Taking a mortgage is a substantial financial commitment, and you need to be sure that you’re making the right choices before you make the leap. The best way to do so is by getting all the relevant information regarding the mortgage you are about to make.
If you’ve already identified a reputable home loan company in Guilford you’d like to work with, here are some relevant questions you’ll need to ask them before making a commitment.
What loan program would you recommend?
There’s a variety of different loan programs in the market. A top lender will first find out as much as they can about you before they suggest a loan program that is most suited to your needs. Ask your lender to explain the benefits of a fixed rate loan and its disadvantage.
Inquire about adjustable rate loans too, as well as interest-only loans. From the information you gather, you should find it easier to choose wisely.
What are the total costs?
Every mortgage includes fees that will not only go to the mortgage lender’s pocket but also other third parties as well. These third-party vendors include taxes, appraisal fees, lenders title policy, credit report expenses, recording fees, inspection reports and so on.
Your lender is required by federal law to disclose these fees, which are referred to as the loan estimate. Knowing the total amount of money you’re going to pay helps you as you do the budget.
Can you guarantee a timely closing?
One of the most significant issues when it comes to the loan application process is the closing time. Generally, you want to work with a mortgage lender with the ability to close the transaction on time; otherwise, you’ll need to pay extra costs.
If the escrow date expires, for instance, you can be charged more interest. It could also mean more costs paid to movers so that they can reschedule. To avoid these problems, it’s best to work with a lender with an excellent history of closing on time.
Do you charge a prepayment penalty?
Currently, some states do not allow prepayment penalties. In others, lenders can charge you six months of unearned interest for early payment through a sale of the property or a refinance. Ask your lender regarding this before taking the loan.
If your lender charges a prepayment penalty, then ask how much it is. Inquire what the terms of the prepayment are as well and whether the penalty would still apply if you refinance through them at a later date.
What time do you take to fund?
On average, the mortgage processing time takes between 21 and 45 days. Before writing a purchase contract, the closing date needs to be included. That’s why you need to work with your lender to find out their anticipated turnaround time and what issues could hold up the closing.
The best way to make good decisions when applying for a mortgage is to ask your lender the right questions. If you like the answers you receive from a particular lender, you can move ahead with the process.