Money and Financing

Is it a good time to refinance? Rates seem to be very low and will they go lower?

Yes. They are extremely low now around 4% and going lower because of the instability/uncertainty in the European financial markets. If you are going for a 30-year fixed rate, it may be as good a time as any to refinance; however, compare your current rate with the new rate (your new payment vs. the current one), compare the costs to refinance and how long you plan on staying in your current home. If there is a large, enough savings by the refinance then do it.

What’s involved in getting approved for a mortgage?

Mortgage loan approval is a full-documentation process now. 2-years’ tax returns, 2 month’s bank statements, employment/income verification, full credit report and credit score. Loan approvals are taking 30 days or so for conventional and 45-days or so for FHA loans. There’s an application process upfront along with a fee. Make sure to ask for an estimate of all the lender’s fees and closing costs.

How difficult is it to get a mortgage?

Getting a mortgage is a “full documentation” process now. Payroll statements, bank statements, 2-years’ tax returns, credit report with credit score.

How do I know that I’m getting a good deal on my mortgage?

It makes sense to talk to several lenders to get their written estimates of their costs so that you can compare their differences and select the best one. It’s not just about the interest rate; there can be other costs which are greater to offset the low-interest rate being quoted. So look at the overall picture interest rate and all of the other loan-related costs and charges.

I’m a first-time buyer. Is it more difficult for me to get a mortgage because of this?

Being a first-time buyer is not really the issue. The important factors are credit score/history, employment history and verifiable income as well as assets (money in the bank). Check with your mortgage advisor to see if you are qualified. Ask them for advice on what needs to be improved so that you can easily get approved for a mortgage. I strongly advise that you get a pre-approval for a mortgage BEFORE you start your home search in earnest. This way you can shop with confidence and when you find the home, you love that you know that can afford to buy it.

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