Are you ready to buy a home? Not so fast, cowboy.
Do you think you’re ready to purchase a home? While the “perfect plan” is a myth, it definitely helps to have some guidelines to assist you along the way. Buying a home is likely the most expensive investment you will ever make in your life, and it is one that will be with you for decades, so being fully prepared is the best way to go about it. Here are some questions you should ask your mortgage lender before you apply for a mortgage.
- What is the interest rate on this mortgage?
Ask to take a look at the lender’s loan estimate which breaks down the contract. It should include the annual percentage rate (APR) which includes: rates, points, fees, and other charges you’ll have to pay for the mortgage.
- How much are the closing costs?
Borrowers pay fees for the services that the lender and other parties provided to you. It is required for lenders to give you an estimate within three days of receiving a loan estimate.
- Will there be any origination/discount points for which I have to pay?
Lenders have the option of charging origination points, discount points, or both. 1 point is equal to 1 percent of the total loan amount. DISCOUNT POINTS reduce the interest rate, and ORIGINATION POINTS are fees by the lender for originating the loan.
- Prepayment penalty
Some lenders charge a penalty if you prepay your mortgage. If you want to pay off your mortgage faster and get rid of that incredible burden, you should know of any penalties that may come.
If you want help with acquiring the mortgage that’s right for you, contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.