From looking through endless paperwork to searching for the best possible loan terms, purchasing a home can be as mentally taxing as trying to find a needle in a haystack. Channeling your energy into finding the perfect home is way more pleasurable than having to suffer through potential lenders and loan applications. Here are some questions you should ask your mortgage lender before you go shopping for the home of you dream that should get you started on the right foot.
What are the “other” costs associated with this loan? Closing costs typically fall within 2 and 5 percent of the total loan. You have to know where the closing costs lie to know you’ll have a better idea of what you can afford and provide you with a possible price range. Also find out how the penalties are calculated if you break your mortgage early. Specifically, ask what rate they use to calculate the “interest rate differential”. Typically, if the lender has “posted rates” they use these to calculate the penalty.
What is your process for preapproval and closing? Make sure the lender’s timelines line up with your home buying target. Understand when they will pull your credit score. What information will your lender need to preapprove you for a home loan? Ask how long the preapproval will be valid. Ask about the lender’s closing process. Where will it take place? Do they work with a particular law office or do they do it in house? Some lenders may offer a closing at your home or even online. Are points included in the quoted interest rate? Point here refers to the amount paid to reduce the rate on the loan. Knowing this number is important to clarify whether the quoted interest are the quotes, or how long they will last so you can think it over.
What is the required down payment? A variety of loans and not all of them require the same downpayment. Make sure to ask how much you will be required to put down. Your minimum down payment will depend on the type of loan your lender recommends for you. Talk to your lender about what you have saved, how much you’d like to put down and your goals for a monthly payment.
If you are planning to sell your home, let The Incorvaia Team make the process as easy as possible for you. Call us today!