Posted by admin on March 26, 2018
5 Questions You Should Ask About the Mortgage Process When Buying a Home
When buying a new home, chances are good that you won’t be making a single cash payment for the full amount. Instead, you will be signing a mortgage that allows you to pay for your home over time. Mortgages can be tricky to understand, but you should be sure that you know the basics of yours in order to get a fair and affordable deal on your new home. When meeting with your mortgage lender, make sure to get answers to these five essential questions.
1. What is the APR?
The APR is the annual percentage rate, or interest on the mortgage. This amount is paid off as part of your scheduled payments over the course of the mortgage. The lower the APR, the less you will pay in the long run.
2. How are taxes and insurance handled?
Some lenders require taxes and insurance to be covered on a yearly basis, while others want them to be paid monthly. Make sure you know which your lender prefers so you can factor it into your budget.
3. What is the payment penalty?
Unexpected things happen, so you should know what to expect if you are late one month on your mortgage payment. Likewise, some lenders institute a penalty for paying off your mortgage early and bypassing some of the interest.
4. Who Services the Loan?
The person who approved your loan may not be the person you send a check to every month. This isn’t necessarily a problem, but it’s a good idea to know who you will be dealing with when making payments.
5. How Can I Maximize My Chances of Loan Approval?
Loan officers take a number of things into account when deciding whether or not to approve your loan. Don’t jeopardize your chances by changing jobs, moving a lot of money around, or carrying a large credit card balance shortly before asking for the loan.
Armed with the answers to these questions, you can make a more informed decision when signing for a home mortgage.