Home Loan FAQ

What type of home loans does OKCU offer?

OKCU has conventional, FHA, VA, no down payment, jumbo and construction loans available. You can also choose between fixed and adjustable rates.

How much do I need for a down payment?

This amount will vary based on your loan type. Down payments typically range from 0 – 20% of the purchase price.

What does my credit score need to be?

The minimum score to qualify for a home loan is 620 and requires a clean credit history for the past 12 months. The higher your credit score the more options you have for financing your home.

What kind of documents will I need to provide?

This list is not comprehensive and can grow quickly depending on your personal situation.

• Current paystubs to include the last 30 days
• Current bank statements to include 30 days
• Last 2 years of W-2s
• Signed copies of your last 2 years of Federal tax returns with all schedules
• $550 deposit for appraisal

 

What is private mortgage insurance (PMI) on a conventional loan?

Mortgage insurance protects lenders in case a borrower defaults on a loan. If your down payment is less than 20%, you’ll be required to have mortgage insurance. The cost of PMI will be rolled into your monthly payment.

What are closing costs and who pays them?

Closing costs are fees to process and close your loan. Some examples include title insurance, appraisal, recording and credit report fees. You’ll be responsible for closing costs, but you can often negotiate to have some paid by the seller.

What is included in my estimated monthly payment?

Your monthly payment will typically include principal, interest, taxes and insurance (if applicable, mortgage insurance)

What is an adjustable-rate mortgage?

An adustable-rate mortgage (ARM) is a home loan with an interest rate that will adjust over time based on market conditions. Adjustable-rate mortgages often have a lower rate fixed-rate mortgages. 

Why should I choose an adjustable-rate mortgage?

An ARM might be a good option for you if you plan to sell or refinance your home before the end of the term, expect your income to increase in the next few years or want the benefit of a lower initial monthly payment. 

What is included in my monthly mortgage payment?

Principal

The principal balance of your home loan is the amount of money that you originally borrowed to pay for your house. Every month, your mortgage payment will cover a portion of your principal balance.

Interest

The amount of money you pay each month is based on your interest rate (the annual cost of borrowing money from a lender) and your amortization schedule (the way your principal and interest payments are distributed over the life of your loan). Your interest rate will have an impact on the total cost of your home – the higher your rate, the more money you’ll pay over your mortgage term.

Escrow

When you close on your home, OKCU will open an escrow account for property taxes and homeowners insurance premiums. Every month, you will make a prorated payment for both expenses, and the balance in your escrow account will be used to pay your property tax and homeowners insurance bills in full annuallly.

Private Mortgage Insurance (PMI)

If you purchased your home with a down payment of less than 20%, you will be required to pay for private mortgage insurance. PMI is designed to protect OKCU from high-risk borrowers – homeowners who may default on their loans.
 

Can I find out how my mortgage payment is being applied to the principal balance, interest and escrow?

You can call us at 405.763.5496 or email us at RELoanServicing@okcu.org to get a copy of your amortization schedule. If you are searching for a convenient way to get a rough estimate, you can use our Home Mortgage Calculator to review the principal, interest and escrow charges that make up your monthly payment.
 

Can I make extra payments on my mortgage?  How do I do that?

Yes, you can make extra payments without being charged an early prepayment penalty. Please call 405.763.5496 or log into online banking to get started; make sure that you apply your payment to the principal balance of your mortgage to pay off your home loan faster. You can also mail your payment to P.O. Box 24027 Oklahoma City, OK 73124. Please state that you want your extra payment applied to the principal when you fill out the memo section on your check.
 

Why did my mortgage payment change?

If you have a fixed-rate mortgage, your PI (the combined payment for principal and interest) will remain the same. Your escrow payment, on the other hand, will change whenever your property tax bill or homeowners insurance premium fluctuates. If your tax and insurance bills go up or down, your monthly mortgage payment will too.

What is an escrow analysis and how will it help me manage my monthly mortgage payments?

An escrow analysis is a document that breaks down your escrow payment history over a twelve-month period. Every February, we create an annual escrow account disclosure statement that includes an escrow analysis of your past payments and a series of projected payments for the next year; that way, you will know if your monthly mortgage payment will increase or decrease. Please email us at RELoanServicing@okcu.org if you have any questions about your annual escrow account disclosure statement.

When can I order a new mortgage coupon book?

Every April, we recalculate your monthly mortgage payment based on the results from your escrow analysis; if you make your mortgage payment via mail, you will need to order a new mortgage coupon book to make sure you are sending us the correct payment amount. We want to make this process as easy as possible for our members, so give us a call at 405.763.5496 to place your order. Let us know which OKCU account you would like to use to pay the $5 processing fee, and we will send you your updated coupon book within 2-3 weeks.

I’ve filed a mortgage insurance claim. What should I do now?

