A rate and term refinance is the refinancing of an existing mortgage to lower the interest rate or to change the term of the loan (from a 7/1 ARM to a 30-Year fixed, for example) without increasing the loan amount.  Refinances are still considered “rate and term” even if the mortgage loan amount is increased to cover closing costs.

A cash-out loan is the refinancing of an existing mortgage into a larger mortgage that not only changes the interest rate and the terms of the loan, but also advances cash to you. You can use the cash-out for anything of course, including home-improvements, tuition and debt consolidations.

Loan-to-value restrictions and credit standards are tighter for cash-out loans and interest rates are usually higher. You also need to make sure you have sufficient equity to meet cash out guidelines, but our experts are happy to assist with this determination with our free home valuation estimates.

We can close most transactions as fast as 14 calendar days – from “contract to close” (the day you get your keys). Some loan types require longer closing periods if they are particularly complex or if they require us to rely on third parties for significant aspects of the transaction, so please confirm your closing period with one of our team members.

An example is Veterans Administration (VA) loans, where we have to rely on the services of both the Veterans Administration and VA-certified appraisers who often do not work as quickly as the appraisers in our standard appraisal network. Because of this, we need 21 calendar days to close a VA loan.

No matter how quickly sellers want to close, what they want most is certainty. When sellers accept an offer, they know they will be tying their property up in escrow for some time. They also often have plans to move to another home. Sellers do not want their transactions blowing up at the 11th hour because financing was not 100% guaranteed – this puts enormous stress on them, subjects them to penalties, and can even leave them homeless. So, one of the primary criteria sellers consider when evaluating competing offers for their homes is the likelihood or certainty of a timely closing. JVM’s reputation, fully pre-underwritten pre-approvals, and willingness to close very quickly (even when sellers don’t want to), all reinforce the “certainty” that sellers look for when deciding which offer to accept.

Another technique buyers can employ to make their offers more enticing to sellers who do not wish to close quickly involves offering a fast close anyway but with a “seller-rent-back” after close. A “rent-back” refers to a situation where sellers rent back the home they just sold from the buyer who just bought the home.  This technique is often very enticing because it guarantees a fast close and cash in the sellers’ pockets much sooner while also allowing sellers to remain in their former home for up to 59 days (the maximum allowable “rent-back” period) if necessary. Please ask a JVM team member to elaborate on this technique if you are interested.

We strongly recommend the assistance of an experienced Realtor/Real Estate Agent for the following reasons: 

1. Experienced Real Estate Agents have access to the Multiple Listing Service (MLS) and can better assess all the properties available in your price range, outside of property listing sites like Zillow, Trulia, Redfin, etc.
2. Real Estate Agents know the local market much better in most cases, and can help you avoid purchases that are not in your best interest. Appropriate offer-prices can be difficult to assess, and a Real Estate Agent’s guidance is crucial in a competitive market.
3. Without a Real Estate Agent’s expert guidance, you might pay too much or offer too little and not get the house you want. Real Estate Agents also make sure your buyer rights are adequately protected and that you get all of the necessary inspections done properly.
4. And finally, Real Estate Agents help you effectively negotiate for seller credits for closing costs and repairs, among other things. Please let us know if you need a Real Estate Agent referral; we know experienced Real Estate Agents in most major markets throughout California and Texas.

A typical pre-approval takes 1-2 days. If you have an upcoming offer deadline, please let us know and we will happily expedite accordingly.

The pre-approval process is much more involved than most buyers realize (especially because JVM is so thorough) but we can fully pre-approve you in several hours if necessary.

Pre-Approvals VS. Pre-Qualifications

Many lenders offer only “pre-qualifications.” Pre-qualifications can be much faster because they are much less thorough, involving only a preliminary income analysis without a full review of tax returns, assets accounts and credit profiles.

JVM avoids pre-qualifications because they do not uncover potential issues and listing agents and sellers are much less likely to accept an offer accompanied only with a pre-qualification.

