Considering A Mortgage Loan? Check Out The Most Frequently Asked Questions
Whether you're looking for homes for sale in Austin, in another part of Texas, or anywhere else in the nation, take control with the answers to these frequently asked questions. Applying for a home loan can be a daunting task – it's a lot of money, and you're honored that they'll consider you, right?
In fact, the lender needs you as much as you need them, so you should reasonably expect to have a mutually respectful interaction with your lender. The following FAQs can help ensure the success of your loan when you're looking for homes for sale in Austin, Texas, or anywhere else.
1. Which type of mortgage will work best for my needs?
This is one of the most important questions you can ask, and it can save you thousands of dollars on your mortgage. Most lending institutions offer the following types of mortgages:
Each of the above has advantages over the other, and your lender should be able to explain them.
2. Do you have any special programs that may benefit me?
Periodically, lenders and the government will make special offers available to prospective customers, and one or more may help you.
3. How much of a down payment will I need?
Not all types of mortgages will require a 20 percent down payment, but most of them require some amount down.
4. What type of documentation will I need?
When you apply for a mortgage, you'll need the following documentation:
Make sure you are asking the lender if there is any other documentation they might need as well.
5. Are your mortgages approved in-house, or do you send them to an underwriter?
It's sometimes easier to get approved from lenders who approve in-house, especially if you have unusual circumstances or if there's a problem.
6. What fees do you charge, and how much are they?
Fees vary substantially between lenders. Be sure to shop around for the best prices on fees.
7. How much will closing costs be?
Closing costs add substantially to a loan, so you need to know how much money you'll need when you close.
8. How much will my monthly mortgage payment cost?
You'll need to know how much house you can afford.
9. Do you charge a loan origination fee?
Banks charge origination fees to cover the cost of processing the loan. They may be negotiable but you need to know if that is something they will be charging you or not.
10. Do you have a rate lock policy, and if so, how does it work?
Borrowers want to lock in their rate, but the lender may not. Ask the following questions about their rate locks:
-Is there a fee to lock in my rate?
-How long will the lock last?
-Is there a fee to extend the rate lock?
-Will I have the rate lock in writing?
11. Is there a prepayment penalty?
Not all states allow prepayment penalties, so be sure to ask your lender if they charge for prepayment of a loan, so you are not surprised if your state is one that allows it.
12. How do you calculate interest rate adjustments for an adjustable-rate loan?
Adjustable-rate loans are often better options for those who plan to sell in the near future. Ask your lender the following:
-How often do you adjust rates?
-Will I get a notice when it's going to be adjusted?
-Is there a limit to the amount it can be raised?
-If rates go down, will my rate go down?
13. Am I likely to be approved?
If your lender indicates that they think it's unlikely that you'll be approved, you can pursue other avenues, such as trying a different lender.
14. Once I've been pre-approved, how can I preserve it?
If you've been pre-approved, then don't make any financial changes – such as buying a car – until your loan has closed.
15. Do you have references?
It may seem an odd question, but real estate agents can regale you with many horror stories about mortgage brokers. You should always receive high-quality service from your lender.