For more information on FHA loans, see HUD.gov
Fixed loans are optimal if you are looking for a consistent payment over a long period of time with no surprises. The peace of mind of a fixed-rate loan will offset the slightly higher overall long-term payment. When rates are very low, you can refinance into a fixed-rate loan to lower your monthly payment or convert the fluctuations of an adjustable rate to a steady fixed-rate.
Great news! If you have a large Home Equity Loan or high interest credit cards that are not fixed, you have the option of refinancing them all into a fixed-rate loan which will save you thousands of dollars over the life of the loan.
Refinancing is an investment that does cost the borrower money. Refinancing costs should range from 3-6% of the outstanding principal balance of the loan being refinanced. However, oftentimes these costs can be minimized by making minor adjustments to the interest rate or rolling them into the new loan to avoid out-of-pocket expenses.
*Disclaimer: Refinancing could decrease the amount of money you spend each month, but keep in mind that the total finance charges may end up being higher over the life of the loan if you choose this financing option.
Pre-Qualifications are an important step in today's real estate market. They show sellers that you are qualified to buy their home and that your offer should be considered above other, less serious offers.