Current Mortgage Rates
Table assumptions: owner-occupied property, less than 75% loan-to-value, borrower credit scores of 740 or higher and an origination fee of 1.25%
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Mortgage Rates History Charts
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Shopping for a mortgage loan has been portrayed in the media as being a long, difficult, and thoroughly unpleasant process. At Valley View, we don’t believe it has to be – in fact, when you hire a broker like us to do all of the hard work for you, the process can be virtually painless.
The simple version is as follows – though we also encourage you to read the whole article for a more in-depth understanding:
- Apply for loan
- Get loan approval
- Order appraisal/lock interest rate/satisfy lender conditions
- Sign loan docs
- You’re done
The first step is the loan application – we can send you one to complete or you can just give us a call whenever you’ve got ten minutes or so to spare and we’ll play a quick game of (give or take) 20 Questions. That starts the ball rolling.
Once we have your application, we need to obtain a credit report. This provides us with a complete, up-to-date picture of what the rest of your debt structure looks like and, most importantly, gives us your credit scores from the three major credit bureaus. Most lenders drop the high and low scores, using the middle score to determine what kind of financing you’ll qualify for, and what interest rate you’ll pay.
We now go and shop your loan among the different wholesale lenders we work with. While there are a few we’ve found that offer the most competitive pricing and best service, we have access to rates and programs from dozens of different banks, in case a unique situation presents itself that requires we shop around more than usual.
Once we find the best deal for you, we prepare a quote and present it to you in two ways: the new Good Faith Estimate and the Fees Worksheet (which used to be called a Good Faith Estimate until 2011). The GFE paints a broad picture, showing in a lump sum what your cost of obtaining a loan is, what interest rate you qualify for, and what other interest rates you might be able to get if you were willing to pay more or less for the loan. The FW is more detailed, breaking down each individual charge and showing where those charges are going – we’re happy to spend time reviewing either or both with you to make sense out of them.
If you decide to move forward with the loan, it’s time to get to work (until now, you’ve just spent those initial ten minutes going over the application). We’ll send out a stack of paperwork to sign, including the loan application and a handful of other disclosures, along with a request list for income documentation the lender is going to need to process your application. While certain circumstances may change what’s required, these items are almost always part of the application package:
- Two years’ complete federal tax returns
- Two months’ bank statements
- Single most recent statement for any investment/retirement accounts
- Pay stubs covering the most recent 30 days of work
- Photocopy (or scan) of your driver’s license and Social Security card
When you’ve got all of your financial paperwork together (you can give us copies to keep or originals that we’ll scan and return to you, usually the next day), we organize it all and send it to the lender. Within a few days, we should have your initial loan approval, which will usually contain a handful of extra documents that the underwriter (the person approving your loan at the bank) wants to answer questions she may have thought up while reviewing your original paperwork.
This is the point at which we usually order your appraisal and talk about a rate lock. We can do either of these things earlier in the process, but the appraisal fee is something you pay to a third party that’s non-refundable, even if your loan doesn’t end up closing, so we like to make sure we have a clean approval in hand before ordering, unless there’s an incredible rush to close your deal quickly.
With regard to both appraisals and rate locks, there’s one thing to keep in mind – your loan generally can close as quickly (or as slowly) as you want it to. While there’s normally a turnaround time of 2-3 days every time the lender asks us to provide them with a condition, if we’re able to get them what they’re asking for the same day or the next day, it’s not unreasonable to think that a loan could close in three weeks, maybe less. If it takes you a few days to act every time the lender asks for an extra pay stub or bank statement, it could take a month to close your loan. If you go on vacation for a week in the middle of the process, or want to wait for your bank to mail you a new statement rather than going down to your branch to get one printed on the spot, it could take much longer than a month to close.
When we “lock” your interest rate, we’re getting the lender to promise to offer us the interest rate and loan price that you select for a period of 15, 30, or 45 days. The longer they guarantee the rate, the more expensive the fees will generally be. In order to save you the most money, we watch interest rates constantly – they change at least daily, sometimes three or more times in a single day. If we see rates holding steady or trending down, we’ll generally leave your loan “unlocked,” waiting for the time when we can lock in at 15-day pricing and get you the best deal possible. But if rates look like they might rise soon, or if you’re happy with the price you’ve been quoted and don’t want to deal with the instability of daily fluctuations, we want to lock up a deal we know you’ll be happy with.
The problem with choosing too short of a lock is that the lender will charge extra fees if we don’t close the loan in time. This is especially true if rates are higher at the time you’re ready to close your loan than they were at the time you locked your rate. So while you do get some peace of mind from knowing the price you’ll pay is guaranteed, there’s also some pressure in that it’s now incumbent upon you to make sure any lender requests are met in a timely manner. We’ll talk about the best way move forward with you when it’s time to make this decision, as every transaction is unique in this regard.
Within a few days after your appraisal is ordered, the appraiser will want to come out to your house to take a look around, shoot photos, and measure the building. If you’re refinancing you’ll get a call from the appraiser to set the appointment, but if you’re buying a new home the seller’s agent will be the one handling the scheduling. It’s generally then another three to five business days after the inspection until the appraisal report is done – if the value is sufficient to support the loan balance, we’re ready to move toward closing.
The final step in the process is signing loan docs – this is a simple term used to describe an incredibly complex and lengthy pile of forms that you will use to sign your life away to the bank. Some forms need to be signed in front of a licensed Notary Public, and many notaries have received special training to be able to explain the loan documents in detail. Your notary will either arrange for you to visit his office or will offer (for an additional fee) to come meet you wherever it’s convenient. Let us know when you schedule your signing so we’ll be available (even if after hours) to answer any questions that might arise in case the notary is unable to do so.
At this point you’re pretty much done – if you’re bringing in money to pay down your loan balance (or you’re purchasing a new property and have to make the down payment), you’ll go to your bank to arrange a wire transfer, otherwise you just need to wait. When refinancing your home there’s a three-day “rescission period,” during which you’re allowed to change your mind and cancel the loan. Once that time is up, or as soon as the day after you sign docs on the refinance of a rental property or on a purchase loan, your new lender will fund the loan, your old loan (if there is one) will be paid off, and you’re done. Now there’s nothing to do except enjoy the fact that you’re probably going to skip your first month’s payment.