GCTFCU Blog | Credit Union Killeen TX | Home Loans, Secured Auto Loan in Central Texas

Fixed Vs. Floating Interest Rate: Home Loans In Killeen, TX

7. January 2016 Administrator Home Loans (0)

Getting a home loan from a credit union in Killeen, TX is not a very tedious job as there is minimum paperwork involved. However, you need to choose whether you want to opt for a fixed or floating rate of interest. Both the options have their own advantages as well as disadvantages and it is up to you to decide which one is better.

Fixed rate of interest home loans

A fixed rate of interest implies repayment of loan in fixed equal installments during the loan term. In this case, the rate of interest remains constant and does not change with the market fluctuations.

Advantages:

No alterations in the rate of interest irrespective of market conditions.
Perfect option for people who have fixed budgets.
It is a secure alternative.

Disadvantages:

Loans are 1 to 2.5% higher than floating interest rate depending on the bank.
If the interest rate decreases in the market, you will not get any advantage.
In some instances the fixed rate home loan is fixed only for a few years and not the complete loan tenure.

Floating rate of interest home loans

If you apply for a home loan with a floating rate of interest, it simply means that the interest rate will differ as per the market conditions. In this instance, the interest rates are associated with a base rate and a floating element. Therefore, if there is any alteration in the base rate, the interest rate also fluctuates.

Advantages:

Cheaper than fixed interest rate home loans.
If the floating rate increases than fixed rate, it is temporary and not for entire loan period.
Can prove to be beneficial if you want to save money.

Disadvantages:

Monthly installments are not constant.
You can face difficulty in planning your budget.
There has been a hike in floating interest rates in recent times.

It can be concluded that fixed as well as floating interest rate home loans in Killeen have positive as well as negative aspects. Generally, borrowers opt for a floating rate of interest when applying for a home loan from a credit union. However, if you want more security and certainty, it is better to opt for a fixed rate home loan.

If you are looking for affordable home loans in Killeen, TX, consider Greater Central Texas Federal Credit Union. For more information, call at (254) 690 – 2274 or visit 3305 E. Elms Rd., Killeen, TX 76542.

Eligibility For Home Loan In Killeen, TX

21. December 2015 Administrator Home Loans (0)

A home loan is a perfect way to purchase your dream house in Killeen, TX. However, before applying for a loan from a credit union or any other financial institution, it is important to know whether you are eligible for the same or not. It will help you save time and simplify the home loan process.

Listed below are some eligibility criterion set by most financial institutions in order to apply for a home loan in Killeen:

Age: Age is an important consideration for home loan approval. Younger people are more likely to get a loan as compared to those who are nearing retirement.

Source of income: Your source of income along with its stability is an important factor taken into account by a credit union. For instance, having a salaried job can fetch you a higher loan amount because of your job stability.

Additional debts: If you have an existing loan repayment, it can affect your chances of getting a home loan from credit union. It is better to pay off all your smaller loans (if any) before applying for a home loan. Additionally, having a good repayment history may also increase your chances of getting a home loan.

Proof of income: You will be required to show at least three of your recent pay slips to your lender. If not, you may be asked to submit a letter from your employer which states your annual salary. In case you are self-employed, you may be asked to provide the financial accounts for the past two years.

Debt to income ratio (DTI): Your debt to income ratio is another factor considered by a credit union before approving a home loan. It is basically a measure of your ability to manage monthly payments and repay debts as well. DTI is calculated by dividing total recurring monthly debt by gross monthly income. You should calculate it prior to deciding how much loan you want.

Credit score: Having a good credit score increases your chances of getting a home loan approved easily. Therefore, it will be beneficial if you maintain a decent credit score by paying all your installments and loans on time.

We, at Greater Central Texas Federal Credit Union, offer affordable and convenient home loans to our members in Killeen, TX. To know more about our services, feel free to call us at (254) 690 – 2274 or visit 3305 E. Elms Rd., Killeen, TX 76542.