Your pre-approval remains valid as long as the primary criteria we used to pre-approve you remains the same.

The primary criteria includes your employment, your income, your debt obligations, your assets, and your credit. If any of these criteria change, please let us know so we can evaluate their impact on your qualifications and pre-approval.

For the vast majority of mortgage loans available, all lenders require the same documentation:

• Tax Returns
• Paystubs
• W2s
• Investment Account/Bank Statements
• Credit Report

Some types of mortgage loans allow much less documentation if you are a particularly strong borrower with a large down payment, low debt ratios, and/or excellent credit.  Similarly, there are “Non-QM” loans available if you do not qualify in a traditional manner. These loans may only require bank statements or other alternative documentation sets, but they also come with higher rates and down payment requirements. When we work on your pre-approval, we will always qualify you for the best loan available with minimal documentation requirements.

This is due to regulations though, and is not because one lender is more demanding than another. ALL lenders are subject to the same regulations and requirements.

Along with your income, employment, and assets, your credit profile is crucial during the evaluation process for any lender’s pre-approval or pre-qualification.

JVM’s full pre-approval process requires that we run our own credit report for several reasons. First and foremost, we use Fannie Mae’s and Freddie Mac’s specialized software as part of our pre-approval process. The specialized software requires that we have our own internal credit report in a specific format that integrates automatically with the software. We need to integrate the entire report too; we cannot just use a score or information that is conveyed to us. In addition, we need to make sure we have a valid and up-to-date report to ensure we have an accurate pre-approval.

Credit reports and information provided by third parties cannot be verified as 100% accurate and therefore should not be relied on when the stakes are so high with respect to mortgage pre-approvals.

We of course understand the concern you may have in regard to inquiries on your credit report. Because of this, we like to remind everyone that the major credit bureaus consider all credit inquiries from mortgage lenders within a 45-day period to be a single inquiry from a credit score perspective. This allows you to “shop” among different lenders, if necessary, and avoid an adverse impact on your credit.

Online credit reporting tools often yield higher credit scores than those that mortgage lenders pull with their reports. This is because the scoring criteria that mortgage lenders use is more stringent than the scoring criteria that is used by the online tools.

As discussed above, we are required to use our own internally generated report that adheres to the specialized scoring criteria for mortgage lenders. 

Yes. It matters because credit scores can significantly affect your interest rate. When lenders check credit, they access the three major credit bureaus and rely on the credit scores those three bureaus generate. Lenders then correlate to “the middle” of the three scores when they qualify you.

If there is more than one borrower on a loan application, lenders correlate to the lowest middle score of all the borrowers on the application.

For example, if a wife and husband are applying for a loan and the wife has a middle credit score of 800 while the husband has a middle credit score of 650, their interest rate could be impacted by as much as 1% because of the husband’s credit score! One solution is to remove the husband from the loan (and still keep him on title) but that only works if the wife has enough income to qualify on her own. The other solution is to have the husband work with one of our recommended credit repair agencies to improve his credit score prior to getting into contract to buy a home. This process, however, can take several weeks or even months.

Vellum Mortgage is the “Mortgage Bank” with which JVM is affiliated. A mortgage bank is an entity whose sole purpose is the underwriting and funding of mortgage loans. This is in contrast to a “commercial bank” that holds deposits, issues checking accounts, and makes commercial loans.

JVM Lending operates independently of Vellum and affiliates with Vellum solely and only to get our loans underwritten and funded in the most efficient and cost-effective manner possible. By affiliating with a mortgage bank the size of Vellum, we can offer much lower rates than we could if we set up our own much smaller mortgage bank.

As a borrower or an agent, all of your interactions will be with JVM Lending only. We are 100% independent with our own tech stack, website, marketing, systems, hiring, training, accounting, and everything else required of a fully functional business.

We share this info in our FAQs because our clients receive disclosures and other information from Vellum for regulatory reasons, and it sometimes confuses people.