Thrifty Thinking: Borrowing Money

I recently had the chance to interview OneUnited Bank, president, Teri Williams about some financial fitness tips and initiatives the bank is launching this year, including the Waive program.

What are some smart tips for people looking to borrow money for a home?

·         Obtain a free credit report at www.annualcreditreport.com before applying for a home loan to make sure your information is accurate. Dispute any inaccurate information and wait 30 days for them to fix it before you apply for a home loan.

·         Prioritize what is more important to you based on your family’s budget… minimizing upfront cost, minimizing monthly payments or minimizing the term (time period) of the home loan so that you pay it off sooner.

·         Based on your priorities, shop around for the best “financial deal”, but also focus on service. Ask lenders, do you service your loans (so that you will have a relationship with them for the term of the home loan) or do you sell the servicing to another party? If you find a lender that you trust, make sure they service their loans.

What about people who don't have good credit – how can they be prepared for home ownership?

·         If you have bad credit, you may still be able to obtain a home loan, but you will have to pay more. We recommend rebuilding your credit before obtaining a home loan (which is why we offer the UNITY Visa Card which is a secured credit card designed to rebuild credit and includes a “How to Rebuild Credit” Program.)

What sets the Waive program apart from other programs?

·         Many people would like to purchase a home or refinance their home loan, but do not have the upfront money required to pay for an appraisal, credit report or other lender fees. With the Waive Home Loan Program, we are waiving our fees to make it more affordable to purchase or refinance a home while rates are still low.

What other tips can you share about the home financing and purchasing process?

·         Buying a home may be the most significant financial decision you make. Consider putting together a “Kitchen Cabinet”…or a group of family/friends…to help you make the best decision. Also remember with real estate, its location, location, location. In other words, finding a best location should be a higher priority than finding the best home. You can update the home, but you can’t change the location!