When you’re ready to start shopping for a home, one of the first things you’ll need to do is contact a mortgage lender. They will be able to help you with the mortgage application process, which will be the stepping stone to your dream house.
But before you start the process of applying for a mortgage, it’s important to ask the right questions. Here are key questions to send over to your mortgage lender:
1) How Much Money Can I Borrow?
How much money can be borrowed will probably be the most important question on your mind when you’re considering applying for a mortgage. Your mortgage lender may be able to give you a general idea of how much money you’ll be able to borrow based on your income, debts, and credit score.
2) How Much Money Should I Put Down for a Home?
The amount of money you’ll need to put down for a home can vary based on the type of loan you’re getting. For example, if you’re getting a conventional loan, you may be able to put down as little as 3%. However, you may be required to put down 3.5% or even more with an FHA loan, while others may require 10% to 20% more.
3) Are There Any Downpayment Assistance Programs?
A mortgage lender may have connections to various downpayment assistance programs available, so it’s best to know in advance. It is possible to find one through your state, county, or city government or a program through a nonprofit organization or your employer.
4) What’s the Interest Rate for a Loan?
Interest rates can vary based on a variety of factors, including the type of loan you’re getting, your credit score, and the length of the loan. Some lenders may offer a lower rate if you agree to pay for points, which is an upfront fee that you can use to lower your interest rate.
5) Is the Rate Fixed or Adjustable for the Mortgage?
If you’re getting a fixed-rate mortgage, your interest rate will remain the same for the entire term of your loan. Meanwhile, with an adjustable-rate mortgage, your interest rate may change periodically depending on the market, which can either raise or lower your monthly mortgage payment.
6) Are There Additional Fees to Keep in Mind?
In addition to the interest rate and points, you may also be responsible for other fees, such as appraisal, origination, and title insurance. Being fully aware of how you will finance the mortgage is key, so make sure you know what you’re getting into and ask your lender to explain any additional fees and charges.
7) What Are the Closing Costs Estimate Like?
The closing costs of your mortgage are the fees and expenses you’ll need to pay when your loan is finalized. A lender should give you an estimate of your closing costs when you apply for a loan, so you’ll know what you need to shoulder upon completing the mortgage deal.
Asking your mortgage lender the right questions can help ensure that you’re getting the best possible deal on your loan. Be sure to ask about the whole process of applying for a mortgage and make a fully informed decision.
Seeking a mortgage lender? Total Lending Concepts is a hometown mortgage lender in Columbia, MO that offers different home loans to fit every situation. Get in touch with us now!