Providing the Best Possible Advice and Resources for Your Mortgage Loan
When you have questions about mortgages, Arvest Bank has the answers you need.
Story by Ann Butenas
For many individuals, inquiring about a home loan can seem like a daunting activity, especially if they have not previously been through the process. Typically the primary question most people have when requesting a home loan is what can I qualify for? The answer to that all depends on many variables: what you can afford, what you can put down, the current interest rate, the terms to finance, related taxes and insurance, homeowners association fees and more.
With interest rates recently at an all-time historic low, borrowing money has become considerably more attractive. However, there is more to the process than simply requesting that low rate. In order to make the best decision for your situation, consulting with qualified professionals in the banking and financial services industry can help you make smarter financial decisions as you navigate the process of either securing a new mortgage or refinancing your current one.
Is it time to upgrade and move into a newer/larger home?
“You have to factor in a lot of things,” noted Jason Peters, Mortgage Lending Manager of Arvest Bank. “It’s a matter of what you can afford versus what you can qualify for. You can usually qualify for more, as we look at the gross income. That is why we want to talk to the customer about the payment they want to have.”
And affordability is different for everybody.
“With a $500,000 house, for example, property taxes vary by city and are different across the metro,” noted Peters. “Additionally, Homeowners Association fees vary by community, which also need to be taken into consideration.”
With new construction, there is the base price of the home and then all of the design elements that are subsequently incorporated. With resale homes, you have to factor in maintenance with respect to the age of the house.
“I encourage people to get a home inspection, which can cost anywhere between $500 and $700, to reveal what needs to be done, repaired and/or replaced,” said Peters. “Home inspections are critical for any home, especially when upgrading or moving to an older home.”
Positioning yourself to refinance.
When refinancing, individuals are typically looking to do one of two things: lowering their interest rate or reducing the term of their home loan. The benefits of refinancing include saving money, building equity sooner and providing purchasing power geared for other large purchases or home improvement/remodeling projects.
If you are considering refinancing your current home, you have to factor in other variables besides just a lower rate. The questions to ask yourself should pertain to your goals regarding refinancing. Do you want to lower your monthly payment? Do you want to pay off the loan sooner? Do you want cash to apply towards certain home improvement projects?
Peters also stressed the importance of understanding what it might cost you to refinance, noting the importance of taking into consideration how long you plan to live in your home and whether or not you will need the equity to purchase a new one in the future.
“You have to weigh the pros and cons of what you need today versus what you will need in a few years,” indicated Peters.
If you are refinancing for budgetary reasons, such as if your income was impacted by COVID-19, you will need a lower payment at a lower rate and then stretch the terms of the loan to help you make ends meet. If you want to pay off the loan sooner, Arvest Bank can assist with some cases in this regard. For those who desire to simply get some cash, this would be based on the equity in the home, such as if you put a significant amount down when you purchased the home or if you have made improvements to the home.
“Some people, rather than buying new, will choose to remodel their home with the money,” stated Peters.
So while it is nice to have a low interest rate, it is not solely about the rate.
“You have to ask yourself if it is worth it to start over,” explained Peters. “What are the costs to refinance and how many months will it take you to break even? If you are only going to stay in your home for three to four more years, it probably isn’t worth it.”
Peters indicated that right now, with the rates as low as they are, you can switch to a 15-year loan, for example, and save a significant amount of money in interest without significantly impacting the monthly payment.
“Even if you do not stay in the home for the full 15 years, you can pay down the balance and have more equity when you sell,” he said.
The COVID-19 pandemic and its impact on the mortgage environment.
“We’ve been fortunate and have been extremely busy during this time,” noted Peters. “However, the pandemic has changed the way we work with customers. Our mortgage customers and new buyers typically have lots of questions and want to come in and talk with us.”
Because in-person meetings are not always possible at present (although you can make an appointment, if desired), Arvest Bank relies on technology to fill the gaps.
“The current situation has forced us to use what we had available in the past but had not necessarily taken full advantage of,” indicated Peters. “You can actually get a lot accomplished without having to step foot in the door of the bank. We can now even accept a majority of digitally-signed documents.”
Ten years ago, the industry was highly paper-driven. Technology has enabled the process to become more streamlined. Peters noted that even now Arvest Bank is working on virtual closings and within the next year expects those type of situations to be more prevalent.
