Connexus Credit Union offers great incentives to its members to take out a home mortgage with them. They offer conventional loans for bad credit and low down payment borrowers, they have a variety of loan terms, and they offer ways you can save money on closing costs.
On top of all that, Connexus Credit Union is already offering loans and services that match or surpass government insured options. All that’s required is you become a member, which is an easy thing to do.
Mortgage Application Requirements
Connexus Credit Union is more forgivable than many other lenders in that it only requires a 600 credit score from its borrowers. However, before you can borrow from them you must first become a member. The easiest way is to make a one-time donation of $5 to the Connexus Association. However, there are also three other ways to become a member.
The actual mortgage application is very easy compared to other lenders. You will obviously need to provide a photo ID, two years of tax returns, a W-2, and a pay stub, but from there, your work is practically done.
CCU uses a sophisticated underwriting system that enables them to request very little information from you to verify any entered data. Many people only have to enter in a single W-2 form or pay stub (as opposed to several with other lenders). This expedites the whole process and makes it so you don’t have to go rummaging through old files underneath your bed.
Types of Home Loans Available
Unlike many other lenders, Connexus Credit Union does not offer FHA, VA, or USDA loans. However, don’t let that dissuade you from them. Their conventional loans come with a slew of options, and many of them are great alternatives to FHA loans.
CCU offers both fixed and adjustable-rate mortgages for either purchasing or refinancing. Their adjustable rate mortgages start relatively low compared to other lenders and are a great option if your new home purchase may not be your ‘forever’ home. They offer a plethora of packages to choose from, including 5/1, 7/1/ 10/1, 3/3, 7/3 and 10/3 ARMs.
They also offer three different packages for their fixed-rate loans (whereas most lenders only offer two. Choose a loan term of either 15, 20, or 30 years. If a fifteen-year loan term monthly payment is too high, you might very well be able to afford a 20-year term. Compared to 30, you’ll save thousands of dollars when paying off your home.
Many first time home buyers don’t even consider conventional loans because 1) their credit score is too low, and 2) they can’t make a large down payment. However, CCU lends to bad credit borrowers (600 credit score minimum) and offers conventional loans that only require a 3% down payment. Years ago this was unheard of with non-government-insured loans. Now it’s a reality.
Because their loans aren’t government-backed, they don’t have to charge mortgage insurance for the life of the loan. Since 2013, FHA loans require PMI payments for the life of the loan, regardless of how much equity the borrower has built up.
With a conventional loan through Connexus, you stop paying for mortgage insurance once you reach 20% equity. This is something to keep in mind in today’s housing market where house prices are jumping because of a lack of supply and new trade tariffs.
Because house values are rising so fast, all it often takes is a new appraisal to show that you have more than 20% equity built into your house. For many borrowers right now this is happening after just a couple of years. Again, you can’t avoid these payments with an FHA loan.
If you’re buying a home that’s more than $453,100, you’re going to need a jumbo loan, which CCU indeed offers. Jumbo loans are generally needed most in high-cost areas. You’ll have to look up your area’s loan limits to know what purchase price exceeds the standard maximum.
Home Equity Loans & HELOCs
With a home equity loan or a 5/1 arm, you can borrow up to 90% of your home’s equity and get all the money at signing. With a home equity line of credit (HELOC) or interest-only HELOC, you can borrow as needed up to your line of credit limit.
Fees and Rates
Connexus Credit Union always posts current interest rates online. Tell them where you plan to purchase, the loan amount, and the main property use and CCU will give you the current interest rate for the loan you’re seeking.
When closing, you will pay third party fees (such as appraisal and inspection fees), but this isn’t money that goes towards Connexus. Instead, it’s money that Connexus will pass on to the actual company that performed the particular service.
Once you have a mortgage with Connexus Credit Union, there are fees when making payments online or over the phone (rather than mailing in your payment). If you pay online, there is a convenience fee of $9.95; if over the phone, $14.95.
Though it seems odd that any company with a strong online presence would charge a convenience fee for paying any other way than mail in a check, it’s common for a lot of lenders to do this.
Connexus Credit Union’s Mortgage Process
You can apply online or call to get started. Like its competitors, Connexus has beefed up its online loan platform for mortgage applications. It’s intuitive, educational, mobile-friendly, and provides the following services:
- Personal loan management
- Free rate quotes
- Document uploads
Unfortunately, you can’t track your loan’s progress through the online portal, but that particular service is expected to roll out soon. In the meantime, each borrower is assigned a loan officer that works one-on-one with him or her until closing. Some people see this is as a negative, but it adds a needed human element to what would otherwise be a stressful situation for most people.
When you buy or refinance your home, Connexus Credit Union will take up to $600 off of closing costs if the loan amount is $150,000 or more. Say your closing costs were approximately $5,000 for a $150,000 loan amount, you’d be saving 12% on closing. Just be sure to enter the promo code “SAVEONCLOSING” during the application process.
Another notable feature is that Connexus Credit Union will consider alternative credit data if your financial history is limited. This is good for people who have bad credit because they’ve never had to take out a loan.
If credit bureaus factored in on-time payments on both monthly rent and utility bills, many people’s credit scores would be much higher. Fortunately, CCU will take these types of factors into account when considering a loan application.
Many people think that because Connexus Credit Union doesn’t offer government-insured loans that it can’t be a major player in the lending world. This isn’t true. Take into account that CCU offers loans for poor credit and low down payments and it becomes obvious that CCU has maneuvered itself into an excellent position with informed borrowers.
If you’re just starting your house hunt, keep Connexus Credit Union on your shortlist for lenders. It offers many conventional loans that are as good, if not better, than FHAs.