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Understanding Mortgage Loans – Making the Right Investment For Your Family

Del Norte Credit Union is dedicated and determined to help families and individuals around New Mexico find the right mortgage loan based on unbiased advice. Owning a home is an investment that gives you the freedom to express yourself and an opportunity to put down roots. But if you need to take out a home loan, you need to understand the basics.

Let our experts help you make your mortgage dreams a reality with one of our many options for mortgage financing in Española, Los Alamos, White Rock, Santa Fe and New Mexico. We proudly offer the following:

New Home Loans

Buying a new home can certainly seem intimidating, but don’t let fear of the unknown keep you from reaching your goal of home ownership. Our mortgage loan experts will guide you every step of the way. Let Del Norte Credit Union make your loan process straightforward and easy to understand.

Refinancing Loans

The benefits of refinancing your mortgage can be a tremendous help to your family. By refinancing, you can lower your monthly payment and put more money back in your budget. Our experts will walk you through the process and determine if refinancing is the right option for you. Your home is an investment, so it’s important to get the most out of it.

Home Improvement Loans

Is it time to make those home upgrades you’ve been dreaming of? Perhaps you want to remodel that kitchen or bathroom, or maybe you are ready to make the jump to solar power. Regardless of the project, our home loan experts can match your needs with the right loan solution.

We have mortgage experts in your neighborhood!

New to home loans? When you want to buy a home in New Mexico, we have resources and tools to help you make the decision. Learn more here.

Buying your first home can be an intimidating and expensive process. Understanding all of the requirements is crucial, especially when it comes to mortgage loans and avoiding costly mistakes. We’re here to help you better understand the process and feel confident when investing in your home.

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What Goes into Qualifying You for a Home Loan

Stable Home

Your employment and job history are important factors in showing your ability to repay the mortgage loan. Mortgage lenders will verify your employment status before moving forward with other parts of the process. If you’re self-employed, additional paperwork regarding your business may be required. Generally, what lenders look for is stable work history.

At DNCU, we’ll lead you through these initial steps to ensure you’re on track. If you have any questions or concerns while filling out the application online, give us a call or visit our Santa Fe mortgage center for help.

Good Credit Score

Your credit score also determines your eligibility for a home loan. Maintaining a good credit score improves your eligibility for the most favorable mortgage rates. If you have a low or moderately low credit score that falls below what we require, we can suggest ways to help you improve your score.


You’re in a better position if you apply for a loan with a down payment in hand. One of the requirements that we look into when it comes to mortgage loans in the Santa Fe area is your LTV (loan-to-value) ratio. The more favorable the ratio, the more eligible you become.

What can I Afford?

All it takes to figure out how much house you can afford is some quick number crunching, and you’re on your way. Factor in your income, existing debts, down payment and other purchase price and payments that make sense for your budget. If you’re having trouble calculating how much you can afford, we’re here to help! Get in contact with us by calling or visiting our location.

Why You Would Want a Refi Loan?

Refinancing provides you with the opportunity to take out a new loan and pay off your current mortgage. These loans are secured against your home, have lower rates, offer longer loan terms, and allow you to borrow more than you can with a personal loan. At Del Norte Credit Union, we offer varied home refinancing loan options right for your needs. Reasons to refinance:

  • Change your type of loan
  • Lower your mortgage rate and payment
  • Convert to a shorter-term loan
  • Remove Private Mortgage Insurance

Budgeting for Repairs and Taxes

When buying a home in New Mexico, you may worry about getting a favorable mortgage, the down payment, and/or how to avoid private mortgage insurance. You may also start worrying about home repair costs, renovation costs, and insurance pricing in your budget. So, be sure not to tap yourself out by spending the maximum early on. Budgeting for repairs will depend on the age, size, and condition of the house. And when you’re on the hook and need financing, you can rely on DNCU for a loan that will help you settle the repairs and taxes.

Contact us to learn more about our real estate loans.

What’s a Mortgage Loan?

A mortgage is a loan used to finance the purchase of a house, and this means that you buy a property without paying the entire value up front. The loan is secured on the house you buy, and the lender can foreclose if you default on paying the mortgage. Regular payments are made toward the interest and principal over a set term. Also, a mortgage can be refinanced by taking out a new loan and paying off the original one.

Mortgage Loan Term: This is the period you have to repay your loan. Generally, loans with shorter terms have higher monthly payments and lower interest costs than loans with longer terms. Mortgages typically come in terms of 10, 15, 20, or 30 years.

Interest Rate Type: There are two basic types of interest rates; fixed and adjustable. These give rise to three different types of loans:

  • Fixed-Rate Mortgage: This loan has a set rate of interest that remains constant throughout the life of the loan, protecting homebuyers from interest rate fluctuations. Fixed-rate mortgages enable buyers to make smaller, predictable payments over an extended period.
  • Adjustable-Rate Mortgage (ARM): Also referred to as a Variable-Rate Mortgage, an ARM has an interest rate that fluctuates based on the market condition. An increase in interest rates, for instance, will result in higher monthly payments. Variable-rate mortgages have lower initial interest rates and are much more flexible.
  • Hybrid ARM: This loan has the characteristics of both adjustable-rate and fixed-rate. It starts off with an initial period of fixed interest rate after which it switches over to an adjustable rate. For instance, a 5/1 Hybrid ARM will have a set period of 5 years and thereafter, a change in the rate once every year.

Interview with Lisa Muñoz, DNCU Loan Officer

Types of Mortgage Loans

Mortgage loans are categorized based on whether they part of a government loan as well as the size of the loan. They include conventional, FHA, and special programs. Each type of loan is designed for different situations. At DNCU, we offer conventional loans at competitive rates.

Mortgage Insurance in New Mexico

If you can’t afford a 20 percent down payment, private mortgage insurance (PMI) may help you become eligible but will add to your costs. To learn more and get a mortgage loan in New Mexico, contact Del Norte Credit Union for a consultation.