FAQs Archive - Tamaela Mortgage

Q: What different types of home loans are there?

There are a variety of mortgage loan types available. The most common ones are Conventional, Government-backed (FHA and VA), and Jumbo. Each has different down payment requirements, interest rates, and monthly payments. The two main types of interest rates are: Fixed: Most homebuyers take out fixed-rate mortgages for 30, 20, or 15-year terms. Often called “conventional,” these mortgages have fixed interest rates and regular monthly principal-and-interest payments that don’t vary over the life of the loan. Adjustable: There are several kinds of adjustable-rate mortgages (ARMs) available. With ARMs, the interest rate applied on the outstanding balance varies throughout the life of the loan.

Q: What is a mortgage escrow account?

An escrow account is set up by the mortgage lender to pay certain property-related expenses on your behalf. A portion of each mortgage payment will go into your escrow account to cover property taxes and homeowners’ insurance.

Q: How often can I refinance?

There is no limit to how many times you can refinance your home. However, mortgage lenders may have a few rules based on when you took out your prior home loan, such as requiring a six-month waiting period.

Q: Is an appraisal necessary when I refinance?

In most cases, you must go through the appraisal process, but depending on the circumstances it may not be required. The appraisal is used to establish the market value of your home, which will determine the amount you can refinance, including any cash-out amount.

Q: What is cash-out refinance?

A cash-out refinance lets you access your home equity by replacing your existing mortgage with a new one that has a higher loan amount than what you currently owe. If you have enough equity in your home, cash-out refinancing can provide a low-cost way of meeting your objectives — home improvement projects, paying off high-interest credit cards, or other financial needs.