Sponsored By: SOUTH CAROLINA FEDERAL CREDIT UNION
Purchasing a home opens the door to a lot of questions. Working with local, South Carolinians for nearly 80 years now, South Carolina Federal Credit Union has heard our fair share. Everything from “can I swap homes with a friend?” to “is there any way to make the neighbor remove their rival team flag?”.
We know you’ll have plenty more as your house hunt progresses, but here are three of the most frequent questions we hear from folks beginning the home buying process.
What are mortgage points?
A mortgage point is one percentage point of your total loan amount (excluding the origination fee), which serves as prepaid interest, driving the rate on the note up or down.
For example, with a $300,000 loan, one mortgage point would be equal to a charge of $3,000 to reduce the interest rate or could equal a $3,000 credit from the lender towards your closing costs. These are often called “discount points” because the borrowers can discount the monthly payment of their loan.
Is a preapproval necessary?
Pre-approval is valuable for establishing credibility with real estate agents, some will even require preapproval before submitting your offer. It also ensures that you have an accurate understanding of how much you can afford and the payments in various loan ranges. With this knowledge, you are well-positioned to scour the market and make competitive offers. The pre-approval process can be completed over the phone or online in just 10 minutes.
How long does it take to close on a home?
It can often be a careful calendar balancing act between selling your home and getting into your new abode. Borrowers with preapproval are typically able to close on a home faster, since certain items are already verified. Although it varies by transaction, most mortgage loans can close within 45 days. South Carolina Federal tip: provide all of your income and asset documents, in addition to your pre-approval, up front and you’ll be able speed up the process even more.
We know this is just the tip of the iceberg, so let’s continue the conversation. Feel free to bounce your mortgage related questions off us by visiting any of our financial centers or reaching out to us via phone, 843-797-8300, or social media (@scfederal).