Mortgage Lender – Buying a home is like getting married. There is a long-term commitment and a lot of money involved, and as such, it’s not something you should enter lightly. The same goes for your mortgage lender, who will be the gatekeeper of that money, and who has the power to make your home-buying process relatively painless or utterly horrible. Because of this, you need to choose your mortgage lender carefully, and why you need to get the answers to these five questions before pulling the trigger.
1. What are closing costs?
Closing costs, when not paid by the seller, are usually embedded into the loan, which means you will pay interest on them if you don’t pay cash during closing. You want these to be as low as possible and need to ask this question immediately. If the lender hesitates to disclose them or gives you the runaround, you need to drop them and move on.
2. Will my interest rate change?
Unless you intentionally pursue a balloon rate or variable rate loan, you should expect to have a fixed rate loan for your payment period. Ask your lender about this to ensure you aren’t surprised years after the purchase.
3. Will my loan be sold?
It’s common practice for lenders to buy and sell mortgage notes, but it’s still something you should know about. For example, if your lender commonly sells notes to another bank with a history of poor customer service, this should be cause for concern, or at a minimum, a bit more due diligence.
4. How much do I need to put down?
Sometimes you can find a 100% loan, while you might need to put as much as 20% down in other cases. Even though you can’t control this, it’s nice to have options, so ask the lender how much they require as a down payment. If you ask several lenders, you might find one that requires less upfront, which will help you keep money in the bank.
5. Can I buy down the rate?
Many lenders will let you buy down the mortgage interest rate by paying additional closing costs. While this isn’t always a smart move, if the numbers work out over the long term, then you should consider it. Even a tenth of a percent makes a big difference over several decades. Check More
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