Home Sweet Home
Mortgage program allows members to save money when buying, selling and refinancing their homes.
Bennie Radford, a corrections officer at the Dixon Correctional Center in Dixon, Ill., thinks, “It’s great my union helped me.” He used the AFSCME Advantage Mortgage Program to buy his first house in Rockford, Ill.
The program, available to AFSCME members, their parents and their children, could make home buying, selling or refinancing easier and more affordable for many AFSCME members.
We definitely saved money. Every little bit helps,” says Radford, a member of Local 817 (Council 31). His new ranch-style home has three bedrooms, two baths, a full basement, a sun deck off the master bedroom, a one-car detached garage, and a huge backyard. “I didn’t realize how big it is until I started mowing it,” he laughs.
Radford and his wife, Nicole, realized they had outgrown their two-bedroom apartment after the birth of their son, Bennie Jr., now one year old. The house will soon accommodate another member because the family awaits “our last child” due in October, Radford says.
Mary Bustamante, a recruiter for a college in Pennsylvania, also benefited from the mortgage program when she refinanced her home in Wayne, Pa., last year.
Bustamante says she saved a few hundred dollars during the refinancing. The holder of her original mortgage, Chase Manhattan Mortgage Co., limits its fees to $100.
“I don’t know the exact amount but I’ve heard from different lending mortgage bankers that fees range from $250 to $500,” she says. The money she didn’t have to pay the bank “is now in our savings account,” Bustamante says.
“The AFSCME Advantage Program is a benefit,” she says. “If more people knew about it they would use it and save quite a bit.”
WHAT PROGRAM OFFERS. The more you use the program, the more you save. If you close your loan with the mortgage program and use the real estate program to buy or sell your home, you’ll receive $350 toward closing costs.
In addition, if you use the real estate portion of the program to sell your home, one-half of 1 percent of the sales price will be deducted from your payment to the realtor (a saving of $500 on a $100,000 home).
Call the AFSCME Advantage mortgage and real estate program toll-free (1-800-848-6466) to get referred to a real estate agent in your area and to answer questions about the type of mortgage and house you want. The call should take about five minutes.
“The information gives the real estate office the heads up on what you’re looking for,” says Donna Dean, referral coordinator at the Union Privilege Program, which offers the real estate portion of the home buying program.
“We’re affiliated with real estate offices all over the country. We have an office for every city in the United States,” Dean says.
MANY OPTIONS. Many types of mortgage loans are available to first-time buyers, including conventional (15-year and 30-year fixed-rate mortgages and adjustable rate mortgages), VA (Veterans Administration) and FHA (Federal Housing Administration) loans.
It’s wise to comparison shop with several lenders and take into account total costs, including interest rates, lenders’ fees and closing costs. The AFSCME Advantage mortgage program may or may not offer the best deal, but it could provide more convenience and flexibility.
Under the program, qualified first-time buyers may make a down payment of as little as 3 percent.
Chase Manhattan Bank is the lender that underwrites the program.
“It behooves AFSCME members when applying for a loan with Chase to tell the loan officer that you’re with AFSCME,” says Chris Babcock, affinity liaison officer at Chase’s office in Worthington, Ohio.
“Potentially union members can be bypassed,” Babcock says.
The time to apply for a mortgage is as soon as you determine you will be buying a home. Ask for a pre-approved loan, which allows you to house hunt as a “cash buyer,” giving you an advantage over other buyers.
Consider refinancing if you have a fixed-rate loan on a home and interest rates drop one-half to 2 percentage points lower than your existing loan and if you plan on staying in your home for at least another 18 months. Refinancing is a good investment, although it requires paying many of the same costs paid at the original closing.
STRIKE FUND. Available to AFSCME members who have had their mortgage for one year with the program, the Union Member Mortgage Assistance Program helps members make mortgage payments in the event of a prolonged union-sanctioned strike. It is a one-time benefit for one strike or one lock-out during the life of the mortgage.
During the first three months of the strike or lockout, the mortgage holder pays as usual. At least two weeks before the 90th day of the strike, members should call 1-800-848-6466 to speak with a counselor about the strike situation.
Then beginning with the first monthly payment due after the 90th day, the Mortgage Assistance Fund will pay one half of the monthly mortgage payment of principal and interest for up to three months. You are responsible for paying the taxes and insurance portion of your monthly payment.
If you remain on strike or are locked out for the next three months, totaling nine months altogether, the Mortgage Assistance Fund pays the entire principal and interest payment. AFSCME members never have to repay the strike money payments.
The program also offers an unemployment/disability benefit. If you or your spouse are out of work because of a layoff or disability, you can receive an interest-free loan to cover up to six months of your full mortgage payments.
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