When buying a home, protect your interests by understanding the difference between a land contract and a mortgage.

A mortgage and a land contract have some things in common. They’re both ways to purchase a home. They both require monthly payments. But a land contract comes with risks you avoid with a mortgage.

How land contracts work

Under a land contract the seller essentially becomes a lender. The buyer and seller agree to the price, terms and payment schedule.

Many deals are structured with monthly payments for a period and a balloon payment in the future. When the balloon payment is due, buyers frequently obtain a mortgage to fulfill their end of the bargain.

Risks with land contracts

A land contract can seem like a sensible path to home ownership. However, you don’t own the property until the final payment is made.

If at any point the buyer fails to meet their payment obligations, the deal is off. The property remains with the seller. The buyer has no equity.

Another risk lies in the fact that the seller is the legal owner until the contract is paid in full. If the seller has financial difficulties, they could lose the property and the buyer would be left empty-handed. Any improvements the buyer invested in would be lost as well.

When you have a mortgage, you have legal standing as a property owner—as long as you pay property taxes, avoid liens and honor your obligations with the lender (like paying on time, maintaining escrow and insuring the property).

Our mortgages make home ownership accessible

Some folks turn to land contracts because they don’t think they can get a traditional mortgage. At Consumers, our loan officers work with you to create a custom-made mortgage option within your financial terms.

To find out more about any of our home loans, just ask! Call us at 800-991-2221 and we’ll do everything possible to get you into the home you want.

Consumers helps more than 1,000 members finance land, homes and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!

When you understand how mortgage escrow works, you see why it makes sense for you and your lender.

Many home buyers are surprised to find that their monthly house payment is more than the payment calculated to pay back their loan. That’s because lenders often require buyers to put money into escrow.

The easiest way to understand escrow is to think of it as a monthly budget plan so that you won’t fall short of funds when your tax, PMI* and insurance bills are due.

Money in mortgage escrow is set aside with a third party. It can only be used to pay for property taxes, PMI and homeowners insurance. Escrow is added to your monthly payment for principal and interest.

How escrow is calculated

When you close on your mortgage, the lender looks at the estimated annual cost of your property taxes, PMI and homeowners insurance. The amounts are added together, then divided by 12 to figure your monthly escrow cost.

For example, if the premium for your homeowners insurance is $1,000, your PMI is $960 and your property taxes are $2,800 for the year, they total $4,760. Divide $4,760 by 12 and you arrive at $396.67. This amount will be added to your mortgage payment for escrow.

Advantages of escrow

Many borrowers find it easier to save one-twelfth of their property taxes and insurance each month than to come up with large sums when the bills come due.

When the bills are issued, a copy goes to your lender and payment is sent directly from your escrow account. This gives you the assurance of knowing that your insurance coverage won’t lapse and you won’t incur penalties for late payments on property taxes.

Lenders like escrow because it means the homes they finance are insured and remain up-to-date on taxes, which lowers their risk.

We’re here to help

If you have any questions about mortgages—including escrow payments—just ask! Call us at 800-991-2221, and we’ll provide the answers you need.

Consumers helps more than 1,000 members finance land, homes, and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!

*PMI = private mortgage insurance, if applicable

These five design trends might just be what your home needs for a fresh look and feel.

Trend #1: Navy blue is the new black

Navy blue is just as versatile as a pair of blue jeans. Design firm Boca Do Lobo

says this shade can be used as both a neutral or an accent. Take a look at how timeless navy blue can take the place of black here.

Trend #2: Sofas with something to say

Real Simple says to capitalize on the biggest piece of furniture in your living room. Make a strong statement with “heavily tufted sofas that make their presence known.” Go for colors that pop, like emerald green or deep periwinkle.

Trend #3: Lighting with an artisan touch

Shelves at home improvement stores are packed with millions of look-alike light fixtures. One trend among designers is to choose fixtures from local artisans. It’s a personalized touch in a high-tech world.

