Learn Top 15 Mortgage Questions to Ask Your Lender
12. When should I think about refinancing?
You should absolutely consider refinancing if:
1. You can reduce your interest rate sufficiently to cover the closing fees.
2. You can switch from an adjustable rate to a fixed-rate mortgage.
If you can reduce your interest rate by half a percentage point, it’s usually not worth it to refinance. But suppose it takes you another eight years to pay off your mortgage, and you might reduce your interest rate from 6% to 4%.
Lowering your interest rate from 6% to 4% on a $200,000 mortgage might save you around $200 per month. That adds up to more than $19,000 over the course of eight years. Closing fees for refinancing a $200,000 loan average $2,000.3. Is it worth paying $2,000 in closing expenses to save $19,000 in the long run? Most likely!
Refinancing your adjustable-rate mortgage to a fixed-rate mortgage is almost always a good decision. Your monthly payment on an adjustable-rate mortgage might fluctuate dramatically. We don’t want you to take that chance. Even if you have to pay closing expenses, a fixed-rate mortgage is your best alternative.
Refinance to no more than a 15-year fixed-rate mortgage. Remember that the purpose of refinancing is to get out of debt faster, not to stay in debt longer!
You don’t have to refinance only to acquire a shorter term if you already have a reasonable interest rate on a 30-year fixed loan. It’s simple to pay more on your mortgage. Our mortgage payoff calculator can help you figure out how much extra money you need to spend each month to reach your goal.
13. What happens once you’ve been preapproved for a house loan?
Getting pre-approved for a mortgage is only the first step. When all of the financial pieces are in place, it’s time to start looking for your dream house! While this is one of the most exciting parts of the process, it can also be one of the most stressful. That is why it is critical to work with a buyer’s agent.
A buyer’s agent can assist you in choosing a house, negotiating the contract, and closing on your new home. What’s the best part? Working with a buyer’s agent is completely free! This is due to the fact that, in most circumstances, the seller pays the agent’s commission.
Why not collaborate with a real estate expert who can help you save time, stress, and money on your house purchase? We can put you in touch with a high-octane real estate agent in your region who has earned our seal of approval.
14. How long does it take to complete a real estate transaction?
Currently, the average time to close a house is roughly 40 days.4 Factors, such as your loan type, financial situation, and contract term, might all lengthen or shorten that time frame.
15. What happens at the end?
That new house and mortgage are officially yours after you close. At the closing, you will meet with the professionals involved in your real estate transaction and sign all of the legal documents necessary to transfer ownership of your new home to you. That is very fantastic!
As part of the closing procedure, you will also be responsible for paying closing charges. Closing expenses are typically 3-4% of the purchase price of your house. Three days before closing, you’ll receive a Closing Disclosure so you know exactly what to expect.
Talk to your real estate agent or lender if you have any questions about the closing process.