Unsecured Vs. Secured Auto Loans

15. December 2015 Administrator Auto Loans, Car Loan (0)

If you are contemplating on getting an auto loan, there are numerous options available for you. You need to thoroughly research and establish the background of the type of auto loan you want to opt for. Auto loans are basically divided into two categories: secured and unsecured. Before you select an option for yourself, it is better to understand the difference between the two.

Secured Auto Loan:

A secured auto loan is the one in which your asset is used as collateral in case you fail to pay back the mortgage amount along with the interest. In an auto loan, the security is generally your car. This means your lender can sell off your car if you do not return the loan amount.

Interest rate: In a secured auto loan, the interest rate does not vary over a period of time. The advantage here is that since secured auto loans are mostly given on a fixed rate and your repayment amounts do not get altered.
Loan term: A secured auto loan generally has a shorter repayment term. However, since the risk is minimal in this case, so you are likely to get a lower interest rate.

Unsecured Auto Loan:

If you opt for an unsecured auto loan, you will not be required to give any security from your side. The lender approves the loan on the basis of your current financial resources. Every lending organization has its own criteria to conclude if you are fit for an unsecured loan or not.

Interest rate: When it comes to an unsecured auto loan, the rate of interest can either be fixed or variable. This is unlike the secured auto loans where there is only a fixed rate of interest. Although the rate of interest is higher, you can choose between fixed and variable depending on your financial condition. While a variable rate of interest will give you more flexibility, you can also opt for the fixed rate of interest if you have complete control over your finances.
Loan term: The loan term for an unsecured auto loan can be short as well as long on the basis of individual assessment.

Both types of loans have their own advantages and you must choose what is best suitable for your individual situation.

We, at Greater Central Texas Federal Credit Union, offer unsecured and secured auto loans in Central Texas. For more information, feel free to call us at (254) 690 – 2274.

Tips To Get The Best Home Loan Deal In Killeen, TX

7. December 2015 Administrator Home Loans (0)

A credit union is a community organization run by a group of individuals for their own members. Borrowers are increasingly opting for credit unions owing to the ease of getting a home loan from these organizations.

If you are on the lookout for an affordable home loan in Killeen, TX, there are some factors that you need to consider. Do a thorough research about the various credit unions and finalize the one where you can get the best home loan deal.

The following factors should be considered when applying for a home loan:

Ask for quotes from various credit unions: Different credit unions will offer you varied rates of interests on home loans. Make sure you ask for a quote to have an idea about your monthly repayment amount. Apart from the rate of interest, you should be able to know the limit up to which you can borrow. Compare quotes from different credit unions and finalize the one that offers the lowest rate of interest.

Fixed or adjustable rate loan: You can choose to get a home loan at a fixed rate of interest or an adjustable one. In case you select a fixed rate, the repayment amount remains constant throughout the loan term. On the other hand, the interest charged on adjustable-rate mortgage fluctuates over the time period of your loan. This eventually means your repayments will vary as well.

Choosing the loan term: You can get to choose a customized loan term from a credit union. Therefore, you can decide the amount of time it will take you to return the home loan. Depending on your income and expenditure, you can settle for a particular number of years within which you will be able to repay your loan. Though a longer duration can lower your monthly payments, it would eventually lead you to pay more interest.

Fees and charges: Check if you need to pay any fees or additional charges before getting a home loan approval. These may include ATM fees, loan fees, wire transfer fees etc.

We, at Greater Central Texas Federal Credit Union, offer hassle-free home loans in Killeen, TX. For more information, you can call us at (254) 690 – 2274 or visit our office at 3305 E. Elms Rd., Killeen, TX 76542.

Home Loan: Checklist For Borrowers

19. November 2015 Administrator Home Loans (0)

More and more homebuyers are considering credit unions for their home loan needs. A credit union is more considerate towards the financial needs of its members. Thus, it offers loans at competitive interest rates and easy repayment options. The procedure is very simple, quick and requires least paper work.

