When buying a home, there is one person who is just about as important as your Real Estate Agent: your Mortgage Broker! Mortgage Brokers are a wealth of knowledge, so take advantage of that and ask these five questions. Answering these questions will ensure you get the best Mortgage with the best terms possible. Future-you will be super happy that you took the time to get all the mortgage details while buying your home.
What is the best type of loan for me and why?
Knowing what type of loan you’re applying for will help to understand the process and negotiate with your lender. A 5-year fixed-rate mortgage is the most popular option, as it provides stability in interest rates over time. The first decision you’ll need to make is whether or not you want a variable-rate mortgage or a fixed-rate mortgage. A variable-rate mortgage (VRM) is a loan whose interest rate can change over time. A VRM is typically best for someone who plans to sell their home and move within the next five years.
Do I qualify for any particular loan programs or discounts?
You may be surprised that you qualify for special loan programs or discounts. Here are questions to ask your Mortgage Bender to see if you qualify:
- What special loan programs do you offer?
- Do I qualify for any of these programs?
- What discounts are available?
- How much will I save with a discount?
- Do I need to meet any requirements to receive a discount?
- When will the discount be applied?
What interest rate can you offer?
When shopping for a mortgage, you must know what kind of interest rate you can expect. Here are six questions to ask your mortgage lender about interest rates:
- What is the current interest rate for this loan?
- What is the Annual Percentage Rate (APR)?
- How long will this interest rate last?
- Can the interest rate change?
- What would happen if the interest rates went up or down?
- Is there a lock-in period?
Are there any lender fees?
Asking your Mortgage Bender about lender fees is an essential home-buying process. You want to be sure you understand all the costs you’ll be responsible for so there are no surprises down the road. Not all mortgage lenders charge fees. Fees generally are tied to alternative (non-bank) lenders. Here are six questions to ask your Mortgage Broker about fees:
- What are origination, processing, and underwriting fees?
- What are third-party fees?
- How much will I need to pay for appraisal and inspections?
- Are there any other miscellaneous fees I should know about?
- When are these fees due?
- Can any of these fees be rolled into my loan?
What are my closing costs?
When you’re ready to buy a home, you’ll want to know your closing costs. Closing costs are the fees associated with your home purchase that are paid at the closing of your loan. Ask your Mortgage Broker to give you a good faith estimate of your closing costs. This estimate will itemize all of the fees that are due at closing.
Some of the most common closing costs are:
- Appraisal fee
- Home Inspection fee
- Moving costs
- Final Adjustments
- Legal fees
Check out our Closing Cost Calculator at https://themortgageguyniagara.com/closing-costs-calculator/.