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Lender Minute: Low Interest Rate - What to look for.
1. Rates - Yes they are still historically low, however, many lending institutions are either
- Artificially inflating rates to control capacity issues, or;
- Aren't allowing you to lock until after you have been thru underwriting
I recommend you be quick about providing your lender with that they need so your loan officer can get you thru the system and locked. Please note some turn times out there are over 120 days long from application to close, so choose wisely with or without a lock allowed.
2. Rates- LOOKOUT- Some lending institutions are charging for those lower rates. They should be making you aware of it, however, we have seen some don't.
- Look at your Loan Estimate - It will say "points" and then provide an amount. If it does that is what you are paying to obtain that rate. Call me as we aren't charging points unless you specifically request or it makes fiscal sense to do so.
3. Product Availability- Check with your lender to be sure what your lender or bank offered you at pre-approval is still available before you make an offer on a home. Many products have been suspended across America to lower risk, for example:
- Jumbo Loans (Loan amount over $510,400) aren't readily available with every institution currently
- Bond Loans (such as VHDA) have been suspended until further notice
- High-Balance Conforming Loans (Loan amount over $510,400 but varies by county) are currently difficult to find at competitive rates
- Other Refinances such as Cash-out, Second-Homes, and Investment properties are not available with many larger institutions
The biggest take away from this is check with your lending institution even if your loan is already in process to ensure they can still provide you with a loan.
4. Credit Score/reserves - Requirements on credit scores & reserves have increased everywhere with some more extreme than others which may impact your previous approval. AGAIN ask questions of your lender about product requirements and credit scores! ( Range of score I have seen out there are now at 620 & up, some banks have gone to 700 & up only )
5. Verbal verification of employment is required 3 days prior to closings now.
All bullet points above are meant as a brief insight & this in no way covers everything that is going on with mortgage lending. Borrowers just need to take note of the above and ask questions DON'T assume things are okay. Contact Sonya Orlick at Caliber Home Loans for more information.
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