Archive for jerry litwaitis

Meet Jerry Litwaitis!

Jerry was born in St. Claire, Michigan, and moved to Park Falls, Wisconsin when he was 4 years-old. He graduated from UW-Eau Claire with a Bachelors of Business Administration with a Comprehensive Finance Degree in April 1992. He then moved to Marshfield and has worked at MMCCU since April of 1992.

Jerry enjoys working with the members and getting to know them on a personal level. Jerry enjoys fishing, hunting and being in the outdoors.  He is also a huge sports fan. He also enjoys spending time with his wife, Crystal, and two beautiful daughters, Sierra and Sydney.

Buying And Selling a House at the Same Time

Selling and Buying a House Simultaneously

By Jerry Litwaitis, VP of Lending

What should be the first step financially that someone takes when they are ready to sell their home and buy a new one?

You should contact the credit union and set up an appointment to go over the process with me. The credit union can determine how much you will be netting from the sale of your current home.

We can determine how much you can afford to spend on your new home, how much of your sales proceeds from your current home you want to use as a down payment on your new home and then determine what program, terms and interest rate you will qualify for. You can sell your current home and buy a new home at the same time.

You will need to set up the closing on the sale of your current home prior to the closing on the purchase of your new home, this can also be done the same day (close on the sale of your current home in the morning and then close on the purchase of a new home in the afternoon).

This way, you will have your down payment funds from the sale of your current home to use on the purchase of your new home. Your credit union and real estate agent, if applicable, can help you with setting up the times and dates to accomplish this.

Can you buy a new home before you sell your old one?

This all depends on your affordability. Can you afford to have two mortgage payments until your current home sells? Even if your plan is to sell your current home as soon as possible after purchasing a new home, you still need to be able to afford both mortgage payments along with any additional debt you may have, until your current home sells. Not an easy task, but it can be done. Set up an appointment with the credit union to see if this is an option for you.

What loan options are available for people buying and selling at the same time?

If you will be selling your current home before purchasing a new home or selling and buying on the same day, a conventional or non-conventional mortgage is all that is needed on the new home. If you want to buy a new home prior to selling your current home and you need the equity in your current home to use as a down payment you will have to be able to afford two or more mortgages to tap the equity in your current home.

Example: You owe $70,000.00 on your current home and you will be selling your home for no less than $100,000.00. After real estate agent fees and closing fees, you will be netting $20,000.00 from the sale. In order to get the $20,000.00 equity in your current home, you would need to refinance your existing house for $90,000.00. $70,000.00 would be used to pay off your existing home mortgage and the $20,000.00 would be used for the down payment on your new home mortgage. This refinance of your current home is what is commonly called a “bridge loan”. Keep in mind that you will now have two mortgages to pay for until your current home sells. The $90,000.00 on your current home and the mortgage on your new home. You could also take out a second mortgage on your current home for $20,000.00 to use as the down payment for the purchase of a new home, however, you will now have three mortgages to pay for (your first mortgage on the home your are trying to sell, a second mortgage for $20,000.00 on the home you are trying to sell and a mortgage on the new home). Again, this will all be based on your affordability.

What happens to your mortgage when you sell your house and buy another?

The mortgage loan on the house that you sell is paid off with your financial institution and the lien on your house is satisfied with the county register of deeds office (a satisfaction of mortgage is prepared and recorded with the county to release the financial institution’s lien on your house). When you purchase a new home, the financial institution will file a separate mortgage with the county register of deeds office on the new property.

Contact MMCCU with any questions!

What to Know Before Buying Your First Home

Buying that first house can be a daunting task, but Marshfield Medical Center Credit Union (MMCCU) is there to help members have the best first house-buying experience possible.

“The 1st step our members should take is to contact the credit union to set up an appointment to talk about the mortgage process, options, programs, costs and interest rates,” said Jerry Litwaitis, VP of Lending. “We know the right questions to ask to determine what program will best fit our member’s needs.”

Litwaitis and the MMCCU team will work with members to complete a pre-qualification to determine their affordability based on the different terms and rates MMCCU has to offer.

“We can educate our member so that they feel confident about the mortgage lending process,” he said, adding that members do not always know what they can afford or how much money is required for a down payment.

MMCCU can determine a member’s affordability, based off their income and current debts. They can also determine what program will fit a member’s financial needs when it comes to mortgage term and type of down payment required.

“The minimum down payment percentage for a conventional fixed rate mortgage is 5% of the purchase price or appraised value, whichever is less (10% down payment for the credit union’s in-house mortgage programs),” said Litwaitis. “You will also need to have money set aside for closing costs along with reserves (which are the principal, interest, tax and insurance payment on a monthly basis).”

If a member applies and is approved for an FHA mortgage, a 3% down payment is the minimum amount. For a USDA mortgage, no down payment is required, although the applicant will need to have enough funds in their account for closing costs.

For first-time home buyers, Litwaitis said to expect a 30-year fixed rate with little or no down payment to get started.

“This will provide our member with the lowest possible monthly payment with the smallest amount of out of pocket expenses,” he explained. “Since there is no pre-payment penalty, you can make extra payments down the road to reduce the balance and term at a faster rate.”

Each member’s situation is different, so working with a professional through this process is important.

“MMCCU has the local knowledge and expertise to get you into the right mortgage program that will fit your budget,” said Litwaitis.  “We have personalized service enabling our member to deal with one person from the start of your mortgage process until the end. MMCCU has the right products, with competitive interest rates and closing costs to complete your home buying process.”

Questions a first-time home buyer be asking their financial institution:

• What type of mortgage programs do you offer?
• What are the current interest rates and annual percentage rates on those programs?
• What are the closing costs for those programs?
• How much of a mortgage payment can I afford?
• How long does the mortgage process take?
• What is private mortgage insurance and how much money do I need to put down to get out of it?
• Is there a pre-payment penalty on the mortgage programs?
• How much of a down payment is required for each of the programs explained?
• Do I even need a down payment?
• What is the difference between a closing cost and a prepaid finance charge?
• What is the difference between an interest rate and the annual percentage rate?