually, up to 2%.
Benefits of this unique product include:
• You get a lower rate—equal to the one offered on
our 15-Year Fixed Rate Mortgage.
• You get a lower payment with the 30-year-term as
the payments are amortized over the longer period
and thus affordable—providing you flexibility
within your budget.
• Your rate is locked in for 10 years, providing you
the security of a fixed payment for a longer time
than other ARMs.
• Annual adjustments after the initial 10 years are
capped at 2%.
• You can borrow as little as $50,000.
• You can borrow up to $417,000; higher amounts
available at a different rate. (Ask for details.)
For more information or rates, call our Loan Department
at 410-534-4500 Ext. 503, or email [email protected].
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330775 july 13 nl-jhfcu_newsletter 7/10/13 1:18 PM Page 4
FINDING THE HOME LOAN THAT FITS YOU,
YOUR FAMILY, AND YOUR SITUATION
NEW! JHFCU’s 80/10/10 Select Mortgage
HomeFree with No Closing Costs**
This is one of the newer options on the market,
letting you make a smaller down payment while
avoiding private mortgage insurance (PMI). 80/10/10
financing breaks up the loan: 80% of the loan is
financed as a first mortgage; 10% of the loan is financed
as a second mortgage (Home Equity); the final 10%
comes from a cash down payment, which is determined
by the purchase price of the home. This option can get
you into a home more quickly as you only have to save
10% of the purchase price for a down payment, unlike
the traditional 20%. Another big advantage is that you
can finance 90% of the home loan without having to
pay PMI. Many homebuyers prefer to avoid paying PMI
since it can be expensive and may not be tax deductible.
This option may also free up some of your savings to be
used for something other than a down payment - invest,
pay off other debt, or even buy needed furniture for your
new home. The 80/10/10 loan gives you more flexibility
and allows you to save PMI costs.
This loan is a very popular option for members who
have paid down a substantial portion of their mortgage
but still would like to take advantage of a lower rate.
Traditional refinancing can be cost prohibitive; the
HomeFree Home Loan allows you to get a low rate
without paying closing costs.** Other details include:
For more information, contact the Loan Department at
410-534-4500, x503 or [email protected].
*Occasionally, the Credit Union reaches a limit on the percentage of
mortgage loans allowed to be held in its portfolio or cannot sell the
loan and retain servicing. At that time, Financial Security
Consultants can still assist members’ mortgage needs and obtain
financing through an outside lender at the same rate offered by
JHFCU. JHFCU offers mortgages in Maryland and the surrounding
states (VA, PA, NJ, DE, DC, and WV).
• Rates as low as 3.375% APR*** for 6-year term.
• Terms up to 12 years available.
• Must have at least 25% equity in your home (loanto-value ratio of 75% or less).
• Minimum loan amount of $25,000.
• Maximum loan amount of $200,000.
• Used for primary residence only.
• Must maintain your own escrow for insurance and
taxes.
• For properties in Maryland and surrounding states.
• Loan must be used to pay off ALL other mortgage
loans on property.
For more information, contact the Loan Department at
410-534-4500, x503 or [email protected].
**Closing costs will be added back to loan balance if the loan is paid
off within three years.
***APR = Annual Percentage Rate. Rates are based on term of loan
and upon refinancing your non-JHFCU loan. With a $100,000 loan at
3.75% APR for 10 years, your payment will be $1,000.61 per month.
Rates are current as of 7/1/13 and are subject to change. Property and
flood insurance may be required. Other restrictions may apply. Other
rates available for various terms and/or refinances of JHFCU loans.
SMARTMOVE Home-Buying Service
A free benefit to all JHFCU members.
• Get a cash rebate when you buy and/or sell property through SMARTMOVE
• Access to professionals to answer your home selling/buying questions
• Pre-screened real estate agents to help you when you are ready to buy/sell property
Contact SMARTMOVE before signing with a realtor. For details call
800-645-6560 or 703-877-7821, Monday–Friday between 9AM and 5PM or
visit www.smartmove.com/jhfcu.
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Qualifying for Your Mortgage – What Does It Take?
The mortgage meltdown crisis several years ago
not only caused a recession, it also resulted in some
tougher mortgage underwriting rules. The good
news is that your Credit Union is here for you with
a common sense, not just “rules-based,” approach
to underwriting that considers your entire financial
picture, so you shouldn’t be too alarmed by the
tighter qualifying standards. However, checking
where you stand with each of the mortgage
underwriting criteria below can be helpful if you’re
considering buying or refinancing a home.
Your Credit History
The minimum credit score for a standard first
mortgage is now 620. Your credit should show no recent
bankruptcies, foreclosures or short sales. If you need help
bringing your credit score up to this standard, the Credit
Union offers a credit counseling service for our members
through Accel. Visit our website or call 1-877-33ACCEL.