Here is a checklist you need to consider before applying for a home loan.

Documents: You may be required to provide some legal and financial documents to apply for home loan through credit union. These documents include:

Sale Agreement: Before you apply for a home loan with your credit union, it is requisite to have the sale agreement or evidence of deposit. You will need to provide the registered title and location of the relevant property for the pre-approval procedure.
Salary Verification Letter: Whether you are a salaried person or self-employed, you need to provide your salary and income verification letter. You need to furnish pay stubs for at least a month’s period for the loan. You also need to attach the recent W-2 statements.
Tax Returns: To apply for the home loan, the credit union requires you to provide your completed tax returns including schedules and statements. You need to offer certificate of payment of taxes.
ID proof: You must add a copy of your date of birth certificates along with other ID proofs, as they are crucial for the verification of the identity.
Attach Credit Report: Your credit score is an important deciding factor, as it will determine the amount of loan that you can borrow from the credit union and the rate of interest that you will have to pay. Check your credit file before applying for the home loan.

Assess your ability to repay: Failure to pay the loan amount can lead to penalties and it will have adverse effect on your credit score. Make sure you have the ability and a steady source of income to ensure that you can repay the amount.

Choose the right loan period: Depending upon your budget, choose your loan period. If you choose a longer period, you may have to pay less every month, but the rate of interest may be higher, so decide the loan period accordingly.

Compare the prices: While applying for a home loan, you need to pay initial valuation and legal fee, which is included in APR, so compare the costs and fee to get the best deals.

We, at Greater Central Texas Federal Credit Union provide home loans at affordable interest rates. For more information, visit us at 3305 E. Elms Rd., Killeen, TX 76542 or call at (254) 690 – 2274.

Low Income Auto Loan In Central Texas

14. November 2015 Administrator Auto Loans (0)

Having a low monthly income can make it challenging for you to secure an auto loan. You need a loan plan that suits your budget requirements. A number of credit unions in Central Texas provide auto loans and refinancing options to people in the lower income group. Do a thorough research and compare the interest rates offered by these institutions to choose the one suiting your requirements.

Here are the factors that you need to consider while applying for an auto loan in Central Texas:

Period of job: In order to get a quick approval for the loan, you must have spent at least one year in your present job. However, if you did not stick to a job for a year, a credit union may check for at least three years of uninterrupted employment. At the most, you should have changed only 2-3 employers within this period.
Down payment: If you are applying for a low income auto loan, you will be required to pay some form of down payment to the lender. In case you don’t have any money at your disposal, you may inquire from your lending organization about the alternatives they can offer.
Credit profile: If you have a higher credit score or a longer credit profile, you can get a better rate of interest for a low income car finance program.
Duration of the loan: You can get your loan approved at a faster pace if you choose to repay within a shorter period of time. However, loans with shorter durations usually entail higher monthly premiums.
Debt to income ratio (DTI): Most of the lenders prefer a maximum DTI ratio between 40 to 50 percent. To calculate your DTI ratio, add up all your bills and divide the total amount by your monthly pre-tax income.
Payment to income ratio (PTI): For approving a low income auto loan, most lenders prefer a PTI ratio between 15 and 20 percent. In order to compute the PTI ratio, divide your new car payment by your pre-tax income.
Co-signer: There are a few lenders who approve convenient interest rates for low income auto loans in case you get a co-signer and have a good credit rating.

We, at Greater Central Texas Federal Credit Union, offer low interest auto loans in Central Texas. For more information, you can call us at (254) 690 – 2274 or visit 3305 E. Elms Rd., Killeen, TX 76542.