Trend #4: Décor influenced by desire for wellness

Making home a comfy and cozy place you never want to leave has been trending for several years. Now, folks are bringing in design elements from their favorite resorts, spas and yoga studios. You’ll see it reflected in breezy rattan furniture, indoor potted plants and crystals.

Trend #5: Two-tone kitchen cabinets

There’s no reason all the cabinets in your kitchen have to be the same! A growing trend is to incorporate different styles for upper and lower cabinets. For example, a combination of bleached wood and vibrant paint is fresh and feels exceptionally personal.

Consumers helps more than 1,000 members finance land, homes and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!

Closely review your monthly expenses, painlessly cut out what’s not necessary, then pay the savings to yourself so you have cash when you need it.

The things that make our homes wonderful places to live sometimes create our biggest headaches. An appliance breaks down. The roof leaks. A faucet won’t stop dripping. When these problems arise, it can create a budget headache, too. Smart homeowners set aside an emergency fund to cover such incidents. Even if you feel like you don’t have extra cash to set aside, here’s a two-step plan to save for emergency repairs without feeling deprived.

Step 1: Review your recurring expenses

An unused subscription may seem like an insignificant cost but when you multiply it by 12 months, it adds up! Take a look at the all the expenses you pay each month. Chances are many can be reduced or eliminated altogether. Here are seven areas to review:

• Cell phone and mobile device service — Wireless carriers don’t always promote their best deals to existing customers. Talk to your provider to see if they have a better deal on data and calling than the one you have. Consider switching providers for a better deal.

• All insurance (health, auto, renters, homeowners) — When it’s time to renew your policy, shop around. You could be pleasantly surprised with hundreds of dollars in savings. Also, consider a higher deductible for lower monthly payments. Our friends at Nulty Insurance offer discounts for Consumers members.

• Product subscription services — The cost of product subscriptions adds up. Does the value you get justify the monthly expense for that wine or coffee, or those beauty and shaving products? If not, cancel the subscription.
  

• Landlines and cable — If you live in a place with reliable cell service, determine if you really need a landline. And with TV and movie streaming, do you really need cable?

• Subscriptions— It’s easy to hit “renew” on subscriptions for software and magazines. The same goes for newspapers. If you can find free alternatives, cut off the cash flowing to these services.

• Memberships — Have you used that gym membership since you signed up in January? Are you paying dues to professional associations that you’re no longer involved in? Cancel memberships that you don’t use.

• Avoid annual fees on credit cards — Annual fees on many credit cards start at $35 and go up to almost $200. Switch to a card with no annual fees (like the cards from Consumers).

Step 2: Bank the savings

It’s not enough to cut or eliminate expenses. The money saved needs to be set aside in your emergency fund. Instead of paying service providers, pay yourself the amount you used to pay them. This is a simple way to save money without feeling deprived.

It’s fun to watch the balance grow larger each month! And, it’s comforting to know that when you need emergency repairs, you’ve got money on had to cover it without busting your budget.

If you find yourself without an emergency fund, or with a repair that requires more cash than you have on hand, a home equity line of credit (HELOC) is an option many Consumers members use. If you’d like to set up a savings account for emergency home repairs or apply for a HELOC, stop by one of our offices or call us at 800-991-2221.

Consumers helps more than 1,000 members finance land, homes and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!

HOAs protect property values and provide amenities, but they’re not for everyone. Only you can decide if one is right for you.

How do you feel about homeowners’ associations (HOAs)?

1. I love HOAs; they protect my property value and quality of life.
2. I hate them! Too many rules, and they cost too much.
3. I’m not sure what an HOA is.

Living in a community with an HOA is a delight for many and a frustration for others. If you’ve never been part of an HOA, this article will help you get up to speed on how they work.

The pros of HOAs

Many homebuyers like the assurances that come with being part of a homeowners’ association, because they are designed to maintain property values and quality of life.

Common elements managed by an HOA can be as simple as roads, parking areas and lawns, or as elaborate as pools, trails and clubhouses.

Each homeowner pays monthly or annual dues to maintain the common elements and cover liability insurance.

