Applying for a mortgage loan is a lifelong commitment. A mortgage lender is your great resource in identifying which type of loan you should apply for.
Before committing to a loan, you should first know the lender. To do that, you need to know them and what they can do for you. Here are questions to ask your mortgage lender.
What Loan Type is Suitable for Me?
There are different loan types available. Each type has its pros and cons. Any reputable lender aims to know you more first before suggesting loan options.
Choose a lender who provides you with enough info before making any recommendation. This kind of lender has your best interest in mind and will help you pick the most suitable loan for you.
The lender should be able to explain the pros and cons of each loan option. They should also be able to tell you why it is suitable for your situation.
How Much Downpayment Do You Require?
The most common answer to this is 20% of the property’s total purchase price. But, not all lenders require this amount. There are those who may ask for less than 20%, even up to 3% or none at all. This will depend on your qualifications and the loan’s features.
As always, going with one option has its benefits and downsides. For instance, lenders generally offer low-interest rates for those with a 20% downpayment. Ask your lender about these details.
How Much is the Interest Rate and the Annual Percentage Rate?
The rates are among the most important questions to ask your mortgage lender. Keep in mind that different lenders have different rates. They also have different ways to compute these figures. It is always best to ask the specifics with your lender.
What Are All the Costs Involved?
There are costs associated with the entire process. These include lender’s fees, appraisal fees, credit reports, and taxes, among others. You need to know how much these costs are.
Under federal law, a mortgage broker is required to give you a Loan Estimate document. This is where you can find all the estimates of the costs involved. Get this document before applying for a loan.
How Long is the Loan Term? Is There a Prepayment Penalty?
The loan term refers to the period of time you will be paying the mortgage regularly. Knowing how long the term is will help you prepare your finances.
You incur a prepayment penalty if you pay the entire loan amount before the predetermined schedule. Some states do not allow prepayment penalties. But, it is always best to ask your lender about their own policy.
Don’t Limit Yourself!
These are not the only questions to ask your mortgage lender. If you are unsure of any detail, ask. Request for clarifications on things you might think you already understand, if necessary.
Do not be afraid to shop around for lenders if their answers to these questions do not satisfy you. Keep in mind that your choice will have a significant impact on your finances.
If you need more info about mortgage loans, don’t hesitate to contact Ranieri Team. Our experience and savvy in the industry allow us to be the right resource for you! Get in touch now!