Questions for your Lender
Getting pre-approved is a critical part of the purchase process, and you need to do this early on so that you will know how much you can actually afford. The pre-approval process will also make you aware of any credit problems that need to be addressed, if any, so you can take care of them before actually trying to obtain a mortgage; some issues will prevent you from getting a loan, so you want to know about these problems right away, as well as errors on your credit report, which are not uncommon.Here is a list of some questions to ask your lender.
This is not, by any suggests that, Associate in Nursing all-encompassing list.
- Are both fixed-rate and adjustable mortgage loans available?
What is the interest rate? - How long am I able to “lock-in” the my interest rate?
- Is a float down lock on the market just in case rates drop once I even have barred in?
- What are the other fees a lender may charge me in conjunction with my loan?
- Are funds for a mortgage available before closing or have to wait for the bank to deposit?
- On adjustable loans:
– how often can the rate of interest be adjusted?
– Is there a most limit on every rate change? IF your loan is ARM
– however usually can the monthly payment be adjusted?
– Is there a ceiling on payment adjustments?
– will the term of the loan be extended?
– what’s the most rate that may be charged over the lifetime of the loan?
– Is there any potential for negative amortization? - Is there a pre-payment penalty clause? This involves further charges for paying off the loan before maturity. Eightieth of all loans within the
United States area unit paid off early. - What’s the “grace” period?
- How late would a monthly payment need to be before a late charge is assessed?
- What is going to happen if a payment is missed?
- If you sell your house, can the new client (if he/she qualifies) be able to assume your mortgage at identical interest rate?
- Does buyer have to pay “points” on a new mortgage? typically lenders charge points on the amount of real estate loan. A “point” is eighteen of the loan.
- Will the lander need mortgage insurance?
- Is that the loan serviceable in-house (by your lender) or is that the service outsourced? And if it’s sold or transferred, once closing will that occur?
- Ask a written “good faith estimate”.
There is more information on the loan process and related matters in the Buyer Reports section of my website.
This entry was posted in Mortgage info.
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