Refinancing to shorter term and savings
Frequently Asked Questions
Straight answers to the questions we hear most.
The interest rate is the cost you pay each year to borrow the money, expressed as a percentage. The Annual Percentage Rate (APR) is a broader measure of the cost of your mortgage, as it includes the interest rate plus other loan costs such as points, broker fees, and certain closing costs.
Pre-qualification is a quick, informal estimate based on unverified information you provide. Pre-approval is a much more rigorous process where the lender checks your financial background and credit, giving you a definitive, conditional commitment that carries significant weight with sellers.
An escrow account, also sometimes called an “impound account,“ is a dedicated bank account set up by your mortgage servicer to hold funds for paying your property taxes and homeowners insurance premiums. A portion of your monthly mortgage payment is deposited into this account, and the servicer then pays these bills on your behalf when they are due.
FHA Loan: Yes, FHA loan limits are set by county and are based on local home prices.
VA Loan: In 2024, most VA loan borrowers have no loan limit, meaning they can borrow as much as a lender is willing to approve without a down payment. A limit may apply if you have remaining entitlement on a previous VA loan.
USDA Loan: No set maximum loan amount, but your eligibility is limited by your ability to qualify and the area’s maximum income limit.
VA Loan: In 2024, most VA loan borrowers have no loan limit, meaning they can borrow as much as a lender is willing to approve without a down payment. A limit may apply if you have remaining entitlement on a previous VA loan.
USDA Loan: No set maximum loan amount, but your eligibility is limited by your ability to qualify and the area’s maximum income limit.
Some lenders charge additional fees for processing and underwriting the loan. An origination fee is a common one, often a percentage of the loan amount. Knowing this upfront helps you compare the true cost between different lenders.
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