9 Questions Your Should Ask Your Mortgage Lender Before Buying a Home
1. How much can I borrow to buy a home?
The top 3 factors your lender will consider when determining how much you can borrow are your income to debt ration, employment status and credit history. It is a great idea to talk to a lender before talking to a realtor and going out to look at homes. This way you will not be disappointed when you realize you cant afford the home you fell in love with.
2. How much money do I need to put down?
Typically on a Conventional loan it is required you put at least 20% down. However, there are types of loans that do not require the full 20%. Talk to your lender and ask about all the possibilities, they will be happy to help.
3. What’s the interest rate?
When you first start, you should ask your lender for a direct interest rate quote, as well as the corresponding annual percentage rate (APR) for the loan. Shop around until your find a rate that your find suitable.
4. How many points does the rate include?
A point is a fee paid to the lender at closing in exchange for a reduced interest rate. (1 point = 1% of your total mortgage amount.)
5. When can I lock in the interest rate?
Interests rates tend to fluctuate regularly, so locking in a good, low rate is important. Ask your lender about when you can lock in and the advantages of locking in for a longer or shorter amount of time.
6. What are my estimated closing costs?
Your lender should provide you with a Loan Estimate form showing the approximate costs of your loan so you can budget accordingly. Some fees associated with closing are: attorney fees, loan origination fees and title fees.
7. Are there any other costs or fees I should know about?
Your lender should provide you with a closing disclosure statement that will lie out all of the fees you should be aware of.
8. Can you estimate when the closing will be?
Ask your lender for a date when they estimate closing will be. Be in mind that many things can pop up and delay a closing but your lender and real estate agent should make it their top priority to close on time.
9. Is there anything that could delay my closing?
There are many different factors that can delay a mortgage. The best way to keep everything on track is to stay in touch with your lender and make sure all your documents are correct and submitted on time. Also, stay in contact with your real estate agent through the whole process. A seasoned agent will keep you informed throughout.
If you have any questions or need any recommendations for great mortgage lenders, contact us here!