The cons of HOAs

HOA bylaws govern many homeowner decisions and behaviors. Typically, any exterior changes to a home have to be approved. Regulations on parking, renting and activities like bird feeding can affect how you use your home. Pretty much anything your neighbors can see or hear may be subject to HOA rules.

You can’t opt out. As a member of the HOA, you are bound to follow the rules. If you don’t, the HOA can impose fines. In some cases, unpaid fines can result in legal action, including liens and foreclosures.

Know the bylaws

Before you buy a home with an HOA, request a copy of the bylaws, CCRs (covenants, conditions and restrictions), and any other rules the association has in place. Read all documents from beginning to end. Then decide if you wish to abide by them. If they seem overly restrictive, look for a home in a different neighborhood.

Be prepared for changes in dues

Dues are subject to change depending on the age of common elements, lawsuits and insurance claims. Ask a board member if the HOA is planning an increase in dues and how much money is in reserve. Factor the answers into your budgeting.

Ask residents about their experience

Talk to residents to get an idea of what it’s like to live there. Ask if rules are enforced with an even hand. Inquire if the board functions well. Find out if a property manager is involved in the daily operation of the community.

The best time to learn about an HOA is before you buy. Reading the documents and talking to board members and residents will give you solid information to base your decision on.

Consumers helps more than 1,000 members finance land, homes and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!

7 tips for peace of mind while you’re on summer vacation.

Before you pack your bags and hit the road, take these seven precautions to keep your home safe while you’re on vacation.

Ask someone to check

Enlist a neighbor or friend to keep an eye on your home while you’re gone. If that’s not possible, see if your local police department offers vacation home checks.

Hold your mail

Piled up mail is an obvious sign that no one is home. The solution? Have the post office hold your mail. It’s easy to request a hold online. You just fill out the form with the dates you’ll be gone. On the day you choose, the post office will deliver all your mail and resume regular service.

Stagger timers

Lights that turn on and off create an illusion that someone is in the house. Set your timers so they reflect natural patterns. For example, when the lights downstairs turn off in the evening, turn on the lights in an upstairs bedroom. Reverse the timing for the morning.

Put a timer on your TV to create flickering light and noise, just like when someone is home. You could also put a radio on a timer for intermittent noise.

Unplug where possible

Save energy by unplugging any appliances that draw energy even while they’re turned off. This includes TVs, computers and chargers. This will also protect them from power surges in case there’s a storm.

Turn off the water heater or set it to “vacation” mode.

Mind your curtains

Keep curtains positioned as they usually are when you are home. If it’s not your habit to keep curtains continuously closed, it’s a sure sign that you’re not home. Make sure valuable items are not in view from windows.

Keep the lawn mowed

Don’t let an overgrown lawn tip off burglars that you’re not home. Ask a neighbor to mow for you while you’re gone and offer to do the same for them when they go away. Or, hire a service.

Be smart on social media

Be cautious about sharing vacation plans and your location on Facebook and Twitter. Thieves can use this information to target your home while you’re gone. Share pics and vacation stories online after you return.

Wherever you go this summer, take peace of mind along by keeping your home safe while you’re gone.

Consumers helps more than 1,000 members finance land, homes and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!

Jennifer has lived and breathed mortgages for the past 30+ years, working at all levels in the industry from mortgage department supervisor, underwriter and processor to her current role as a mortgage loan officer.

“My goal is to help as many families as possible obtain their goal of owning a home,” Jennifer says. “I love helping them realize their dreams!”

Jennifer recently returned to working in the South Haven after having spent the last year in St. Joseph.

“I love living in the country and working in South Haven!” she adds.

Jennifer and her husband live on a 41-acree Christmas tree farm and have two adult kids. She is a 4-H volunteer and works with South Haven Chamber’s Ambassador Group.

Jennifer serves Consumers’ South Haven office.

To speak with Jennifer, request a free consultation here.

Save time and money by maintaining these five things around your house.

If you could save hundreds of dollars on home repairs with the investment of a few minutes of time, would you do it? Here are five commonly overlooked maintenance tasks that lower your costs for energy, repairs and replacements.

