*APR= Annual Percentage Rate. APR is effective and updated daily. Rates are subject to change
A fixed-rate mortgage ensures that your monthly payment remains the same throughout your loan term. We offer traditional terms to fit your budget, or you can customize your request by choosing a term of up to 20 years. Fixed-rate mortgages are ideal for those who plan to stay in their house long-term, allowing a consistent payment over the term of the loan.
Adjustable Rate Mortgage (Fixed-rate term with adjustable feature)
An adjustable-rate mortgage (ARM) gives you the benefit of locking in a low fixed interest rate for a certain number of years, then adjusts after the fixed term expires. Adjustable-rate mortgages are ideal for those who may be considering moving within the first 5-7 years, as it allows you to take advantage of lower interest rates than the typical 30-year fixed rate mortgage.
The most popular ARMs have a fixed rate for the first five or seven years, then have an adjustable rate that typically adjusts annually. These are called 5/1 or 7/1 ARMs.
With a 5/5 ARM, your Annual Percentage Rate will stay the same for the first 5 years of the loan versus changing every year. After the initial 5 years, the rate will only adjust every 5 years for the life of the loan, depending on the market.
Adjustable Rate Mortgage (Fixed-rate term with adjustable feature)
As a California homeowner, you can tap your equity easily and affordably for any purpose. Upon approval of your HELOC, we'll establish a credit limit, so you will only need to apply once for this revolving line of credit. And, since you only pay interest on the actual amount you use, it's perfect for an emergency fund! Loan limits range from $10,000 to $250,000 depending on your combined loan-to-value and credit scores.
Interest-only terms available
No up-front costs or annual fees
Pay interest only on the amount you borrow
100% advance availability
Because the balance of a HELOC may change from day to day, you pay interest on what you borrow. You have the option to choose the lowest payments with an interest-only HELOC, which allows you to pay only the interest on the loan for up to 10 years. After 10 years this loan will amortize out over the next 15 years. Or, choose a traditional HELOC where your payment is higher, but you'll pay your loan off sooner because you're making both principal and interest payments.
Buying a home is an exciting event. It's also a complex process that becomes simplified when you partner with USC Credit Union. We'll provide you with the education and guidance you need to buy your home with confidence.
Home ownership offers tax benefits*, builds your credit, and allows you to say goodbye to nuisances such as rent increases and canceled leases. And, when you own your home, you build home equity as you pay your mortgage—a smart way to prepare for the future, today.
From terms like "amortizing" and "escrow" to "qualifying" and "closing costs," home buying seemingly comes with its own language. We understand it's a complex endeavor, so we support first-time homebuyers by offering:
Our Home Buyer's Guide eBook. This free resource focuses on helping members understand the difference in loan options so they can make informed financing decisions. Our eBook also covers how mortgages work, identifies mortgage costs, tells you what you need to know before you begin your search, provides tips on selecting the right agent, and much more! Download your guide today!
Home Buying Seminars. Learn the basics of financing a home at one of our complimentary Home Buyer Seminars. Our real estate experts will discuss your mortgage options, such as term length, fixed vs. adjustable rates, and low down payments. You'll also learn how to avoid excessive "junk" fees and what to look for when making an offer. View our upcoming seminar dates and let's get started.
Follow these steps to make sure you are on the right path:
Check your credit history and get your credit in shape if necessary. Order a current copy of you credit report and address any outstanding issues.
We evaluate scores from the three major credit reporting agencies: Experian, Equifax, and TransUnion. AnnualCreditReport.com is just one of many sites that offer free credit report services.
Determine how much you can put toward a new home. Generally, lenders recommend that people look for homes that cost no more than three to five times their annual household income (assuming the home buyers plan to make a 20% down payment and have a moderate amount of other debt).
Use our payment calcuLator to estimate monthly payments and try out different scenarios based on your income specifics. Your monthly payment will usually also include an amount for property taxes and homeowners insurance. And, if your down payment is less than 20%, you’ll generally also need to get private mortgage insurance(PMI).
Get prequalified. This is the best way to determine how much money you can borrow, and will give you an idea of the price range you should stay within as you're considering your home purchase.