Terms You Must Know Before Taking Home Loan

5. November 2015 Administrator Home Loans (0)

When applying for a home loan, there is a lot of paperwork and documentation that you need to undertake. There are a number of jargons that you need to be familiar with for a hassle-free loan process. Here is a list of some of the common terms that you may come across while taking a home loan in Killeen, TX:

Offer Letter/Sanction Letter: It is a formal confirmation letter given by the financial institution from where you are taking the loan. This letter states that you have been duly considered to be one of the loan applicants. However, this letter does not confirm the approval of a home loan. The loan will only be sanctioned after verifying all the documents and eligibility criteria of the applicant.
Equated Monthly Installments (EMI): EMI is the amount you repay to your lender every month. It includes the principal repayment along with the interest amount. Three basic factors are considered while deciding your EMI. These include the principal amount, loan duration and rate of interest. An amortization schedule shows how your EMIs have been formulated over the period of entire loan term.
Pre-EMI: If you buy a property that is still under construction, you will be given only a part of the loan amount. You are required to make the interest payments on this partial amount. These payments are known as pre-EMI. This eventually means you will have to keep on paying more interest to the financial institution till the time your builder takes to complete the construction of the property.
Credit Appraisal: The process of credit appraisal involves looking at various factors before finalizing the loan. The financial institution will consider parameters such as income, age, savings, qualifications, work experience etc. They will also check the number of loans you are presently servicing. Your eligibility for the loan will only be finalized after scrutinizing all these factors.
Margin: It is important to note that any lending organization will not sanction you the entire amount required for your home. You can get up to 90% of the cost and the rest you will have to put in from your side. This balance amount is called down payment or margin.
Post-Dated Checks (PDCs): PDCs are scheduled for future dates and cannot be processed till the mentioned date arrives. Generally, the lending organization will ask you to give them post-dated checks for one to two years. These checks need to be addressed to the credit union or home loan company. The exact amount of EMI to be paid should be mentioned on these checks.

To know more about the home loan process, feel free to contact Greater Central Texas Federal Credit Union at (254) 690 – 2274.

The Pros Of Secured Auto Loan

20. October 2015 Administrator Auto Loans (0)

A secured auto loan is a good alternative for people looking for an affordable financing option. In this, the borrower needs to put forward collateral in exchange of the loan amount. In most cases, the collateral offered is the item for which the loan is being taken. For instance, the security in an auto loan is the recently bought vehicle itself.

Here are some of the benefits of a secured auto loan:

Flexible loan conditions: As a secured auto loan requires the borrower to present a collateral, it minimizes the risk for the lender. Hence, the terms and conditions of the loan are quite flexible which eliminates any sort of financial burden on both the parties involved. The borrower need not have a high income to be eligible for a secured loan.

Lower interest rates: Pledging an asset by the borrower subsequently brings down the interest rates on a secured auto loan. The lender is assured that he can take over the possession of the vehicle in case the borrower is unable to repay the loan. Lower interest rates imply easier and regular monthly payments, which in turn, improves your credit rating.

Quick Approval: Compared to other types of loans, it is much easier to get approval for a secured loan. Due to minimal risk, there is no need for the lender to conduct through background checks or income verification. Thus, secured auto loan applications are approved much faster, usually with 48 to 72 hours.

Economical repayments: The interest rates are much lower when it comes to a secured auto loan. This eventually means that the borrower has to give out less money for monthly repayments. You can even request to increase the term of loan repayment to make it even simpler to pay back the capital along with the interest.

More Reliable: By keeping a guarantee with the lender, there are minimal chances of the borrower defaulting on the loan. Also, knowing that the vehicle will be confiscated if he fails to repay the credit encourages him to be regular in his payments.

We, at Greater Central Texas Federal Credit Union, offers affordable secured auto loans in Killeen, TX. Being a non-profit organization, our credit union works solely for the benefit for the members. For more information, you can call us at (254) 690 – 2274 or visit our office at 3305 E. Elms Rd., Killeen, TX 76542.

