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Issue Date: May 2004 Issue

Money Matters

Third Federal Savings & Loan Association
Chrissy Kadleck

It's never fun to go to the bank and apply for a loan, but Third Federal Savings & Loan Association says that with a little education, new-home buyers can find the best loan products to make their blueprints a reality and the process less painful.

Whether dealing with construction loans, bridge loans or even home-equity lines of credit, Third Federal works with its clients to offer the most favorable equation to bring the needed dollars and cents to the deal.

Preapproval, low rates, closing costs, loan servicing, simplicity of the mortgage process, as well as the experience and reputation of the lender are all important items to consider when shopping for a mortgage.

The first thing prospective buyers should do before buying a home is get preapproval for a mortgage at the lowest rate possible. Third Federal offers free preapproval to make the process easier and more seamless.

Rate locks are one of the most important factors for buyers to consider when shopping for a construction loan, because if a home is not completed before the rate lock expires, a buyer can be charged the prevailing interest rate. Third Federal offers two of the longest rate locks available: 12 months on a construction/permanent loan and eight months on an end loan. A construction/permanent loan offers homebuyers the opportunity to apply for one loan, lock in one rate and be assured of the necessary time to build a home before they start paying principal and interest. The end loan works when builders want to be paid in total at the end of construction. At Third Federal, homebuyers can get up to a 240-day (eight-month) rate lock when they apply. In this case, homebuyers wouldn't start paying the mortgage until they sign off on the completed home and close the loan.

As more new-home buyers move into the luxury-home market, it's important to look for the lowest rates and costs on jumbo loans. Third Federal prices jumbo loans just 1/8 percent above regular low rates, with all other costs and fees the same.

Another smart option for homebuyers who are upgrading to a nicer home is the bridge loan. A bridge loan allows buyers to borrow against the equity in their current home and can be used as the down payment for their new home. Not only that, the funds borrowed for the bridge loan will not affect the underwriting decision on the buyers' new home. And they can apply for the bridge loan at the same time they apply for the new-home loan, even though they won't need to draw on the funds until they are ready to close on the new home.

Third Federal will let buyers borrow up to 85 percent of a current home's equity, less any mortgages. For example, if the home's value is $100,000, 85 percent of that amount would be $85,000. If the mortgage were $35,000, you'd subtract that amount from the $85,000, so $50,000 would be available for a bridge loan.

The Third Federal bridge loan has a rate that can be locked in at the time of application, and it also doesn't require any loan payments for a year or until the previous home is sold, whichever comes first.

A leading provider of savings and mortgage products, Third Federal has 27 branches and eight lending offices in Ohio and 14 branches in Florida.

Third Federal offers "Building a Home" seminars for customers planning to construct new homes. For those interested in talking to a professional face-to-face, there are two upcoming seminars, both in conjunction with the North Coast BIA Parade of Homes "The Dream" Tour 2004. The first is on Saturday, May 8, from 11 a.m. to 12:15 p.m., The second is on Wednesday, May 19, from 6:30 to 8:45 p.m. Both will be at the Lorain County Metro Parks Carlisle Visitor Center, 12882 Diagonal Road in LaGrange. To register for one of these free seminars, call 1-888-844-7333.

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