| Besides getting a low interest rate, knowing how much | | | | about 25 percent less than a 15 year mortgage. |
| it will cost you to refinance is just as important. Here is | | | | 4. Will I be charged a penalty for prepayment? If you |
| what you need to ask the loan officer when searching | | | | were to pay your loan off early, would you be |
| for the lowest cost refinance loan. | | | | charged an extra fee? |
| 1. Are you being charged points? Be sure to ask your | | | | 5. What are the lenders closing fees? These are loan |
| prospective lender whether you are being charged | | | | charges paid to the lender such as loan application fee, |
| points on the new loan. Many mortgage lenders | | | | loan document preparation fee, underwriting fee, |
| charge points as part of the mortgage package. One | | | | processing fee, and the clever miscellaneous fee. You |
| point is equal to one percent of the amount you are | | | | can usually negotiate with lenders to reduce these |
| borrowing. | | | | fees. |
| 2. Can you get your low rate locked-in? A mortgage | | | | With this information you can compare several lenders |
| rate lock-in is a mortgage lenders written guarantee of | | | | fees, and determine whether a lower interest rate is |
| rates and terms for a specified period of time. Typical | | | | being made up in the form of higher fees and closing |
| lock-in periods are from 10 to 60 days. | | | | costs. If so, ask the loan officer to match the fees of |
| 3. What is the length of the loan you're being quoted? | | | | the lowest priced lender. Most lenders have quite a bit |
| Most fixed rate loans are quoted at 15 or 30 years. | | | | of flexibility, especially in the area of fees and closing |
| The main advantage of a 30 year loan over a 15 year | | | | costs. Remember, loan rates and fees are always |
| is that it has a lower monthly payment. Payments on a | | | | negotiable. |
| 30 year mortgage with a 7 percent interest rate are | | | | |