Even though Financial Literacy Month has come and gone, it’s never too late to discuss financial management. Black Enterprise sat down with OneUnited Bank President Teri Williams to talk about her book, her thoughts on how to teach children financial literacy, and the importance of the bank’s UNITY Visa Card. Here’s the third, and final, installment of that interview, where we discuss the bank’s homeownership program.
BE: What is the Waive Home Loan Program?
WILLIAMS: The Waive Home Loan Program is a program where we are waiving our home loan fees. In order to get a loan, there are all these fees: an appraisal fee, a credit report fee, a loan origination fee. There are all these fees that lenders charge, and that we have previously charged, that we believe are getting in the way of people refinancing or buying a home. We wanted to make it more affordable for people to refinance or buy a home by waiving all of our home loan fees, so that there isn’t that hurdle. So you can apply for the loan without any cost. You can go all the way up to the closing of the loan without paying any fees.
BE: Who is eligible?
WILLIAMS: The program is for single-family homes, and we offer the program in the three cities that we serve, which are Boston, Miami, and Los Angeles. For all who qualify, the program is available to them.
BE: In general, what are lenders looking for when a home buyer is applying for a mortgage?
WILLIAMS: There are three areas banks look at in terms of approving a home loan. One is that they look at your credit and your credit score. This will tell them whether you’re likely to pay your mortgage on time. They also look at your debt-to-income ratio, which measures how much you owe compared to how much you make. The idea is to ensure that the home loan is affordable to the consumer after he or she takes out the loan. Then they look at the value of the property in comparison to the loan amount, which is called loan-to-value. What they want is for the loan not to be greater than the value of the home. There are programs that we offer where you can borrow as much as 95% to 97% of the value of the home. So you would only have to put down between 3% and 5%. Most homes are requiring about 20% for a down payment, but we go as low as only requiring 3% to 5%.