FAQs

Escrow is required on all loans over 90% loan-to-value (LTV). If your loan has sufficient equity below 90% LTV you can choose to close your escrow account any time (we’ll need to verify the LTV first). The only exception is if your property has flood insurance, which does require an escrow account. Otherwise it’s up to each member if they want the convenience of having us collect and pay their property taxes and insurance, or if they prefer to manage those themselves.

If you believe you have enough equity in your home to eliminate the need for an impound account, you can contact Loan Administration to initiate a review process.

Loan Administration message line: 650.842.6115

Email: [email protected] (do not email any confidential information like account numbers)

You can also get an instant Custom Rate Quote for your specific purchase, refinance, investment or home equity need! Our Rate Quote includes details such as fees and monthly payments.

Need financial advice? Buying a home is one of the most important financial commitments you’ll ever make. Getting your loan from someone you trust is equally important. Stanford FCU has over 100 years of combined real estate lending knowledge and experience. Our in-house home loan experts are among the best in the industry. So, whatever your situation, chances are we’ve helped someone with a very similar situation before.

Contact a Mortgage Consultants or apply online with no obligation to get started today!

All loans have two parts: The “principal”, which is the amount of money that you’re borrowing, and the “interest”, which is the amount of money charged by the lender. Interest-only loans are most commonly used for mortgages. For example, if you borrow $400,000 at a rate of 6% for 30 years, your monthly interest payment would be $1,919.50 and your monthly principal payment would be $478.70. Mortgage payments are normally principal plus interest; in this case $2,398.20.

An interest-only loan allows you to make monthly payments of only the interest for a specific period of time without the principal (although you can always make extra principal payments). The advantage of an interest-only loan is a lower payment. The disadvantage is your loan amount will not go down with each payment, since the principal amount remains unpaid.

Once the interest-only payments end, you will have higher payments for the interest plus principal. You can also refinance the loan or pay it off in full. However, since home prices fluctuate there is a risk that you might owe more on your loan than your house is worth.

Many people with higher income prefer the lower payments because they can use the money that they would normally pay toward principal for investments or other purposes. People with fluctuating income also like interest-only loans because they can make the interest-only payment when they’re short of funds, and pay down the principal when they have more money like a bonus or commission payment.

Interest-only mortgages are not for everyone, so you should carefully consider if it’s right for you. Contact a mortgage expert to determine the right mortgage for your specific needs.

We do not charge pre-payment penalties on any of our home loans, because we’re a not-for-profit credit union owned by our members!

We encourage you to speak with a Mortgage Consultants about your specific needs.

Check out all our great online tools!

• Details about our mortgage loan options
• Educational resources
• Sample mortgage rates
• Custom Rate Quote (including monthly payments and fees)
• Choose an experienced Mortgage Consultants to answer your questions
• Apply now!

The specific amount of your closing costs will vary. Appraisal fees, title charges, and closing fees all vary from state to state, and may be based on the home’s value or loan amount. To assist you in evaluating the fees associated with a home loan, we’ve grouped them into two categories. Note that Stanford FCU doesn’t charge all of the fees listed:

Third-Party Fees

• Appraisal fee
• Credit report fee
• Settlement / closing fee
• Survey fee
• Tax service fee
• Title insurance fee
• Flood certification fee
• Courier / mailing fees
• State / County local taxes
• County Recording fees

We collect any third-party fees from the borrower, and pass them on to the person who actually performed the service. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee, and a title company or an attorney is paid the title insurance fees.

Typically, you’ll see some minor variances in third-party fees from lender to lender, since a lender may have negotiated a special charge from a provider they use often or choose a provider that offers nationwide coverage at a flat rate. You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee, or courier/mailing fees.

Lender Fees

• Origination fee / Points
• Document preparation fees
• Loan processing fees

Fees such as discount points, document preparation fees, and loan processing fees are retained by the lender and are used to provide you with the lowest rates possible. This is the category of fees that you should compare very closely from lender to lender before making a decision.

Required Advances

You may be asked to prepay some items at closing that will actually be due in the future. These fees are sometimes referred to as prepaid items.

