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What is the difference between pre-approval
and
pre-qualification?
The pre-approval process is much more
complete than pre-qualification. For pre-qualification,
the loan officer asks you a few questions and provides
you with a pre-qual letter. Pre-approval includes all
the steps of a full approval, except for the appraisal
and title search. Pre-approval can put you in a better
negotiating position, much like a cash buyer.
When does it make sense to refinance?
Usually people refinance to save money, either by obtaining a lower interest rate or by reducing the term of the loan. Refinancing is also a way to convert an adjustable loan to a fixed loan or to consolidate debts. The decision to refinance can be difficult, since there are several reasons to refinance. However, if you are looking to save money, try this calculation:
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Calculate the total cost of the refinance
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Calculate the monthly savings
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Divide the total cost of the refinance
(#1) by the monthly savings (#2). This is the "break
even" time. If you own the house longer than this,
you will save money by refinancing.
Since refinancing is a complex topic,
consult a mortgage professional.
What is a rate lock?
A rate lock is a contractual agreement
between the lender and buyer. There are four components
to a rate lock: loan program, interest rate, points,
and the length of the lock.
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