“Because we are seeing quick improvements in technology, we are able to conduct business and meet all requirements virtually,” stated Peters.
As part of that technology, Arvest Bank offers the Arvest Home4Me Mobile App™, which walks you through the loan process step by step. Through this user-friendly app, you can request pre-qualification, begin your application, connect with a local lender, calculate your estimated monthly loan payment, review daily interest rates to find out the best time to apply, upload requisite documents securely and follow the status of your loan application.
“What kind of rate can I get?” and even better questions to ask.
Like all of us, you are probably curious to know what the current rate is. That is the one question nearly all of us have been taught to ask. When it comes to mortgages, however, those rates can vary from lender to lender.
“Rates are specific to the individual situation,” expressed Peters. “And you have to be prepared to understand what kind of fees you are going to have to pay. As a borrower, are you going to purchase or refinance? Do you want a 15, 20 or 30 year loan? What is the estimated value of your home? How much do you owe? What is your credit rating? We can quote a rate but offer to buy the rate down for a fee. You need to look not only at the rate but at the fees associated with getting that rate.”
Keeping ahead of the competition: making Arvest Bank work for you.
Arvest Bank is a full-service financial institution with local roots that have been holding steady for more than 50 years. That service, coupled with its experienced and knowledgeable team, equates to peace of mind when not only dealing with mortgages, but with any other type of banking service they provide.
Arvest Bank also services 99% of its home loans and does not resort to selling the servicing.
“Other banks often sell their loans to different services, usually within 90 days,” explained Peters. “Over the typical life of a loan, it may be sold off two or three times, which can be frustrating to consumers as they never know who to call when they need assistance. You never really appreciate the importance of servicing until you need it. We are happy to be in a position to offer that valuable service, providing advice and resources throughout the life of your loan.”
Even during the current pandemic, Arvest Bank makes doing business with them as easy as possible, just as they always have, through online access and in-branch support, which is currently by appointment.
“You can come and make a payment at any of our drive-through windows or you can come in our lobby when we are open,” stated Peters. “You also have access to a local representative and can enjoy faster services on insurance issues, such as a hail storm.”
Further, if you cannot make an appointment to come in or make it through a drive-through, some locations offer curbside services.
Years of Mortgage Experience: 15 Years
About Me: I played tennis at the University of Kansas. I’ve been married for 27 years and have two boys in college.
Best part about being a lender: Taking care of the client and being their trusted advisor.
What it means to help a customer: Communication, honesty, and finding the right option for the customer. Buying a home is a big investment and can be stressful, and my job is to make sure the process goes smoothly.
Advice for selecting a lender: Make sure you are working with a lender who has a track record of success!
Years of Mortgage Experience: 6 Years
About Me: I am married with four very active children. We love cruises and visiting the family farm!
Best part about being a lender: Buying a home is an adventure! Seeing someone get the keys to their new home is like reaching the top of a mountain.
How COVID-19 changes the lending process: I spend even more time asking questions and listening to how my customers are feeling about their future and their financial situation.
Advice for selecting a lender: A good mortgage lender will take their time to discuss your financial goals as a whole and to explain the different options available to you.
Years of Mortgage Experience: 37 years
About Me: I like to watch sports, play board games, and volunteer in my community.
Best part about being a lender: Clients put their trust in me to assist them with one of the largest purchases they will ever make! It is an amazing feeling seeing their dream of home ownership come true.
How COVID-19 changes the lending process: Non-traditional communication tools like video conferencing allow for more availability to clients. Flexibility is key to adapting to the current environment.
Advice for selecting a lender: Consider the additional financial services that a lender can offer.
Years of Mortgage Experience: 11 Years
About Me: I am a huge Kansas City sports fan and I’m on the board of the Kansas City Mortgage Bankers Association.
Best part about being a lender: Getting to know my clients during and after the loan process. Many customers return for financial advice in other areas of their lives.
What it means to help a customer: Each person comes into home buying with different needs and questions, and by being available to them from start to finish, I can help each buyer feel confident and comfortable.
Advice for selecting a lender: Interview your lender and work with someone you connect with.
For more information on the benefits of Arvest Bank home loans, visit them online at arvest.com/homeloan. Arvest Bank is an Equal housing Lender.