One of the most common required advances is called “per diem interest” or “interest due at closing.” All of our mortgages have payment due dates of the 1st of the month. If your loan is closed on any day other than the first of the month, you’ll pay interest, from the date of closing through the end of the month, at closing. For example, if the loan is closed on June 15, we’ll collect interest from June 15 through June 30 at closing. This also means that you won’t make your first mortgage payment until August 1. This type of charge should not vary from lender to lender, and does not need to be considered when comparing lenders. All lenders will charge you interest beginning on the day the loan funds are disbursed. It is simply a matter of when it will be collected.

If an escrow or impound account will be established, you will make an initial deposit into the escrow account at closing so that sufficient funds are available to pay the bills when they become due.

If your loan requires mortgage insurance, up to two months of the mortgage insurance will be collected at closing. Whether or not you must purchase mortgage insurance depends on the size of the down payment you make.

If your loan is a purchase, you’ll also need to pay for your first year’s homeowner’s insurance premium prior to closing. We consider this to be a required advance.

Stanford FCU’s fees are typically much lower than those charged by banks and other lenders because we are not-for-profit and owned by our members.

Check our rates, apply online or contact one of our Mortgage Consultants to get started with your Stanford FCU loan today!

At Stanford Federal Credit Union, we offer purchase loan programs with as little as a 3% down payment (maximum loan amounts apply) depending on your individual financial needs. You’ll also want to consider additional funds needed for closing costs, as well as any lender reserve requirements. Example: If you’re purchasing a $700,000 home, you would need $21,000 for a 3% down payment.

Getting your funds together for a down payment is probably the biggest hurdle for many first-time home buyers. You may already be worth more than you realize. When calculating your available assets, be sure to consider ALL of the following sources:

• All checking and savings accounts
• Stocks, bonds, brokerage, and retirement accounts
• 401K loan (if offered by your current employer)
• Gift options from immediate family members

What if it doesn’t add up to the right amount? Don’t give up hope. There are ways to make it work:

1. Look for a loan option that requires a smaller down payment
2. Consider getting a loan with Private Mortgage Insurance (PMI)
   • Allows for a lower down payment
   • Lenders (like us!) like it because it protects us in case you default on the loan
   • You can pay for it on a monthly basis
   • You can request to have it cancelled once you reach 20% equity
3. Talk to one of our Mortgage Consultants for other available loan options like our 80/10/10 to avoid paying mortgage insurance (MI) - CA only.

Gifts from immediate family members are also an acceptable source of down payment. We’ll ask you for the contact information of the gift giver, as well as the donor’s relationship to you. Prior to closing your loan, we’ll verify receipt and deposit of the gift funds.

If you’ll be withdrawing funds from a 401(K) or retirement account to fund your down payment, we’ll probably ask you to show evidence that you have the funds available by providing a recent statement. We may also need to verify whether or not repayment is required. If repayment is required, it’s not a problem. We’ll just consider that monthly payment when making your loan decision.

Apply online or contact one of our Mortgage Consultants to get started with your Stanford FCU loan today!

The HMDA data about our residential mortgage lending are available online for review. The data show geographic distribution of loans and applications; ethnicity, race, sex, age, and income of applicants and borrowers; and information about loan approvals and denials. These data are available online at the Consumer Financial Protection Bureau’s Web site, HMDA data for many other financial institutions are also available at this Web site. 

Yes. Homeowner’s Insurance covers fire, theft, certain natural disasters and personal liability (if someone is injured on your property). It protects you and us against the loss of the property that secures your mortgage. You’ll need to show that you have adequate homeowners coverage as a condition of obtaining a mortgage:

• Mailing address: Stanford FCU, PO Box 10690, Palo Alto, CA 94303
• 24/7 Contact Center: 650.723.2509 (local) or 888.723.7328 (toll free)
• Loan Administration message line: 650.842.6115
• Email: [email protected] (do not email any confidential information like account numbers)
• Secure Message: You can upload the information through secure Message in Digital Banking.