Your Savings
If you’re purchasing a home, funds for your down
payment and closing costs can come from your own
savings, a gift from a relative, a loan against a retirement
plan or other financial asset, or a combination of the
above. You’ll need 3% of the purchase price in your
own money unless you can make a down payment of at
least 20% of the purchase price. If you can put more
than 20% down, all of the funds can come from a gift.
If you’re refinancing, you may not need to contribute
any money except for the cost of a credit report and
home appraisal.
For both purchases and refinances, the credit union
currently lends up to 90% of the purchase price or value
of the home. See the article on closing costs on page 6
for more information on what you can expect there.
Your Debts
Mortgage lenders look at your new mortgage payment,
including taxes, homeowners’ insurance and any
homeowners’ association fees, as well as the minimum
monthly payments on other loans and credit cards you
have, and compare the total to your monthly pre-tax
income. (Student loans in deferment are also included in
the monthly debt calculation even though payments may
not have begun yet.) The lower your percentage of debt
to income, the better qualified you are. If your own rough
calculation puts your debt to income percentage close to
4
or above 40%, we suggest you contact us for advice prior
to buying or refinancing. We’ll review your situation and
see if there are ways to reduce your monthly debt burden
so that you are better qualified for your mortgage. Keep
in mind that any effort you make to consolidate your
debt should make sense on its own – for example,
refinancing a car loan for a longer term with a higher
interest rate may not be the best move for you even if it
does lower your total monthly outlay. Talk to us first
before you restructure your debt to make sure it really
makes sense for you.
Your Employment History
Ideally, you should have at least a two-year history of
employment (not necessarily all with the same
employer) or attendance at an educational institution.
A shorter time period or a gap between jobs will need to
be explained. If you’re self-employed or need
commission income to qualify, that income will need to
be documented by the most recent two years’ tax returns
verifying receipt of the income.
Other Income
Other income, such as pensions, social security, rent,
dividends and interest, and other similar items can also
be used to qualify. Documentation requirements may
include retirement income award letters, 1099 tax
statements, or actual tax returns.
Your Next Step
If you’re considering purchasing or refinancing,
your next step should be to call our loan
department at 410-534-4500 Ext. 503, or email
[email protected]. We’ll be happy to help you explore
your first mortgage options.
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Home Equity Loans, LOCs, and more
Home Equity Lines of Credit—
Restructured to Offer a New Lower
Rate Coming Soon!
No closing costs* and rates lower than those of
other lenders make the JHFCU Home Equity line
of credit a great borrowing tool. Use the line for
home improvement, tuition, a vehicle, or to pay
off high-rate credit card bills, and enjoy the
possibility of a tax advantage!**
Choose from three Home Equity
lines of Credit:
• A standard line with a rate as low as
Prime+0%***
• A low-equity line that allows you to borrow
up to 90% of your home’s equity
• Jumbo Equity line that allows you to borrow
$150,000 and greater
Fixed-Rate Home Equity Loans
Benefit from the stability of a fixed interest rate
and no closing costs,* plus a potential tax
deduction** with the JHFCU 10-year or 15-year
fixed-rate 80% LTV, 90% LTV, 100% LTV or
Jumbo Home Equity loans.**** Receive the
proceeds of the loan at settlement and start using
it for purchases right away.
*The closing costs will be added back to the loan payoff
balance if the loan is paid off within the first 3 years and are
only paid by JHFCU one time per property. Access your home
equity line via Online Banking, Telebranch 24, special Home
Equity checks, or in person. Property and flood insurance may
be required. Rates are based on applicants credit and may vary.
Property and flood insurance may be required.
**Consult a tax advisor for specifics.
***Subject to a floor rate.
****LTV=Loan to Value. A $100,000 fixed-rate home equity
loan, at 5.875% APR for 15 years, would be $837.39 per
month for 180 months. A $100,000 fixed-rate home equity
loan, at 5.625% APR for 10 years, would be $1091.72 per
month for 120 months.
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51203_Newsletter_51203_Newsletter 7/9/13 6:09 PM Page 7
Closing Costs – What They
Are, And What To Compare
The second question most people
ask when they’re considering a
first mortgage is “What are the
closing costs?” (The first
question is always “What’s the
interest rate?”)
