The decision between a 15-year and a 30-year mortgage is one of the most significant financial choices a homebuyer can make, setting the trajectory fo...
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The choice between a 15-year and a 30-year mortgage is one of the most significant financial decisions a homebuyer or refinancer will make. This decis...
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The journey to homeownership is often symbolized by the quest for the perfect mortgage rate, but the financial responsibility extends far beyond that ...
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In the ever-evolving landscape of real estate financing, an often-overlooked option presents a unique opportunity for both buyers and sellers: the ass...
Read MoreYes. Besides a full appraisal, you might encounter: Automated Valuation Model (AVM): A computer-generated estimate used for preliminary approval or some refinances. Broker Price Opinion (BPO): A real estate agent’s estimate of value, often used for listing purposes or by banks for foreclosures. Tax Assessment: The value assigned by a municipal government for property tax purposes, which often differs from market value.
A float-down option is a feature you can sometimes add to your rate lock for an additional cost. It allows you to “float” your rate down to a lower level one time if market interest rates decrease significantly during your lock period. This provides protection against rate rises with a chance to benefit from a drop.
A properly executed rate lock is a binding agreement, and the lender cannot revoke it or change the rate during the lock period, provided you close on time and your financial situation does not change materially (e.g., your credit score drops significantly or you change the loan amount).
The two most common types are a traditional second mortgage (a lump-sum loan with a fixed or variable rate) and a Home Equity Line of Credit (HELOC), which operates like a revolving credit account you can draw from as needed.
A break-even analysis determines how long it will take for the monthly savings from your new mortgage to equal the upfront costs of refinancing.
- Formula: Total Closing Costs ÷ Monthly Savings = Break-Even Point (in months)
- Example: If your closing costs are $6,000 and you save $200 per month, your break-even point is 30 months ($6,000 / $200). You should plan to stay in the home longer than this period for the refinance to be financially beneficial.
