VIENNA, Va. Navy Federal Credit Union said its mortgage originations are at an all-time high despite difficulties in some of the housing markets it serves, as it booked nearly $8 billion in loan production through the month of July.
The credit union said it makes $2,500 available to members to help with closing costs on purchases, and the loans allow up to 6% of the purchase price to come from the seller.
Many of the credit union’s members the U.S. Armed Forces and their families live in geographic areas where home prices are on the rise. To combat higher prices, Navy Federal said it is lowering its interest rate on jumbo mortgages. The CU said its new rate (as low as 4.125%) on a jumbo 30-year fixed mortgage will save a member looking to purchase a $700,000 home $1,236 annually compared to the previous interest rate of 4.375%.
“Rising home prices, especially in our core markets, are making it more difficult for creditworthy homebuyers,” said Katie Miller, vice president of mortgage products at Navy Federal. “We are responding to our members’ needs by keeping our jumbos in line with our conforming mortgage rates.”
“Price appreciation has been significant in many markets, and several factors are at play,” said Alan MacEachin, the credit union’s corporate economist. “The supply of homes on the market remains tight while demand continues to grow. The economy continues to improve, the jobs market is strengthening, and mortgage rates, while off their record lows, remain attractive by historical standards. Down the road however, potential changes such as a reduced federal government role in housing finance and the eventual dissolution of Fannie Mae and Freddie Mac, could increase home loan borrowing costs.”
