Loans, Rates & Fees
When it comes to home financing, there are many different options to choose from. How do you find the loan that's best for you? Here is some information to help you.-
Are there any prepayment penalties for your loan programs?
None of the loan programs Third Federal offers have penalties for prepayment. You can pay off your mortgage any time with no additional charges.
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What is the maximum percentage of my home's value that I can borrow for a home equity loan?
Currently, all customers can have a Loan to Value ratio as high as 80%. That means you can get a home equity loan up to 80% of your home's value minus any balance you have on your first mortgage.
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Is there a rate lock policy for your home equity line of credit?
If you are applying for a home equity line of credit, your rate varies with the Prime Rate, so your rate is never locked.
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Is there a minimum draw requirement on home equity lines of credit?
No. You may withdraw whatever amount meets your needs, up to the amount of the account's available credit limit.
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Can I make my monthly payments with an automated debit from my checking account?
Automated monthly payments are available. At the loan closing an automated payment application will be provided. Simply return it at your earliest convenience to enroll in the automated payment program.
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How will a past bankruptcy or foreclosure affect my ability to obtain a new mortgage?
If you've had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage or equity loan. Unless the bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that four to seven years have passed since the bankruptcy or foreclosure. It is also important that you've re-established an acceptable credit history with new loans or credit cards.
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What is your rate lock policy for home equity loans?
If you are applying for a fixed home equity loan (HELOAN), your rate will be locked for five or ten years (five years for 5-year fixed, ten years for 10-year fixed HELOAN) at the time of application.
If you are applying for the 5/1 Adjustable HELOAN, your initial rate will be locked at the time of application for the first five years. After that, the interest rate adjusts to Prime Rate once per year.
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What is a Home Equity Line of Credit?
A home equity line is a form of revolving credit in which your home serves as collateral. Because your home is likely to be your largest asset, you should consider a home equity line of credit for the purchase of major items such as education, home improvements, or medical bills and not for day-to-day expenses.
With a home equity line, you will be approved for a specific amount of credit—your credit limit—meaning the maximum amount you can borrow at any one time while you have the plan. Since you can get approved for an amount of credit now and not access the funds until you need them, a home equity line of credit is a good choice if you simply want the ability to access cash as you need it.
With our home equity line, you'll have the ability to access funds, up to the amount of your credit limit, by simply writing a check or using a debit card attached to your line.
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What is a Home Equity Loan?
A home equity loan (HELOAN) is a type of loan in which the borrower uses the equity of his or her home as collateral. Home equity loans are often used to finance major expenses such as home repairs, medical bills or college education.
With a home equity loan, funds are disbursed in one lump sum and your monthly payment doesn't change during your term for a fixed rate HELOAN (with an adjustable home equity loan, your rate is fixed for a certain time period (i.e. five years for 5/1), then adjusts to Prime Rate once per year).
Your Application
Applying for a mortgage can be very intimidating. You're asked specific details about your income, assets, and debts. Here we will give you information that will let you know how that information is used when applying for a mortgage.-
Can I make my monthly payments with an automated debit from my checking account?
Automated monthly payments are available. At the loan closing an automated payment application will be provided. Simply return it at your earliest convenience to enroll in the automated payment program.
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Are there any prepayment penalties for your loan programs?
None of the loan programs Third Federal offers have penalties for prepayment. You can pay off your mortgage any time with no additional charges.
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Where will my closing take place?
If the property securing the loan is close to one of our branches, you will close at a Third Federal branch.
If the property is not close to one of our branches, we will arrange for a title company representative to conduct the closing at the property securing the loan.
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What is a credit score and how will my credit score affect my application?
A credit score is one of the pieces of information that we'll use to evaluate your application. Financial institutions have been using credit scores to evaluate mortgage, credit card and auto applications for many years. There are three main companies who issue credit scores.
Credit scores are determined on information collected by credit bureaus and information reported each month by your creditors about the balances you owe and the timing of your payments. A credit score is a compilation of all this information converted into a number that helps a lender to determine the likelihood that you will repay the loan on schedule. The credit score is calculated by the credit bureau, not by the lender. Credit scores are calculated by comparing your credit history with millions of other consumers. They have proven to be a very effective way of determining credit worthiness.
Some of the things that affect your credit score include your payment history, your outstanding obligations, the length of time you have had outstanding credit, the types of credit you use, and the number of inquiries that have been made about your credit history in the recent past.
Credit scores used for mortgage loan decisions range from approximately 300 to 900. Generally, the higher your credit score, the lower the risk that your payments won't be paid as agreed.
Using credit scores to evaluate your credit history allows us to quickly and objectively evaluate your credit history when reviewing your loan application. A credit score is one of the factors we use to evaluate the total financial picture of a customer. -
Will the inquiry about my credit affect my credit score?
An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing.
