Frequently Asked Questions about Texas Mortgages

1. 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. Preapproval is almost like a line of credit and if you are competing against other buyers for a property without preapproval your offer will be considered before those without preapproval.

For Rapid Pre-Qualification, please contact our lending experts!

2. 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:

a. Calculate the total cost of the refinance

b. Calculate the monthly savings

c. 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.

3. 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.

Since refinancing is a complex topic, if you have any additional question, please contact a mortgage professional.

Act Now!

These are some of the lowest rates in thirty years, and they won’t last forever. If you don’t Apply Now, you could miss the refinancing chance of a lifetime.

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