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Mortgages and Refinancing - What to Expect

Many of our members are watching the housing and mortgage markets closely as they prepare to purchase a new home, or refinance their current home loan. With so much information circulating in the media, what can be overlooked are the many rules and guidelines that lenders must abide by and how these rules could impact the home loan process. Here are some things to keep in mind:

  • Factors that Affect Rates We understand that many members are interested in securing a low, fixed-rate mortgage, either for a new home or to refinance an existing loan. Mortgage rates and fees, however, are affected by many factors: your credit score, the type of property, your down payment, or in the case of a refinance, the equity in your current home. Add to this the fact that home values are changing rapidly, a mortgage rate is difficult to predict in advance, since any of these conditions could change. Expect a rate to adjust on any of these factors.
  • Conforming Loan Limits Loan amounts that meet conforming limits typically have lower rates than jumbo loans and depend on the county where the property is located. You can find your county’s current conforming loan limit here. These amount limits will also affect rates and borrowing costs.
  • Title Work is Taking Longer Research and paperwork is time-intensive. When the housing market slowed down in late 2007 and 2008, the appraisers and title companies who helped process loans laid off a significant portion of their workforce. The current purchasing and refinancing “boom” has left these companies woefully understaffed and slow to respond to the demand – what once took several days now requires weeks.
  • Begin the Application Process Early When buying or refinancing, it’s a good idea to get started earlier rather than later. If you’re planning on trying to get the best rate possible, prepare yourself with some of the details involved when making your choices. You can apply for a loan (and check the status of an existing application) online 24 hours a day, seven days a week here.