How long does it take to obtain a loan approval?

Depending on your credit history, the loan program you select and the income information you provide, we are able to provide you with a pre-approval at the time of application. Once the appraisal has been done and the loan officer has received all the necessary documentation, he requested from you a final approval can be obtained. The average number of days from application to approval vary from file to file. The application process can normally take from 1 to 2 weeks.

How much money do I need in hand to buy a house?

Usually, the purchase of a house requires a minimum down payment of 3% to 5%, plus the funds to cover the closing costs, prepaids, escrow, and two payments in reserve (2 months of escrows). In certain situations, closing costs, prepaids, and reserves can be a gift or loan from a relative. With VA loans, veterans may not be required to put any money down when purchasing a home. Veterans are still required to pay for their closing costs, which includes a VA funding fee, and prepaid items. Please give us a call for specific down payment requirements and program guidelines.

What is “APR” and why is it different from my interest rate?

Your interest rate is used to calculate your monthly payments. The APR (Annual Percentage Rate) is the total yearly cost of a mortgage, which includes the base interest rate, mortgage insurance, loan origination fees and other expenses such as property taxes, and stated as the percentage of the loan amount.

What is the difference between pre-approval and pre-qualification?

The pre-approval process is much more complete than a pre-qualification.

Prequalification is a relatively simple step, it gives everyone involved--especially you--a clear sense of how much house you can afford. The pre-qualification process gives you an estimated maximum mortgage amount for which you could qualify based on your stated income, debts and estimated down payment. Typically there is no cost or commitment on behalf of either party for a prequalification analysis. No credit report is required.

The pre-approval process typically results in a written loan decision following a complete mortgage application. Pre-qualification information is verified, and a credit report and underwritting approval are required.

It is important to remember that the amount of mortgage you will qualify for is the maximum . It is the amount that the lender feels you can afford , but it is not necessarily the amount that you want to pay . A pre-approval can add to your negotiating strength when you are ready to make an offer on a home. It let's the seller know that you are a serious buyer and capable of securing a mortgage loan.

When does it make sense to refinance?

Most people refinance to save money, either by obtaining a lower interest rate or by reducing the term of the loan. Refinancing is also a way to convert an adjustable loan to a fixed loan or to consolidate debts. The decision to refinance may not be easy, since there are several reasons to refinance. However, if you are looking to save money, try the following calculation to see if refinancing is a good option for you:

1. Calculate the total cost of the refinance
2. Calculate the monthly savings
3. Divide the total cost of the refinance by the monthly savings. This is the “break even” time. If you own the house longer than this, you will save money by refinancing.

Give us a call to help you determine if refinancing would be a good option for you.