TYSONS Va.–Pentagon Federal Credit Union has launched a Financial Education Resource Center it says provides consumers a robust, online learning experience with the latest in financial literacy tools and resources.
The resource center includes a library of financial education modules and tools, PenFed said, with the first two modules focusing on mortgages and how to prepare financially before buying a home as well as managing finances as a home owner. Additional modules will be added to the platform and focus on other areas of personal finance, according to PenFed.
“Buying a home is potentially the largest purchase a person will make in their lifetime and we want to provide our members with the resources they need to make informed decisions,” said Winston Wilkinson, PenFed executive vice president and president of Mortgage Banking. “A mortgage is a long-term relationship and at PenFed we are committed to servicing all of our loans and providing our members with the best experience.”
What Survey Showed
The credit union said findings from its recent PenFed Credit Union National Mortgage Survey show the importance of further consumer education around the mortgage process, with the survey finding 37% of adults and 52% of Millennials are looking to purchase a home in the next two years.
Additionally, 65% of homeowners didn’t shop around for a mortgage, despite most likely being the biggest purchase a person can make, Pen Fed said, noting the results also identified common misconceptions around mortgages, including:
44% believe the best mortgage is the one with the lowest rate. “The lowest rate mortgage isn’t always best, and consumers should consider additional factors including the total closing costs and the broader annual percentage rate. It’s also important to choose a company you trust and consider one that you already have accounts with since it can simplify payments.”
58% think an Adjustable Rate Mortgage (ARM) is for risk-takers. “An adjustable rate mortgage is perfect for those staying in their home for less than five years. A 5/5 ARM product has a fixed rate for the first five years and is likely to have a lower payment than a 30-year fixed-rate.”
- 48% say being pre-qualified is not the same thing as being pre-approved, but a slight majority either says it’s true (30%) or they are unsure (22%). “Being pre-qualified may give you an idea of what you can afford, but it doesn’t mean you are pre-approved for a loan, which entails a more comprehensive process and makes you a more qualified buyer.”