Change the HVAC filter

The more your run your AC, the more dust, particles, pet dander and pollen your HVAC filter traps. Check the filter at least once a month and change when necessary.

The payoff: Better airflow allows the system to run more efficiently and means you’ll cut energy costs and extend the life of the system.

Test your sump pump

This one is so easy! Visually check if anything is blocking the float that switches the pump on. Pour in a bucket or two of water to ensure that the pump is working.

The payoff: Regular sump pump checks can detect problems before they turn into costly flooding.

Clean refrigerator coils

The coils on your refrigerator are designed to release heat. If they’re covered in dirt, dust and pet hair, they can’t do their job and the compressor will have to work harder. A $6 coil-cleaning brush and vacuum cleaner are all you need for this job. If you don’t know how to do it, here’s a quick tutorial.

The payoff: Clean coils will lower electricity costs and extend the life of your fridge.

Clear your gutters

Often, we think of fall as the only time to clean gutters, but spring can throw a lot of debris on the roof, too. (“Helicopter” maple seeds, we’re talking about you!) Now’s the time to clear out gutters and drains to make sure water is moving away from your house.

The payoff: Your foundation stays drier and your sump pump won’t run as much that saves money.

Give your water heater a little TLC

Flushing your hot water heater removes sediment that builds up in the tank and interferes with heating. Here’s a step-by-step how-to and a video. According to the Rheem water heater company, you only have to drain three to five gallons to flush the tank.

The payoff: Faster heating of the water and longer life for your hot water heater.

Many homeowners can easily tackle these tasks, however, if you can’t do them safely, call a professional.

Consumers helps more than 1,000 members finance land, homes and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!

Commonsense, local underwriting is the foundation for sound home lending that helps borrowers and the economy.

A member recently wondered: Are zero-down home loans offered by Consumers repeating a pattern of lax lending rules that contributed to the economic crash of 2008? In a word, no. Our 0% Down Mortgage solution differs greatly from the lending excesses that led to the financial crash 10 years ago. Here are five reasons Consumers’ home loans are financially sound.

1. Local people make the decisions

Unlike the bad mortgages other lenders offered in the past, Consumers relies on highly-trained loan underwriters—who are on staff and in tune with our local real estate market—to evaluate loan requests. In the years leading up to the crash, most analysis was done by computer models and automated processes with very little human analysis.

2. Income is documented

At Consumers we require strict income documentation evidenced over a period of time. This is in contrast to taking the borrower’s word for their income, known as a “stated income loan”, which was very common among many lenders.

3. Commonsense review of credit behavior

Members who receive a 0% Down home loan must have good credit. This is demonstrated by an acceptable FICO score, plus a commonsense review of their credit behavior.

Consumers does not rely on a computer model of credit to determine an acceptable risk. An individual underwriter reviews credit patterns and payment history for each applicant.

4. Review of rental history

First-time borrowers must have a documented, acceptable rental history. This obligation closely resembles a mortgage payment. We look closely at large increases in rent payments versus the proposed mortgage payment to make sure borrowers are not overextended.

5. Consumers accepts 100% risk

Finally, but most importantly, Consumers retains 100% of the risk on our 0% Down mortgages. These loans are funded with credit union deposits and remain on the balance sheet until the loan is paid off.

Virtually all loans made before the crash were “securitized”, or sold by the originating lender in exchange for a large payment by entities on Wall Street that then transferred the loan to investors in the U.S. and internationally. The originating lender had zero risk in the transaction and no relationship was established outside of the single loan closing.

In short, our 0% Down program is a far superior product than what existed in 2008, and our strict processes allow us to serve many more members in a responsible and sustainable fashion.

Need a mortgage?

Our mortgage loan officers love working with all home buyers ­– including those who want a 0% Down mortgage to keep upfront expenses low. Give us a call at 800-991-2221 or send an email. We’re here to help you get the home of your dreams!

Consumers helps more than 1,000 members finance land, homes and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!

All loans subject to approval. Rates, terms, and conditions are subject to change and may vary based on credit worthiness, qualifications, and collateral conditions.