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 principle, interest, taxes and insurance (if applicable, mortgage insurance)

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.