When does it make sense to refinance? Can I buy a home if I have less than perfect credit? What is rate lock? These are commonly asked questions that we get from our clients every and are listed below. Don’t see the answer to your question? Not a problem. We are here for you.
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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.
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.
Yes. Keep in mind that lenders don’t just look at your credit history, but also at your ability and willingness to pay in the future. At Chase, we may be able to help you buy a home, even if your credit isn’t perfect.
If you plan to be in your home for more than seven years, you may want to consider a fixed-rate mortgage, which offers predictable payments and long-term protection against rising mortgage interest rates. If you plan to be in your home for seven years or less, an adjustable-rate mortgage (ARM) could be attractive. Keep in mind that with an ARM, your monthly payments have the potential to go up each time your interest rate adjusts.
When you pay a discount point, you are essentially paying part of your interest to the lender up front. This will lower your interest rate—as well as your monthly payment—over the life of the loan. One discount point is always equal to 1% of the loan amount. For example, one point on a $100,000 loan would require payment of $1,000 at closing. Generally speaking, the longer you plan to remain in a property or hold your mortgage, the more advantageous it is to pay points. There is no requirement to pay discount points; whether or not you decide to pay points is completely up to you.
Traditional loans usually require documents that verify your employment, income and assets, and may include:
There is no set amount. In fact, you might be surprised to learn that many first-time homebuyer programs require as little as 3.5% down. Today, there are many loan programs that can be tailored to fit your needs and financial resources. Keep in mind that for down payments of less than 20% on conventional loans, private mortgage insurance (PMI) will be required.
Three types of mortgage and homeowners costs may be tax-deductible: discount points, interest paid on a home loan or home equity loan and property taxes. After the year that you buy your house, only your mortgage interest and annual property taxes are deductible. For a refinanced loan, points must be deducted over time. Consult your tax advisor for advice about your situation.
You may want to consider refinancing if you are interested in paying off high-interest-rate debt, shortening the length of your repayment term for your mortgage or lowering your monthly mortgage payment.
Generally speaking, one or more of the following conditions needs to be present before you should consider refinancing your mortgage:
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:
(#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.
Yes. Chase offers a variety of options that allow you to tap into your home’s equity and take cash out. Consult your Mortgage Banker for the best cash-out refinancing option for you.
Cash-out refinancing can help homeowners who want to consolidate high-interest, non tax-deductible debt. Because your mortgage interest rate is likely to be lower than rates on credit cards or other types of bank loans, consolidating debt may reduce your overall monthly debt payments. In addition, your mortgage interest may be tax-deductible, while your credit card interest is not.
Yes, in most cases. However, depending on the circumstances, an appraisal may not be required.