But don't overreact! The data used to calculate your credit score doesn't include any mortgage or auto loan credit inquiries that are made within the 30 days prior to the score being calculated. In addition, all mortgage inquiries made in any 14-day period are always considered one inquiry. Don't limit your mortgage shopping for fear of the effect on your credit score. -
Will I be charged any fees if I authorize my credit information to be accessed?
You will not be charged for a credit report.
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I'm self-employed. How will you verify my income?
Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period.
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How will rental income be verified?
If you own rental properties, we'll generally ask for the most recent year's federal tax return to verify your rental income. We'll review the Schedule E of the tax return to verify your rental income, after all expenses except depreciation. Since depreciation is only a paper loss, it won't be counted against your rental income.
If you haven't owned the rental property for a complete tax year, we'll ask for a copy of any leases you've executed and we'll estimate the expenses of ownership. -
Will my overtime, commission, or bonus income be considered when evaluating my application?
In order for bonus, overtime, or commission income to be considered, you must have a history of receiving it and it must be likely to continue. We'll usually need to obtain copies of W-2 statements for the previous two years and a recent pay stub to verify this type of income. If a major part of your income is commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-related expenses, if any. We'll average the amounts you have received over the past two years to calculate the amount that can be considered as a regular part of your income.
If you haven't been receiving bonus, overtime, or commission income for at least one year, it probably can't be given full value when your loan is reviewed for approval. -
Will my second job income be considered?
Typically, income from a second job will be considered if a one-year history of secondary employment can be verified.
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I am retired and my income is from pension or social security. What will I need to provide?
We will ask for coppies of your two most recent bank statements showing your direct deposit. We can also verify your income with a copy of your most recent award letter or 1099. Sometimes it will also be necessary to verify that this income will continue for at least three years. This can be verified with a copy of your award letter.
If you're receiving tax-free income, such as social security earnings in some cases, we'll consider the fact that taxes will not be deducted from this income when reviewing your request. -
I have income from dividends and/or interest. What documents will I need to provide?
Generally, two years personal tax returns are required to verify the amount of your dividend and/or interest income so that an average of the amounts you receive can be calculated. In addition, we will need to verify your ownership of the assets that generate the income using copies of statements from your financial institution, brokerage statements, stock certificates or Promissory Notes.
Typically, income from dividends and/or interest must be expected to continue for at least three years to be considered for repayment.
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If I have income that's not reported on my tax return, can it be considered?
Only income reported on your tax return can be considered when applying for a mortgage, unless, of course, the income is legally tax-free and isn't required to be reported.
Some lenders may offer a stated income program, which means that you can be qualified for a loan based on the income you state rather than that which can be verified. We do not offer stated income programs at this time.
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Do I have to provide information about my child support, alimony or separate maintenance income?
Information about child support, alimony, or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan.
However, if you are obligated to pay alimony or child support you must disclose the amount of the monthly payment.
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I've had a few employers in the last few years. Will that affect my ability to get a new mortgage?
Having changed employers frequently is typically not a hindrance to obtaining a new mortgage loan. This is particularly true if you made employment changes without having periods of time in between without employment. We'll also look at your income advancements as you have changed employment.
If you're paid on a commission basis, a recent job change may be an issue since we'll have a difficult time of predicting your earnings without a history with your new employer. -
I was in school before obtaining my current job. How do I complete the application?
If you've been with your current employer less than two years, list the school that you attended as the prior employer and the length of time you were in school in the "length of employment" fields. You can enter a position of "student" and income of "0."
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I have student loans that aren't in repayment yet. Should I show them as installment debts?
Any student loan that will go into repayment within the next six months should be included in the application. If you are not sure exactly what the monthly payment will be at this time, enter an estimated amount.
If other student loans are reflected on your final credit report, which will not go into repayment in the next six months, we may need to ask you for verification that repayment will not be required during this time period. -
How will a past bankruptcy or foreclosure affect my ability to obtain a new mortgage?
If you've had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage or equity loan. Unless the bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that four to seven years have passed since the bankruptcy or foreclosure. It is also important that you've re-established an acceptable credit history with new loans or credit cards.
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Is the Third Federal home equity application a secure site?
Yes, all of www.thirdfederal.com is secure. We use secure "https" where customer information is encrypted using Transport Layer Security (TLS) or, formerly, Secure Sockets Layer (SSL) technology, supported with digital certificates. This means that your loan application information is safe and secure as it travels over the Internet.
We use leading firewall and network security technology to protect our internal computer systems from unauthorized access. Our customers can be confident that their personal information is completely safe and private after they apply.
Closing & Beyond
Hurray! Your loan has been approved and your loan closing date has been set! This section will give you some idea of what to expect at closing and what happens after closing.-
Where will my closing take place?
If the property securing the loan is close to one of our branches, you will close at a Third Federal branch.
If the property is not close to one of our branches, we will arrange for a title company representative to conduct the closing at the property securing the loan.
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Can I make my monthly payments with an automated debit from my checking account?
Automated monthly payments are available. At the loan closing an automated payment application will be provided. Simply return it at your earliest convenience to enroll in the automated payment program.