I'm new to this whole mortgage thing, more specifically, doing a cash-out refinance. I'm refinancing on a paid-off house to pay off school loans. Good credit, the loan I want is less than 60% of the value of the home, and it's for 30 years.
I think I have a fairly good understanding of all the basic terms, but here are some questions I haven't found answers to:
1) If you are pre-approved for a loan, and you are asked to lock down the rate, does that mean you are tied exclusively to that broker? Is there anything that would keep you from switching brokers after it's locked? Or is it just seen as poor form?
2) I was looking at going with lower interest rates with some fees up front (mainly 0.5 points +2000, or some combination that yielded something in that range) due to the interest savings over the 30 year term. People keep telling me that it's not worth it to pay fees up front since I'll refinance in a few years anyways. BUT, looking at historical mortage rate data, it seems like the lowest it's ever been was in late 2012, and it was always on a downward trend.
So it seems like it made sense in the past to forgo fees and pick the higher interest rate. But nowadays it seems like the trend is reversing and the rates are going back upward. Wouldn't keeping a lower rate now make sense? Or am I just too knew to this and still don't understand the big picture?
Anything else I might need to know?
THANKS
I think I have a fairly good understanding of all the basic terms, but here are some questions I haven't found answers to:
1) If you are pre-approved for a loan, and you are asked to lock down the rate, does that mean you are tied exclusively to that broker? Is there anything that would keep you from switching brokers after it's locked? Or is it just seen as poor form?
2) I was looking at going with lower interest rates with some fees up front (mainly 0.5 points +2000, or some combination that yielded something in that range) due to the interest savings over the 30 year term. People keep telling me that it's not worth it to pay fees up front since I'll refinance in a few years anyways. BUT, looking at historical mortage rate data, it seems like the lowest it's ever been was in late 2012, and it was always on a downward trend.
So it seems like it made sense in the past to forgo fees and pick the higher interest rate. But nowadays it seems like the trend is reversing and the rates are going back upward. Wouldn't keeping a lower rate now make sense? Or am I just too knew to this and still don't understand the big picture?
Anything else I might need to know?
THANKS
