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Frequently Asked Questions
Straight answers to the questions we hear most.
A rate lock is a guarantee from the lender that your interest rate will not change between the lock date and your closing, protecting you from market fluctuations. A float-down option is a paid feature that allows you to secure a lower rate if market interest rates decrease during your lock period.
This usually comes down to fees. If Lender A and Lender B offer the same 6.5% interest rate, but Lender A has higher origination fees, their APR will be higher. This highlights why comparing APRs is essential for identifying the most cost-effective lender.
This depends entirely on your specific loan agreement. Many Home Equity Loans and HELOCs do not have prepayment penalties, but it is a critical question to ask your lender before signing. Some loans may charge a fee if you pay off the balance within the first few years.
Refinancing from an Adjustable-Rate Mortgage (ARM) to a Fixed-Rate Mortgage is a wise strategy when fixed rates are low or when you want to lock in a predictable payment for the long term. This is especially important if you plan to stay in your home beyond the initial fixed period of your ARM, protecting you from future interest rate hikes.
There is no single universal minimum, as it depends on the loan type. Generally, a FICO score of 620 is a common benchmark for conventional loans. Some government-backed loans (like FHA) may accept scores as low as 500 with a larger down payment, but a higher score will always secure you a better interest rate.
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