Frequently Asked Mortgage Questions

• What is the difference between pre-approval and pre-qualification?
• When does it make sense to refinance?
• What is a rate lock?

What is the difference between pre-approval and pre-qualification?

The pre-approval process is much more complete than pre-qualification. For pre-qualification, the loan officer asks you a few questions and provides you with a pre-qualification letter. Pre-approval includes all the steps of a full approval, except for the appraisal and title search. Pre-approval can put you in a better negotiating position, much like a cash buyer.

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When does it make sense to refinance?

Usually people refinance to save money, either by obtaining a lower interest rate or by reducing the term of the loan. Refinancing is also a way to convert an adjustable loan to a fixed loan or to consolidate debts. The decision to refinance can be difficult, since there are several reasons to refinance. However, if you are looking to save money, try this calculation:

1. Calculate the total cost of the refinance

2. Calculate the monthly savings

3. Divide the total cost of the refinance by the monthly savings

(#1 total cost of the refinance) divided by the (#2 monthly savings) equals the "break even" time. If you own the house longer than this, you will save money by refinancing.

Since refinancing is a complex topic, consult a mortgage professional. We welcome your phone call at 509-928-6545 or 800-447-8756. If you wish to call CLS Mortgage’s Kennewick office our Kennewick phone numbers are 800-783-6655 or 800-840-3889.

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What is a rate lock?

A rate lock is a contractual agreement between the investor and borrower. There are four components to a rate lock: loan program, interest rate, points, and the length of the lock. Normally the length of an interest rate lock is 15, 30, 45 or 60 days.

We work to get you the best loan possible. Our qualification process is simple and fast!

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