If you need to deposit a check from your insurance company, we will ask for the following documents to process your payment in a timely manner:

• Insurance Claim Summary (typically arrives with the claim check)
• Claim Check for Deposit
• Contractor Invoice and/or Estimate(s)
• Receipts for Material, Supplies, etc.

Any requests for additional documentation will vary based on your loan type, so make sure that you contact us at 405.763.5496, RELoanServicing@okcu.org or visit one of our locations for further assistance. Keep in mind, investor approval and/or property inspection(s) may be required prior to the disbursement of your insurance proceeds.

What should I do if I change my insurance company?

Let OKCU know by sending an email to RELoanServicing@okcu.org or calling 405.763.5496. Your premium may change if you modify your insurance policy, whether you’re getting additional coverage for your home or canceling your existing plan. It is important for you to deposit any refund checks you may receive into your escrow account, where they will be applied to your new premium.

What if I cancel my homeowners insurance policy?

If you cancel your policy without sending us the information for your new insurance provider, we will apply a lender-placed insurance policy to your escrow account. This type of homeowners insurance is expensive, and is designed to protect OKCU against the risk of an uninsured home – not the borrower.

What will I need to complete my tax return?

A Mortgage Interest Statement (Form 1098) is mailed to members at the end of January, and if you have signed up for online banking, you can also view an electronic copy of your tax documents by clicking on the Statements tab.

Why would I refinance my home loan?

• Lower your monthly payments by increasing your term
• Reduce the total amount of interest you pay for the home with a shorter loan term
• Eliminate FHA mortgage insurance by refinancing into a conventional loan
• Use your home’s equity to take cash out

 

Why would I refinance to take cash out?

• Consolidate debt to lower your total monthly payments
• Consolidate debt because the interest rate on your mortgage is likely going to be lower than the rate you're getting on other types of loans
• Your mortgage interest may be tax-deductible, while your credit card interest is not
• Make a one-time big purchasethat might otherwise require you to borrow funds at a higher, non tax-deductible interest rate

 

What does Loan-to-Value mean?

• Your loan-to-value ratio (LTV) describes what you owe on your mortgage as a percentage of the total current value of your property
• A lower LTV ratio may get you a better rate and can let us know if you have enough equity to get additional cash
• A higher LTV ratio means you have less equity in your home, and your refinancing may require Private Mortgage Insurance (PMI), which would increase your monthly payment

 

What kind of documents will I need to provide?

This list is not comprehensive and can grow quickly depending on your personal situation.

• Current paystubs to include the last 30 days
• Current bank statements to include 30 days
• Last 2 years of W-2s
• Signed copies of your last 2 years of Federal tax returns with all schedules
• $550 deposit for appraisal

What kind of documents will I need to provide?

This list is not comprehensive and can grow quickly depending on your personal situation.

• House Plans
• Cost Breakdown/Budget
• Contract with Builder
• Deed to property
• Current paystubs to include the last 30 days
• Current bank statements to include 30 days
• Last 2 years of W-2s
• Signed copies of your last 2 years of Federal tax returns with all schedules

 

How much do I need for a down payment?

Minimum down payment is 10% of the cost-to-build plus the land value. If you have owned your lot for at least 12 months, OKCU can consider the appraised value of the lot as a contribution toward your down payment.

How does a construction loan work?

A construction loan only lasts for a maximum of 12 months, and you are essentially given a line of credit up to a specified limit, and you submit “draw requests” to OKCU, and only pay interest as you go.

Will I need to sell my current home before I get a loan to build a new home?

It will depend on your financial situation and whether you can handle the total amount of debt of both home loans (existing and new).

How do I choose a builder?

You should shop for your builder as carefully as you shop for your home.

1. Ask friends and relatives for recommendations.
2. Check the Oklahoma Home Builders Association List
3. Ask the builder for references. When you talk to previous clients who say the builder kept in constant contact and the project was completed on time you're probably hiring a reputable builder.
4. Visit a builder's recently built homes and subdivisions. Drive by on a Saturday morning when home owners may be outside doing chores. Introduce yourself and say you are considering buying a home from the builder who built their home.

 

Can I build the house myself?

In order to finance a construction loan with OKCU, the builder has to be a member of the Central Oklahoma Home Builders or Oklahoma State Home Builders Association. Subject to OKCU's approval.

How do you calculate the construction loan amount?

The land value plus cost-to-build or the appraised value - whichever is less.

Do I need to already own a lot?

Nope! OKCU frequently does construction loans that include both the house and the land - it’s all part of the cost of building a house. If you have your land already, that’s great, but you certainly don’t need to in order to get a construction loan.

Can I use a VA loan for a construction loan?

Nope! A VA Loan can’t be used as a constructions loan but can be applied to your permanent financing after your home is complete.

Can I get a loan if I've already started construction?

No.