Borrowing From A Credit Union: The Benefits

13. October 2015 Administrator Auto Loans, Car Loan, Home Loans (0)

A majority of people looking for easy financing options are turning to credit union these days. A credit union is basically a member owned and operated non-profit organization working solely for the benefit of the clients. When you are looking for a home or auto loan, you must consider applying at a credit union to get an affordable deal.

Here are some of the benefits of borrowing from a credit union:

Competitive Interest Rates: Working with a customer centric approach, a credit union offers loans at significantly low interest rates as compared to other financial institutions. As they are not liable to pay any state or federal taxes, all their profits are given out to the members in the form of low interest rates.

Excellent Customer Service: A credit union always keeps customers’ benefit as their topmost priority. They formulate customized loan products, policies, terms and conditions according to the client’s requirements. Their staff even assists the clients in the loan application process.

Lower Fees: The loan application fees charged by a credit union tend to be lower so as to benefit the customers. The transfer fee is also less and usually, there are no ATM charges levied from the clients. This in turn, implies that you can save a lot of money and add to your savings substantially.

No Hidden Charges: All the rules and regulations of credit unions are very clear as well as explicitly stated. There are no hidden charges or fines in case you pay back the loan before the stipulated time period.

Fewer Income Requirements: In order to be eligible for borrowing from a credit union, you do not need to have a considerably high income. People who have a low income can also get approval for their loan application. The staff at a credit union is more amenable to the clients’ needs and willing to make minor alterations in terms of the loan.

Repay Loan Through Various Channels: A credit union allows you to repay the loan through various channels, such as payroll deduction or direct deposit. You can even skip-a-payment once a year in case of a financial crisis.

Greater Central Texas Federal Credit Union is a leading credit union in Killeen, TX. We offer low interest secured and unsecured loans for homes, vehicles, etc. For more information, you can call us at (254) 690 – 2274 or visit our office at 3305 E. Elms Rd., Killeen, TX 76542.

Home Loan Tips: Credit Union Killeen, TX

6. October 2015 Administrator Home Loans (0)

Buying a house is a huge and one time investment for most people. Therefore, it is important to choose a home loan provider wisely so that this liability can be eased to some extent. With so many financing options available, it can be difficult to choose the right one. A credit union is a reliable option that can provide you the loan amount at affordable interest rates, the lowering your monthly repayment amount.

Read on to know about some tips for getting a home loan from a credit union.

Research thoroughly: It is suggested to carry out complete research before applying for a home loan. Compare the interest rates of various financial institutions so that you are able to find a plan with affordable interest rates, making it easier to repay the loan. Acquaint yourself with the jargons used in home loan agreements so you can understand the terms and conditions properly.

Check your credit score: Your credit score is an important point of reference when it comes to getting a home loan approval. It helps to determine your consistency in repaying loans, paying taxes etc. The interest rate you are likely to be quoted depends a lot upon your credit score.

Decide the monthly installment: It is advisable to apply for a loan that fits your budget. Evaluate your monthly income from all sources and the necessary expenditures to determine the amount that you can spare towards your home loan repayment.

Prepare documents: Make sure you have all the required documents at hand before applying for the home loan. The lender may ask for the closing disclosure from previous home sale (if applicable), alimony funds, relocation agreement and retirement statement etc. You should be prepared with all the documents beforehand in order to make the process hassle-free

Read the agreement: You must read each and every point mentioned in the home loan agreement thoroughly. The loan tenure, interest rates, EMI amount, due date for payment and other important details should be clearly mentioned therein. Clear all your doubts and if there is anything that you do not understand, make sure you ask the agent to avoid any confusion later on.

We, at Greater Central Texas Federal Credit Union, provide affordable home loans in Killeen, TX. We offer low interest rate, easy repayment options and flexible loan plans to suit the requirements of the clients. For more information, you can call us at (254) 690 – 2274 or visit our office at 3305 E. Elms Rd., Killeen, TX 76542.