How to Save on Your Monthly Payments
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We met with our trusted loan officer, Mark Sicora, about why now is the best time to refinance or buy a home. Whether you want to reduce your monthly payment or get in on a great interest rate to make buying a home more affordable, we’ll update you on the rates and summarize the mortgage process. Let’s begin!
If your mortgage loan rate is 4% or higher, then you should consider refinancing and taking advantage of the historically low interest rates. A 30-year loan is around 3.5%, a 15-year loan is 2.75%, and an FHA loan is 3.375%.
Home prices overall are stabilizing, and in certain areas we’re seeing home prices increase. Remember, the low interest rates mean you can afford more of a home. If you wait and interest rates rise, you could end up spending a few hundred dollars extra each month. It’s a great opportunity to buy.
As one of the top producers for Bell Mortgage, Mark has been in the home mortgage business since 1986. Mark and his team pride themselves in a high level of customer service at every phase of the loan process, which is why we refer our customers to Mark. He summarizes the mortgage process steps:
1. Application
You can apply online, or if you prefer, stop by the Bell Mortgage office and take care of the paperwork in person. If you are short on time, you can apply over the phone.
2. Preliminary Approval
Within 3 days (usually less) you’ll be matched with the best possible financing source and mortgage product.
3. Loan Processing
As you might guess, we need paperwork completed and signed before we can go on. It's always a good idea to make copies of forms to keep for your records. Here is a summary of the forms involved:
• Good Faith Estimate of Settlement Costs - Shows you all related charges and fees for getting a mortgage.
• Truth in Lending Disclosure - This lets you know what your estimated annual percentage rate of interest (APR) will be and any other program features that apply.
• Borrowers Certification - This authorizes that all the information you provided is correct to the best of your knowledge. It also lets us finalize the process by contacting your landlord, employer, mortgage company, etc., and getting your credit report.
4. Appraisal
The appraiser will visit the property and compare its features, floor plan, lot, etc., against other similar properties in the area. We also obtain a title report (an attorney's opinion) at this time, which will tell us the legal details of the property including liens against it (i.e., another loan).
5. Final Approval
Basically, an underwriter looks over all the paperwork and loan details and agrees that it supports the preliminary approval issued in step 2. Here are a few key items they look for:
• The Property: They review the appraiser's report of the property's value.
• Total Debt Ratio: The ratio between all your sources of income against all your debts indicates whether you can afford the payments.
• Cash Reserves: After your loan settlement costs are paid, this is the amount of money left over in your bank account. You'll still need cash to live on until the next paycheck comes.
• Credit History: Looking at your past debts and payment history is a measure of how likely and able you will be to repay your loan.
• Employment History: This isn't only how much you make now, but how stable your income tends to be.
6. Closing
You're finally here. The last pile of paperwork. It's the closing agent's job to explain everything to you so that you know what you are signing. If you like, I will try to arrange to be there as well. Our closings go quite smoothly because we make sure everything is in order on our end, and we keep you educated about the process. This is when you will be expected to take care of the closing costs and the balance of your down payment.
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If you’re interested in seeing what homes are on the market, give us a call at (952) 303.4347 or email us at teamwinegarden@teamwinegarden.com. We can also get you in touch with Mark. We’d be happy to assist you.
