How do I get started on a purchase or refinance?
The short answer is to go here – www.aaronlending.com and click on the Apply Now button.
If you’re buying a new home and looking to better understand the purchase process check out Where to Start?.
If you’re thinking about a refinance we’ll want to start by reviewing your current mortgage information then compare it against the programs and options available in today’s market. We’ll also want to review what it will cost to get there.
Here’s what we’ll need to know:
- What is your current mortgage loan amount (outstanding balance)?
- What is your current interest rate?
- What is your current monthly payment?
- What is the estimated value of the property?
We’ll review the current options and if we can lower your interest rate, monthly payment, the term of your loan, and/or eliminate mortgage insurance it might make sense to refinance.
Next, we’ll want to determine the “break-even” point for the refinance. That means how long it will take before the money you spend to refinance starts saving you money.
Here’s an example. If the cost of refinancing is $2,300 and you save $40 per month it will take 57.5 months to recoup the initial $2,300 expense ($2,300 / $40 = 57.5) That means if you sell the property before 57.5 months the refinance will not have saved you any money. It isn’t until after 57.5 months that you start seeing savings.
What are the Loan Estimate and Closing Disclosure?
Excellent question, read more about both here.
How long does it take to get a mortgage?
I had a high school Social Studies teacher from the UK. Whenever one of us would ask “how long is the test/quiz?” he would respond with “how long is a piece of string”?
Getting a mortgage is a little like that.
It depends on a number of factors some of which you can control some you cannot.
The first question is whether you’re looking for a new purchase or to refinance an existing loan. Those are different paths that have different requirements and will naturally differ in the time it takes to close. There are also government mandated time periods that need to be met that can affect the closing.
Buying a new home will generally take longer than refinancing an existing home. When you are buying a new home there are more variables. A buyer and a seller will be involved, this will often require some level of negotiation. There will be the need to schedule inspections and appraisals and to potentially make repairs.
There are also government mandated disclosures and associated signature requirements and wait times. After a Loan Application is submitted the lender has three business days to issue a Loan Estimate (LE). There will be a new Loan Estimate after you lock the interest rate. Before you can close on your loan the Lender is required to issue a Closing Disclosure (CD). The CD has to be delivered 4 business days before the loan can close.
If you are refinancing your home you have a mandated three day right of rescission. That means that after you sign and close on the loan you still have 3 business days to change your mind. After the 3 day rescission period expires (the 4th business day) the loan will fund.
A borrower can facilitate a quick closing by making sure all the required documents are up to date, by trying to avoid some of the biggest mistakes, and by understanding why a home closing could be delayed.
How much does it cost to get a mortgage?
What do you mean by cost?
There are out of pocket expenses, there are fees and there is the rate. All of these are costs, some are paid at close and some are financed. All of these costs will vary with every individual borrower’s specific circumstances.
As a borrower you can expect to pay:
- Prepaid interest – a per day charge for interest on the loan that will vary based on when your loan closes.
- Property taxes and insurance – you’ll need to front load your escrow account (if you choose to have one) to pay your taxes and insurance when they come due.
- Charges for 3rd party services – pest inspections for example.
- Inspection – you may want to have your home inspected. The inspection may uncover items that the appraiser isn’t looking for.
- Appraisal fee – appraisals are typically required to verify value but may not be needed in specific scenarios.
- Credit report fee
- Flood Certification
- Recording fees
- Charges paid to the lender, mortgage broker and/or their affiliates such as:
Do you need my entire bank statement?
Yes, yes we do.
We’ll start with the previous 2 months bank statements for all checking and savings accounts (all pages including blanks). Having the bank statements helps the lender confirm that you have the money for the down payment. The bank statements also help the lender cross reference and confirm debt payments, income, and assets.
So why do you need to include all pages including blanks?
Missing pages make the Lender nervous. They don’t know what could be on those pages. Gathering all the pages is due diligence to ensure they have all pertinent information necessary.
For more information contact Aaron Walker or Jay Rapson at Aaron Lending, LLC.