Tag: loan terms

Questions You Should Ask Your Mortgage Lender

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.

3 (More) Questions to ask Your Mortgage Lender

A little research to compare your options for a mortgage, and a few questions in your artillery, will help you get the best one when you work with your mortgage lender.

Previously, we wrote about three questions to ask your mortgage lender before you secure your mortgage–we now have three more questions you should ask to give you even more knowledge and help to secure the best mortgage that you can get. When you are ready to get the best potential mortgage, here are three (more) questions you should ask your mortgage lender.

  1. What are the closing costs that go with this loan? Closing costs usually fall between 2 and 5 percent of the total loan. This range, when factored in with hundreds of thousands or millions of dollars, is big enough to make this question an important one.
  2. Is it an adjustable-rate or fixed-rate mortgage? An adjustable-rate mortgage locks your mortgage for a specific amount of time, and at the end may increase your monthly mortgage rate. A fixed mortgage keeps your interest rates and mortgage payment locked for the duration of the loan but is a bit more expensive than the adjustable-rate mortgage.
  3. What is the down payment that’s required? There exist many kinds of loan types, and not all of them require the same down payment. Make sure to ask what your down payment will be–if it’s less than 20 percent, ask if attaching private mortgage insurance (PMI) will be an additional requirement.

It’s best to put your pride aside and ask as many questions as you possibly can when it comes to something as vital to your life as your mortgage. This thing is going to be with you, potentially, for the next thirty years! Contact  Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.