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:
Calculate the total cost of the refinance
Calculate the monthly savings
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,
call or e-mail us with questions.
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.
