The following are some good questions to discuss with your lender when applying for a home loan:
1. Are both fixed-rate and adjustable mortgage loans available?
2. What is the interest rate?
3. How long can I “lock-in” the financing at the current interest rate?
4. Is a float down lock available in case rates drop after I have locked in?
5. What are the other fees a lender may charge me in conjunction with my loan?
6. Are funds for a second mortgage available?
7. On adjustable loans, how often will the interest rate be adjusted?
8. Is there a maximum limit on each rate change?
9. How often will the monthly payment be adjusted?
10. Is there a ceiling on payment adjustments?
11. Can the term of the loan be extended?
12. What is the maximum rate that can be charged over the life of the loan?
13. Is there a pre-payment penalty clause? This involves extra charges for paying off the loan before maturity. About 80% of all loans in the United States are paid off early.
14. How late can a monthly payment be made before a late charge is assessed?
15. If you sell your house, will the new buyer (if he/she qualifies) be able to assume your mortgage at the same interest rate?
16. Do you have to pay “points” to get your new mortgage?
17. Usually lenders charge points for the cost of giving you a mortgage loan. A “point” is 1% of the loan amount, not the purchase price of the home.
18. Will the lender require mortgage insurance (PMI)?
19. Is the loan serviced locally or is the servicing sold?
20. Ask for a written “good faith estimate”.
21. When comparing insurance rates it is important to compare the APR as opposed to the interest rate.
If we can assist you in finding a local lender, please don’t hesitate to Contact Ben Wolfe. Earlier in my real estate career, I was also a licensed mortgage agent therefore, I am much more familiar with the lending process than other real estate brokers.
Would you like to know what our Douglas County Colorado clients are saying about us? Please visit the Client Testimonials area of our website.