The closing cost question is not as easy to answer as it
sounds. While a good rule of thumb is that closing costs
on a purchase will be about 5% of the purchase price,
and closing costs on a refinance will be 2.5% - 3% of the
loan amount, closing costs will vary depending on the
type of mortgage transaction, the type of property, the
area you live in, and other factors. And not all lenders
will answer your question the same way. Some will only
tell you about lender fees. Some will tell you lender fees
and title company fees. Some will include property taxes
and insurance, and some will not. So it’s important to
know what to ask so that you can make a valid
comparison. (Once you actually apply for a mortgage,
you’ll get a Good Faith Estimate, which is a document
that formally lists your anticipated closing costs. Those
costs can vary only by certain limited percentages as
required by law when you reach the settlement table.)
First of all, you should know that your “closing costs”
are not the same as “the money you need to bring to
settlement.” If you’re refinancing and the value of your
home is high enough, you can choose to include all of
your closing costs in your new loan amount and bring no
money to settlement. If you’re purchasing, the cash you
need to bring to settlement will include not only closing
costs, but your required down payment. The good news
for purchasers is that often you can negotiate for sellers
to pay a portion of your closing costs to reduce the cash
you need to bring to the settlement table.
Secondly, you should understand that some of your
closing costs will vary depending on where you get your
mortgage and what title company conducts your
settlement, and other closing costs will be the same
wherever you go.
Closing costs that will remain the same regardless of
where you get your mortgage or conduct your settlement
are the fees that are paid to the state and county where
the property is located. These fees are called transfer
taxes, recordation taxes, and document stamps. They are
based on the purchase price of the property and the
amount of your mortgage. Calculating these can be
Become Part of the JHFCU Advisory Council
JHFCU has created a volunteer Advisory Council to help us spread the word about
JHFCU’s benefits and to provide insight to JHFCU. We know that word of mouth is often
the best way to communicate, and that our members have innovative ideas. We are
seeking interested members to expand the Council. Applicants should be engaged
members who utilize JHFCU’s services and who are genuinely interested in the Credit
Union, its members, and its success. Members of the Advisory Council must be willing to
advocate for JHFCU, including educating potential members on the benefits of Credit
Union membership and encouraging them to join, and enlightening current members about
services they might not know about. The Advisory Council representatives should be willing to serve as a
voice of other members, asking questions and providing feedback on JHFCU products and services, and
delivery of those services. Visit us at jhfcu.org for more details or to apply!
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51203_Newsletter_51203_Newsletter 7/9/13 6:09 PM Page 8
somewhat complex since the calculation changes if the
property is a principal residence as opposed to a second
home or rental property, if the property is a one-unit
home versus a multi-unit home, if an existing mortgage
is being paid off and closed, and if the purchaser is a
first-time home buyer, for example. You’ll want to find
out what these are for your own loan transaction, but
don’t waste time trying to compare these from one
lender to another.
Likewise, funds that must be brought to closing to pay
property taxes and insurance and to fund an escrow
account to provide for next year’s payment of these items
will not vary by lender – your property taxes are your
property taxes no matter where you get your financing! So
find out how much this will be, but don’t bother trying to
“shop” this category, referred to as “pre-paids and escrows.”
Lender points and fees are a closing cost category that
will change from lender to lender. Points, origination
fees, broker fees, tax service fees, underwriting fees,
documentation preparation fees, and similar items can
seem bewildering and hard to compare, particularly
since a loan with a low rate may have higher lender fees
than a loan with a higher rate, and it can be hard to tell
which is better for you. These lender fees must be
considered in the “Annual Percentage Rate” or “APR”
for the loan. The APR is a calculation that takes into
account not only the interest rate, but also certain fees
payable in connection with the loan. If you’re trying to
compare two loan offers with different interest rates and
lender fees, ask about the APR on each. The lower the
APR, the better the deal, as a general rule. Do keep in
mind that to calculate the APR, the lender will need to
ask you some questions specific to your transaction, so
expect to spend some time on the phone!
The last broad category of closing costs is title costs.
Again, these can vary depending on the title company or
attorney who closes your loan, so you may want to shop
around. Keep in mind, though, that you do get what you
pay for. If a title company’s fees are far below market, this
may indicate that they cut costs by not doing as thorough
a job, and this could mean problems for you later when
you try to sell or refinance and don’t have clear title
because work was not done properly the first time.
The bottom line? Closing costs are an important
consideration when you’re shopping for a mortgage, and
you should definitely consider the lender and title
company fee categories when you’re making your choice
– but don’t forget about interest rate, service reputation,
stability of the financial institution and ease of doing
business there. Make sure you choose your mortgage
lender for ALL of the right reasons!
If you’re considering purchasing or refinancing,
call our loan department at 410-534-4500 Ext. 503,
or email [email protected] for more information on
how your credit union can help.
Visa® Platinum
as low as
7.9%
APR*
Visa® Platinum Rewards
as low as
APR*
.4%
9
PLUS earn points for premium
merchandise, gift cards, and more!
