If you process of finding a mortgage there are three important questions you need answered. Here are the questions you need to quiz your lender on. Mortgages can be the most intimidating aspect of home ownership. As a homeowner it is easy to second guess your decisions; part of choosing the right mortgage is knowing the right questions to ask. Here are the questions you need answered. Does This Mortgage Have a Prepayment Penalty? Dont accept a mortgage with a prepayment penalty. Plain and simple, unless you have really bad credit your should be able to negotiate for a mortgage that does not have a prepayment penalty. Prepayment penalties serve to boost the lenders income if you refinance or sell your home. In todays mortgage market lenders are having to concessions in order to remain competitive. Because of this much of your mortgage is subject to negotiation. Do not settle for a loan with a prepayment penalty unless you absolutely have to. Accepting a loan with this penalty could cost you as much as six months worth of interest on 85% of the original loan balance if you refinance or sell your home. Will the Lender Guarantee the Interest Rate? Interest rates fluctuate on a weekly basis. The rate your lender quotes you could easily change from one day to the next. Ask your mortgage lender to lock in the interest rate quoted to you. Make sure the lender grants you enough time to close on the mortgage and that there is no fee for guaranteeing this interest rate. While youre at it, ask the lender to lock in the points required to secure the guaranteed interest rate. What Documentation is Required? You want to close on the mortgage as quickly as possible to ensure you do not lose the guaranteed interest rate. Documentation is one aspect of the loan that could delay your closing. If the lender requires an appraisal or a survey make sure you have all of the required documentation in hand well before closing. If you are unable to provide all the necessary documentation before the expiration of the lock period you could lose your ideal interest rate. To learn more about finding the perfect mortgage, sign up for a free mortgage guidebook. |
