When you are looking for a mortgage lender to borrow from to buy a house, there are certain questions you need to ask. These questions will help you narrow down your list of options so you can select the very best one overall. You don’t want to choose just any lender, as this is not something that you want to simply leave up to chance. The more effort you put into finding the right lender, the better of a deal you will get on your home loan.
What Are Your Origination Fees?
One of the most important things that you need to ask any mortgage lender is what their origination fees are. Each lender is going to charge something different, so this is definitely something you must consider. You should also ask about their discount points. The higher this number is, the less interest you will end up paying. Both of these things will play a major role in how much your mortgage ends up costing you overall.
What is the Process for Preapproval?
You also want to find out what kind of timeline you will be looking at when it comes to preapproval as well as closing. This will depend on your own specific priorities and goals when it comes to buying a home. You have to make sure that both your timelines are in sync before moving forward. Ask the lender what exactly they need from you to complete the preapproval process. When it comes to closing, ask them where it is going to happen and whether they coordinate with an outside law firm or do it all in house.
What Kind of Down Payment do I need to make?
Not all mortgage lenders have the same requirements when it comes to down payments, so this is something you need to find out right away. A down payment of 20% is ideal but not necessarily required. Some lenders have stricter requirements than others when it comes to this particular issue.
You should find out what sort of down payment you will be expected to make so you know whether or not the lender is a good match. These days some lenders only require as little as three percent down. Keep in mind that the lower your down payment, the more interest you are likely to pay on your loan.
Can You Offer me Any Assistance with my Down Payment?
Some lenders participate in programs that are designed to help borrowers with making their down payments. It’s always good to look for one of these lenders, especially if you think you will need this sort of help. This could help you save quite a bit of money on your down payment, so it is certainly worth looking into.
How Do You Keep in Touch with Your Borrowers?
It’s important to find a lender that makes a point of staying in contact with their borrowers, giving them important notifications when necessary. Will the lender send you a traditional letter, email, or text message? The better they are at communicating with borrowers, the better things will be for you.
What is My Monthly Payment Going to be?
You need to know what the final amount for your monthly mortgage payment is going to be. This is called an estimate, and it’s something that any lender can give you fairly easily. It will give you an accurate idea as to whether or not you can afford to borrow from the lender. Make sure that they include interest and any other fees. When you are trying to decide if you can afford the loan, don’t forget to factor in all of your other expenses. This includes property taxes, utilities, and everything else.
How did You Arrive at this Interest Rate?
When the lender tells you what the interest rate on your loan would be, make sure that you ask them exactly how they got that number. Their answer will tell you a lot about them, including just how reasonable they are. There are many different factors that a lender takes into consideration when calculating a borrower’s interest rate. It is important for you to learn all about this before asking them this question.
If you are ready to buy a home but haven’t selected a lender to borrow from yet, you will need to ask all of these questions. Make sure that you approach a few different lenders before settling on one to apply with. Submitting too many home loan applications in a short span can damage your credit. This is precisely why it is a good idea to prequalify. It will give you a good idea as to whether or not you will be approved for the loan you need. You will also find out what kind of rate you can expect from the lender.