Frequently Asked Questions
Here are answers to some of the most frequently asked questions from our members.
Who is VARRIS Mortgage Solutions and how are they connected to my credit union?
VARRIS Mortgage Solutions is not a lender. It is a professional mortgage consulting and processing company contracted by your credit union to assist its members and to do all of the paperwork necessary for them to originate your loan. Your credit union is your lender. In the rare circumstance that your credit union is unable to make your loan (for example if they are unable to offer the loan product you seek) then VARRIS will attempt to place your loan with another lender as a courtesy, if possible.
How can I get pre-approved?
A pre-approval can only be obtained by submitting an application along with the documentation on our checklist. Pre-approvals require analysis of credit, income and assets to be of any value.
How can I get pre-qualified?
You can get an idea of whether you qualify for a mortgage by using our 1-Minute Pre-Qualifier tool. You may also contact a Mortgage Advisor by phone and ask him or her to plug in some numbers for you to get an idea of how much you may qualify for. Please note that pre-qualifying is not the same as getting pre-approved. See "How can I get pre-approved?" (above).
Do you offer FHA loans?
No. We do not offer FHA loans. All of our loan products are Conventional.
When can I lock in my rate?
You can lock in your interest rate anytime during the loan process. For purchases, there must be a ratified contract in place. Please note that the appraisal must be ordered by the time the rate is locked due to the time fuse created by the rate lock.
How can I lock in my rate?
Rate locks are done only by phone with your Mortgage Advisor. This is due to fluctuations in the market. Interest rates posted on the web site are not live. They are updated regularly but the rate lock is done with live pricing that may differ from the posted rates if the market is volatile. Please note that the posted interest rates are tied to certain assumptions and the specific parameters of your loan may differ.
What are points?
A point represents one percent of the loan amount. The function of paying points is to buy down your interest rate. On purchase loans, points are paid out-of-pocket. On refinances, points may be added to the loan amount so long as there is sufficient equity to meet the loan program requirements.
Should I pay points?
The decision of whether to pay points is dictated by how long you intend to keep the loan. If you pay a point, it will reduce your monthly payment. The question is, how many months will it take to recoup the point you paid at the rate of savings per month? For example, if paying one point saves you $50 per month on a $300,000 loan, divide the cost of the points (in this case $3,000) by the monthly savings ($50 per month) to determine the break even point. In this example, it would take 5 years to break even. If you plan to sell the property or refinance within the first five years, it would NOT be worth it to pay the point. If you plan to stay or keep the loan more than five years, then your savings will increase every month beyond the break even date. Your Mortgage Advisor can assist you in running break even calculations to make an informed decision about paying points.
What is the APR?
The term APR is an acronym for Annual Percentage Rate. The APR is a government created calculation designed to display the cost of financing your loan over its full term in the form of an interest rate. To illustrate it, imagine one lender quotes you a 30 year fixed rate at 6% and another lender tells you they can get you the same loan at 5%. You would want the 5% rate, of course. But what if it turns out that the 5% loan is going to cost you 2 points? Would you stll want the loan with the lower rate? The APR characterizes the cost of the loan as interest for the sake of easy comparison. In theory, the loan with the lower APR represents the lower overall cost of financing. However, it is important to consider more than the APR. Quite often, a loan with points paid to buy down the rate will have a lower APR. However, if your plans to keep the loan are short term, it may not be in your interest to take the loan with a lower APR. See "Should I pay points?" (above).