Planning to purchase a home in 2023? Whether you’re a first time buyer or looking for your next property, this FREE seminar will provide you with the tools you need to face the unique challenges of the current market. Join us and get advice from our experts in every step of the home buying process. Hors d’oeuvres will be provided, and don’t forget to enter to win a prize! RSVP by March 16th.
Mortgage Payment Scams
The Mortgage Payment Scam has been around a long time. Mortgages are recorded in the local county courthouse and are therefore public information. It is just as easy for a criminal to get a hold of this information as anyone else, so be mindful of any solicitations you get in the mail regarding your property.
How does it work?
A member may receive a letter from a company other than their known mortgage company indicating that they purchased their Freedom mortgage and future payments are to be make to them, not us. This is the entire SCAM. Freedom does not sell the servicing of our mortgages to anyone. If you receive such a letter, please disregard and report it back to us.
How can I protect myself from this type of scam?
- Be wary of any solicitations demanding immediate payment or warning that you are late on a payment that is not from your known mortgage provider.
- Call your mortgage provider to confirm that there have been no changes to your loan servicing agreement.
- Report the letter to your credit union.
- Use the Consumer Finance Protection Bureau’s online portal to file a mortgage-related complaint
- Report any suspected scams to the Better Business Bureau (BBB). Don’t let those crooks walk free!
- Make a payment to anyone who is not your known mortgage lender without verified proof from your original lender.
- Share any personal information with an unverified contact. If it’s personal info, make sure to keep it that way!
- Click on links or download files from an unfamiliar email address.
Freedom keeps all loans, including mortgages, in house for the duration of the loan term. Your loans will not be sold to any other management company. If you receive something suspicious via text, email, or mail, please don’t hesitate to reach out if you are unsure.
Your Turn: Have you encountered a scam like this before? Tell us about it on Facebook, LinkedIn,Twitter, or Instagram @FreedomFedCU.
IS NOW A GOOD TIME TO OPEN A HELOC?
If you’re looking to fund a home improvement project, or if the economic devastation of COVID-19 has left you in need of cash, consider tapping into your home’s equity with a home equity line of credit, or ‘HELOC’.
What is a HELOC?
A HELOC is a revolving credit line allowing homeowners to borrow money against the equity of their home. Borrowers can withdraw money as needed during a set amount of time known as the “draw period,” which generally lasts 10 years. Some lenders place restrictions on HELOCs and require borrowers to withdraw a minimum amount of money each time they make a withdrawal, regardless of need. Other restrictions include the requirements to keep a fixed amount of money outstanding or to withdraw a specific sum when the HELOC is first established; however, borrowers are typically free to spend the money however they please.
Most homeowners are eligible for a HELOC with a debt-to-income ratio that is 40% or less, a credit score of 620 or higher and a home assessment that stands at a minimum of 15% more than what is owed.
How do I repay my HELOC?
Repayment of HELOCs varies but is generally flexible.
Many lenders collect interest-only payments during the draw period, with principal payments being strictly optional. Others require ongoing monthly payment toward both principal and interest.
When the draw period ends, some lenders require borrowers to pay back the entire loan “balloon” amount. Others allow borrowers to pay back the loan in monthly installments over a new time period, known as the “repayment period.” Repayment periods are generous, lasting as long as 20 years.
What are the disadvantages of a HELOC?
A HELOC places your home at risk of foreclosure if not repaid. Before opening a HELOC, it’s a good idea to run the numbers to ensure you can easily meet the payments.
Also, many lenders require the full payment of the HELOC after the draw period is over. This can prove to be challenging for many borrowers.
Finally, if you don’t plan to stay in your home for long, a HELOC may not be the right choice for you. When you sell your home, you’ll need to pay the full balance of the HELOC.
A HELOC can be a great option now
HELOCs have variable interest rates, which means the interest on the loan fluctuates along with the general interest rate, sometimes dramatically.
The economic fallout of COVID-19 has generated historically low interest rates. The average APR for fixed 30-year mortgages has hovered at the low 3% for months now, and experts predict it will continue falling. The low rates make it an excellent time to take out a HELOC with manageable payback terms.
The economic uncertainty the pandemic has generated also makes it a prime time to have extra cash available for any need that may arise.
Now may be the perfect time for you to refinance your current mortgage, from another loan provider, into a lower rate from Freedom Federal Credit Union! We offer a wide range of programs with low rates and great terms. Contact us about a refinance option that meet your needs today.
About Freedom Federal Credit Union
Freedom serves and is open to anyone who lives, works, worships, attends school, volunteers, or has family in Harford or Baltimore County, MD. As a credit union, we are committed to putting you first, not shareholders, and helping you achieve your financial goals. Learn more at freedomfcu.org or call us 800-440-4120 to see how we can help.
Your Turn: Are you looking to sell your home? Tell us about it on Facebook, Twitter, or Instagram. @FreedomFedCU