AFCU Money Matters - Winter 2008 - (Page 14)

home matters Navigating the New Mortgage Environment Many areas of the United States are While many mortgage lenders were currently experiencing a mortgage slowrolling out risky adjustable rate mortgages down, accompanied by record mortgage with low teaser rates, credit unions took a loan defaults and an increased number more conservative approach. In fact, AFCU of home foreclosures. As a result, most made a policy decision long ago not to traditional banks have implemented stricter participate in the risky, subprime mortgage lending procedures, making it more difficult lending business. Instead, they reaffirmed for the average person to borrow money, their commitment to protect and secure especially to purchase a home. their members’ money in order to maintain Before the mortgage slowdown, easy the financial strength of the credit union. credit and low interest rates fueled a housCredit unions loan money to members ing boom, which led to they know and While typical banks may foreclose on a inflation in the housing trust — they don’t home after two or three missed payments, market. When housing rely on mortgage credit unions have more flexibility to work brokers to drum became less affordable, people could no longer with members to avoid default situations. up business or afford the mortgage payments, so mortgage allow just anyone to apply for a loan. lenders began rolling out subprime mortAs not-for-profit financial institutions, gages with low introductory interest rates credit unions exist for the sole purpose to make monthly mortgage payments more of providing financial products, services affordable, at least temporarily. As interest and security to their members. As such, rates increased, payments became unafford- they do not make risky loans, but instead able for many and foreclosures started ocprovide affordable rates and terms that curring in areas where homeowners bought allow homebuyers affordability and property they really couldn’t afford. financial flexibility. Since credit unions are member-driven, not profit-driven, they are in a better position to help their members make sound financial decisions. And, if a member’s circumstances change, credit unions are also more likely than banks to work through those situations with the member to come to an agreeable solution. While typical banks may foreclose on a home after two or three missed payments, credit unions have more flexibility to work with members to avoid default situations. If you’re in the market for a new mortgage loan, stop by an American First branch or visit us at www.amerfirst.org. As your financial partner, we want to see you succeed, and our mortgage loan experts can help you select a loan you can afford with minimal risk. With a mortgage loan from American First, you can be confident that your loan will be from a solid financial institution who has your AFC-888.qxp:Ad 11/1/07 10:23 AM Page 1 best interests in mind. Lowest rates in town Call for today’s rates 14 WINTER 08 ©Aubreyco.com AFC-888 800/ 290-1112, Ext.5092 www.amerfirst.org http://www.amerfirst.org http://www.amerfirst.org http://www.amerfirst.org http://Aubreyco.com

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AFCU Money Matters - Winter 2008 Contents News You Can Use Member Tips What’s Next? Motley Fool: A Tale of Two Borrowers Jean Chatzky: Extreme Jobs The Good Life Home Matters Money Smarts

AFCU Money Matters - Winter 2008

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