Ask Your Mortgage Loan Lender These Questions Before You Sign!
Getting a mortgage loan isn’t as easy as shopping for cell-phone insurance, for example. This is a financial product that is somewhat complex and requires thorough research. Here are some questions you can ask your potential lenders before settling on a loan.
How Much Can I Borrow?
During the first step of the process, lenders generally consider your income level as well as your debt and employment status and your credit history. All of this information is necessary for you to determine precisely how much you can borrow.
A discussion with your lender could help you prequalify for a mortgage so that you can start house-shopping. Bear in mind that first-time homebuyers, as well as military veterans, are typically eligible for special government-sponsored mortgage programs.
What Is the Down Payment?
To g it is advisable to make a down payment of at least 20% of the total purchase price. However, it bears mentioning that a lower downpayment doesn’t necessarily disqualify you and that you may have private mortgage insurance added to your monthly payments if you put down less than a 20% deposit. The downpayment affects other variables, like the terms, monthly payments, and the interest rate.
What’s the Interest Rate?
One of the most important questions that you should ask your lender immediately is for a direct interest rate quote, including the corresponding annual percentage rate or APR of the loan. The APR takes into account other charges related to the loan and also fees concerning the loan. The APR gives you an apples-to-apples means of comparing mortgage loans among the lenders you are looking at. Shop around to find a loan that you are happy with.
How Many Points Does the Rate Include?
A discount point is a term to describe the fees you pay to the lender at closing. This fee you pay is in exchange for a low-interest rate. Typically, 1 point equates to 1% of the total cost of the mortgage. Ensure that you do ask your potential lender about how many points you get with the interest rate in your quote. Also, ask questions on the benefits of purchasing either more or fewer points.
When Can I Lock in the Interest Rate?
It can pay off in the long run for you to be able to lock in the interest rate on your mortgage loan. Interest rates fluctuate a lot. It can be of great help if you ask your lender for information on locking in the interest rate. Typically, lenders offer higher interest rates for more extended lock periods and lower interest rates for shorter lock periods.
What Are the Estimated Closing Costs?
Factoring in your closing costs of the mortgage loan is also essential, as closing costs are an umbrella term that includes the appraisal fees, origination fee and attorney fees (in some cases), and sometimes more fees. You should ask your lender for a Loan Estimate that indicates the approximate costs of your loan to get your budget straightened out accordingly.
Are There Any Other Fees or Charges I Should Know About?
To be adequately prepared for accepting a mortgage loan, you have to be aware of as much information as possible. Ask the lender in question directly. If there are costs, you should know so that you are not met with unexpected expenses in the long run. To understand the fees, you will be liable to pay. Your lender should supply you with a Closing Disclosure that details the costs related to your mortgage loan.
What Can Delay My Closing?
Purchasing a house is a complex process, and it has many requirements. It includes an intricate and time-intensive process. Delays are typical to experience. However, the best way to avoid delay is to keep in touch with your lender. Ensure that the documentation you give them is as up-to-date as possible, and you submit it at the earliest.
Ask your lender for other tips on how to speed up the process. This will make sure everything goes as quickly and smoothly as possible.
Don’t let anybody rush you into accepting any mortgage loan. This financial product is a long-term investment for your money, so you should have a strong understanding of the pros and cons entirely. There are no short cuts, and rushing through the process will only have you regretting it later! Happy shopping!
More in Loans & Mortgages
Feeling Down in the Dumps? Try Some Laughter Therapy on Netflix!
We could all do with some healthy doses of laughter in our lives, but finding that one comedy that can help...August 17, 2020
Four Ways You Can Get a Loan When You Have Bad Credit
No one wants to get a bad credit rating. But sometimes, things get too tough and your finances suffer the brunt...August 14, 2020
Is a Happy and Engaged Retirement a Myth? Five Ways to Prove Otherwise!
Have you just retired? And wondering how to while away the endless hours that are stretching ahead of you? No sweat,...August 13, 2020
The Ultimate Guide to Helping Your Kid Set Up A Business
Research evidence suggests that children tend to learn faster than adults do. They are creative and spontaneous learners in comparison to...August 12, 2020
Looking for the Best Mortgage Lenders in the Market? Four Tips to Make Your Search Easy!
Are you a first-time buyer? Congratulations, you will soon be a homeowner! We get it. You are apprehensive, pensive, and skeptical...August 11, 2020
James Watson – The Nobel Laureate’s Journey
Wealth, fame, and success stay with no one individual forever. A few are born in wealth, many work hard and earn...August 10, 2020
The Advantages and Disadvantages of a Piggybank Mortgage Loan
The majority of homebuyers find a traditional 30-year mortgage, along with a fixed interest rate, most suitable. But more often than...August 7, 2020
Five No-Fail Ways to Keep Your Business Stay Afloat Amid the Coronavirus Pandemic
The coronavirus pandemic is altering our lives in unfathomable ways. Business owners especially are feeling the brunt. While most owners may...August 6, 2020
How To Enjoy Retirement With A Smile On Your Face
Whenever people talk about retirement, the immediate point of discussion is usually finances. Even the questions often have a financial angle...August 5, 2020