5 Questions to Ask Your Mortgage Lender Before You Start Your House Hunt
Wednesday, August 12, 2020, 6:00 AM | Leave Comment
When you are ready to shop for a new home, organize your financing plan first.
That way, when you find the house of your dreams, you will be ready to make an offer and have your financials in place.
Here are five questions to ask a mortgage lender when commencing your housing search.
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What Are the Best Mortgage Loan Terms for My Budget?
A mortgage lender can discuss the loan products available that will fit your home mortgage needs. Depending on your short-term and long-term budgetary goals, you may be more interested in a fixed interest rate rather than a variable rate. You might also want information about an ARM loan if you expect your finances to improve over the next couple of years. Information about the length of the loan and payment amounts on various mortgages can also be discussed.
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What Is the Lowest Interest Rate Currently Available?
Interest rates are fairly standard based on the Federal Reserve rate. However, a certain amount of flexibility may be offered based on your credit history and whether you are willing to have monthly mortgage payments withdrawn directly from your checking account. Ask the lender about interest rate options for the mortgage loan you would like to apply for.
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What Will Happen if I Miss One or More Payments?
In uncertain economic times, people can easily miss one or several mortgage payments. It is important to know when applying for a loan what to expect if you happen to fall behind. The lenders will want you to keep in touch with changing financial situations and will try to work with you to avoid any financial penalties if possible. Find out the terms and conditions of the specific loan options of interest.
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Is There a Prepayment Penalty?
Most home loans are based on a repayment plan that extends over ten, fifteen, or thirty years, but the repayment schedule can be extended under certain conditions. However, many homeowners prefer to pay off their home mortgage loan sooner if possible in order to be free of the monthly payment as well as avoid paying excess interest. Some mortgage lenders charge a prepayment penalty while others do not. Find out if the loan you want will charge a prepayment fee if you are thinking of paying off the loan early rather than paying the full period of time.
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Can I Get Prequalified as a Buyer?
Prequalification by a lender examines your financial credentials and indicates by letter that you are preapproved for a mortgage loan and ready to purchase a home within certain financial parameters. Sellers like to work with these buyers to save time when finalizing and closing the deal.
Discuss your mortgage interests and concerns before shopping for a home. That way, you will be prepared to look for the house you want and can afford.
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