Exciting news from your friends here at Voyage…we started a podcast! Our new podcast, Tips for Change, is dedicated to empowering you on your financial journey.
For our first Voyage podcast, Tiffany Mutchler, Marketing Manager, sat down with Heather Schutz, VP of Mortgage and Business Banking, to discuss the mortgage process here at Voyage.
What types of mortgages does Voyage have to offer?
We have construction loans if you’re looking to build the dream home, home equity, home improvement loans, lines of credit if you’re looking to send a kid to college, or do some improvements on a home that you currently own, and options with home equity.
There are conventional loans which are your normal refinances and purchases for 30 years, 20 years, 15 years, and 10 years. We also offer in house products like adjustable-rate mortgages and some mortgages that don’t quite fit the Fannie Mae conventional box.
What is involved in the mortgage process?
We have a great online application that you start with. Once we get the application, we run a preapproval. It’s helpful on the purchase side because realtors are going to want you to have a preapproval letter to know that financing is in line.
Then we’re going to need your common income verification. If you’re a normal W2 wage earner, we need pay stubs and W2’s. We need tax returns if you’re self-employed. If you have other income sources, that also has to be proven. We also need homeowners insurance, and if it is a purchase, a purchase agreement.
Do I need to have a really high credit score?
The minimum credit score we have is 620. There’s no cost to check and see if you qualify. All it is is a credit pull and there are no application fees to check it out. We want to be able to help guide you through that.
What’s the difference between a fixed-rate and an adjustable-rate mortgage?
A fixed-rate mortgage is a 30-year rate and that’s the same rate throughout the mortgage process. It’s fully amortized at that interest rate and stays the same the whole time.
An adjustable-rate has an introductory rate that lasts for a set period of time and can adjust after that. At Voyage, we have a five, seven, or 10-year fixed, which means for that time, that rate is fixed. After that, it can go variable and it can move like a max of five percent.
If the rates are pretty high at that time, they’re fixed on, or they’re a certain margin over indexes that we use. The benefits of a passable arm loan would be if you’re not intending on staying in your home, if it’s a temporary home, starter home or you intend to move on, then you’d be an easy fit.
When is a good time to refinance?
What I like to do is figure out the cost savings, how much you are going to save per month on the difference in the rate, whatever percentage it ends up to be, and then factor in closing costs and what it’s going to cost you to do a refinance. If you intend on staying in your home after that point, you’re ahead of the game.
Anything past that point would be beneficial for you. It’s hard to put a specific number on it, but that’s what me and my mortgage team will do for you.
What are closing costs?
The closing costs are pretty straightforward on a mortgage. The two that are generally set by the lender are an origination fee and a processing/underwriting fee. Origination fees are the cost to originate the loan, most lenders have those. They range between a half percent and a percent. At Voyage, we offer half a percent.
The rest of the fees are your appraisal fee, title company, and recording mortgages, and that goes into every transaction the same. If you’re shopping for a mortgage or you’re shopping for rates, getting an estimate of what those costs are, is always a good place to start.
How do you lock in an interest rate?
Generally, you want to lock the construction. It depends on when their completion dates are. Most lock terms are in that 45 to 60-day range, there are some longer-term locks, but there are some other specific requirements that go on along with that. If you’re looking at building, then you’re going to have to hold off until you get a little bit closer and play that game.
As soon as you commit to the lender, you can lock. Locks are great. You get your rate locked and it protects you from rates going up. However, if rates go down, you don’t get the lower rate either. That’s the unfortunate part, but it’s good protection on both sides that once you get your rate lock, that’s the rate you’re going to get at closing.