Home Buyers Guide from Tammy Mitchell Hines & Co. Workbook for Home Buyers | Page 38

What can I do if I have a fixed-rate loan, and interest
rates go down?
When interest rates drop significantly, the
homeowner should investigate the financial
advantages of refinancing. Essentially, this means
taking out a new loan to pay off your existing loan.

Can I pay off my loan early?
If you can afford it and are interested in the
considerable advantages of having more equity and/
or owning your home free and clear at the earliest
possible date, the answer in most cases is yes. If
you’re unsure about the rules governing
prepayment, review your mortgage agreement, as
some do have pre-payment penalty clauses.

Refinancing may require paying many of the same
fees paid at the original closing, plus origination
fees. Most mortgage experts agree that if you can
get a rate 2% less than your existing loan and you
plan on staying in your home for at least 18 months,
refinancing is a good investment.
What is the difference between
pre-qualifying and pre-approval?
Pre-qualifying for a mortgage up to H