Consider using a real estate agent. While you could try navigating the house-buying waters alone, you receive invaluable information and guidance by working with a licensed real estate agent. Our Right Move® program offers a 20% rebate from the commission of a participating First Team Real Estate agent who represents you. Plus, enjoy other financial benefits, including a 20% discount on escrow services and a 10% discount on a home warranty.
Here are some terms you'll encounter throughout the home-buying process:
Annual Percentage Rate (APR): The yearly rate of interest for your loan. The APR can be variable or non-variable.
Debt-to-income ratio: The percentage of your monthly income that you spend on monthly debt payments. Mortgage program guidelines vary, but a good rule of thumb is to keep your total debt level at or below 36% of your gross monthly income.
Down-payment: The initial payment you make when purchasing a home.
Fees: The homebuyer is generally expected to cover the many costs associated with the purchase process. "Fees" is a catchall term that can include costs for an appraisal of the home, a credit report on the borrower(s), title search, attorney's fees, transfer taxes, recording the deed, property taxes, and much more. Many times, fees are negotiable.
Interest rate: The percentage of your loan amount the lender charges to borrow money. Interest rates are typically based on current market conditions, your personal credit score, your down payment amount, and the type of mortgage chosen. Check today's rates1
Loan term: The period of time you have to pay off your mortgage balance. Shorter loan terms typically mean higher monthly mortgage payments, but often have lower interest rates.
Monthly mortgage payment Your monthly mortgage payment is typically made up of four parts:
Principal. The part of your payment that reduces the outstanding balance of your mortgage.
Interest. The part of your payment that pays your lender for use of the borrowed funds.
Taxes. The portion of your payment that pays the property taxes charged by your local government.
Insurance. The part of your payment that pays for homeowners or hazard insurance, which protects against losses from property damage.
Depending upon your property location, property type, and loan amount, you may have other monthly or annual expenses such as mortgage insurance, flood insurance, or homeowner association fees.
Origination charge: A fee that lenders and brokers receive for overseeing the loan process, from application status to completion. The charge includes document preparation, underwriting costs, and other fees.
Points: Fees paid to the lender or broker for the loan. One point equals 1% of your mortgage amount.
PMI (Private Mortgage Insurance): Insurance that covers borrowers who offer a down-payment less than 20% of the home's value. PMI protects the lender if the borrow fails to pay back the loan.
Did you know? USC Credit Union offers borrowers the option to qualify with as little as 3% down payment* on loans up to $850,000. That means that you can afford more home than you think!
Home is Closer than You Think
3. Application Process
We’re committed to a clear and straightforward application process so our customers understand their loans. We also provide a variety of resources to make the post-application process clear and straightforward.
With USC Credit Union’s mortgage team by your side, home is closer than you think. Our special first-time homebuyer loan program and one-on-one guidance reduce the challenges you may experience as a first-time buyer. We want to be your lender for life!
Closing or “settlement” is when you sign the final mortgage documents, and the property is legally transferred to your ownership.
Before your closing, you will have received the final figures for the transaction, which include closing costs, escrow costs and the down payment amount. If money is due at the time of signing, it’s best to obtain a cashier’s check.
Your lender will send the closing documents to your closing agent. On your closing day, review the documents carefully with your agent, then sign and date them. Some these important documents will include:
The Mortgage Note (your contract)
The Mortgage or Deed of Trust
The final Closing Disclosure
Affidavits and Declarations
The final Closing Statement
You are allowed to read the documents prior to closing. Your real estate agent can go over them with you prior to the closing date to help you understand everything you’re required to sign. Don’t be afraid to ask questions!
To help your mortgage close on time, make sure you provide accurate information on your loan application. Discrepancies in your credit history, employment history, or current bank account balances could delay your application.
Promptly submit any additional documentation as requested.
Do not make big purchases, take on additional debt or make large deposits or transfers unrelated to your loan until after your closing.
Consider having an attorney review your loan documents or attend the closing with you.
4. After You Close
USC Credit Union makes it easy to manage your mortgage account online. You can view your account activity, transfer funds, make payments, and more.
As a USC Credit Union member you automatically receive online statements. If you’re still receiving statements by mail, you can go paperless here. You can switch back to paper statements at any time. Online statements have all the information you see on the paper versions, and are more secure than paper statements.