A rate lock means that you’re guaranteed that specific day’s mortgage interest rate for some predetermined period, typically 30 to 60 days. If interest rates have been trending upward, it’s generally a good idea to lock in your rate. While the prevailing mortgage rate doesn’t usually make a significant move over a month or two, it’s certainly possible.

A pre-qualification is a basic review of your finances to determine if you’d qualify for a mortgage. In general, a pre-qualification is based on unverified information you provide and does not include a credit check or any documentation, and is therefore not a firm guarantee of a loan.

PMI protects a lender against loss if a borrower defaults. PMI is required from most homebuyers who obtain loans that are more than 80 percent of their home’s value. PMI premium payments may be cancelled under certain conditions when the amount owed on the loan is less than 80% of the value of the home. Ask us for our conditions and procedures to request cancellation of PMI premium payments.

The term “closing costs” refer to all of the charges you’ll need to pay before your loan is completed. This can include origination fees, title insurance, prepaid escrows, and more. Closing costs can vary significantly, and your Planet Home Lending Loan Consultant will provide more details during the loan process.