*APR=Annual Percentage Rate. Rates are based on applicants’ credit and the type of credit card and may vary. Limits are based on applicant(s) credit and total unsecured loan balances.
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51203_Newsletter_51203_Newsletter 7/9/13 6:08 PM Page 1
Traveling Abroad?
MONEY MATTERS
Summer 2013
Georgean C. Smith
Chairman of the Board
Michael J. Mesta
President
Sharon A. Kemp
Vice Chairman
Lynn M. Gregory
Sr. Vice President—
Marketing &
Member Services
William Carruth
Treasurer
Rhonice Burnett
Secretary
Whether you’re going on a vacation
or on a business trip overseas, save
time and money by ordering your
foreign currency before you go. Arrive
prepared for taxi fares, tips and other immediate expenses and avoid overseas
credit card withdrawal fees and potential language barriers exchanging abroad.
With JHFCU, you have three convenient options:
1. JHFCU Branch – Delivered safe and secure, the next business day, to
the branch of your choice (East Baltimore, Homewood, or Bayview)1*
Holly K. Shek
Marketing & Outreach
Manager - Editor
2. Online for Home Delivery – Visit jhfcu.org and click on our Travel
tab to order 50+ major foreign currencies online 24/7, delivered to your
doorstep1**
Members: 38,568
Assets: $346,574,000
JHFCU MONEY M AT T E R S is published by the
Credit Union office staff and Board of Directors. The
views expressed do not necessarily reflect those of The
Johns Hopkins Hospital or University administration.
Address all correspondence to:
Editor, MONEY M AT T E R S
Johns Hopkins Federal Credit Union
2027 E. Monument Street
Baltimore, Maryland 21287
410-534-4500 • 1-800-JHFCU-70
jhfcu.org
Homewood Branch
Charles Commons
4 E. 33rd Street
Baltimore, MD 21218
M, T, F, 8:30 a.m. – 4:00 p.m.
W, 10:00 a.m. – 4:00 p.m.
Th, 8:30 a.m. – 5:00 p.m.
Bayview Branch
5201 Alpha Commons Dr.
Baltimore, MD 21224
M, T, F, 8:30 a.m. – 4:00 p.m.
W, 10:00 a.m. – 4:00 p.m.
Th, 8:30 a.m. – 5:00 p.m.
East Baltimore Branch
2027 E. Monument St.
Baltimore, MD 21287
Fax: 410-342-1160
M, T, F, 8:30 a.m. – 4:00 p.m.
W, 10:00 a.m. – 4:00 p.m.
Th, 8:30 a.m. – 5:00 p.m.
Eastern Branch
1101 E. 33rd St., Room 303A
Baltimore, MD 21218
Hours: Th, 8:30 a.m. – 4:00 p.m.
Phone Services Department
M, T, Th, F, 8:30 a.m. – 5:00 p.m.
W, 10:00 a.m. – 5:00 p.m.
Lost or Stolen ATM Card
410-534-4500, M–F 8:30 a.m. – 4:00 p.m.
Lost or Stolen Visa® Check Card
410-534-4500, M–F 8:30 a.m. – 4:00 p.m.;
after business hours call 1-888-241-2510
Lost or Stolen Visa® Credit Card
410-534-4500 or 1-800-543-2870
3. Coming Soon! Order a prepaid Foreign Currency Debit Card (Cash
passport) in 10 major foreign currencies.
Staying home but need to send funds abroad? Use JHFCU’s International
Wire Transfer Service. Convert or send a foreign currency wire to over 50+
countries.
Visit jhfcu.org/site/travel or call 410-534-4500
JHFCU does not have the ability to purchase back any unused foreign currency.
*Applicable charges apply. Exchange amount must be $20 to $5000 per transactions. Branch
deliveries occur only on business days.
**Applicable shipping charges apply. Exchange amount must be $250 to $3000 per
transactions. Delivery will be mailed to the registered address of your preferred payment
method and must be hand-delivered, including signature.
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Traveling Soon?
Ask About Our
Competitive-Rate
STUDENT
LOANS
Holiday Closings
• Thursday, July 4, Independence Day
• Monday, September 2, Labor Day
If you have travel plans,
please notify us by visiting
jhfcu.org and downloading the
“JHFCU Cardholder
Travel Notice Form” found
under Applications/Forms. This
form helps to prevent fraud
and issues with your Check
Card while traveling abroad,
since we are expecting your
foreign activity.
You can access your accounts via
the Internet Branch, TeleBranch 24,
our mobile apps, and ATMs.
FOLLOW US ON
Visit jhfcu.org for Current Rates
Federally
Insured
by NCUA
330775 7/13