Ask the right questions before signing a mortgage
One of the biggest decisions you’ll make is when you sign a mortgage. But before you sign the mortgage, there are a few important questions you should ask your mortgage lender, so that you do not end up with unwanted surprises.
In the article, “ Signing a Mortgage? Ask the Right Questions First!” released on affordableconcretecutting.com, the writer provides essential questions you should ask your lender before signing any mortgage documents.
Answers to these questions may change your mind as to which mortgage you should sign for. If they do not change your mind, they will further support your confidence that you are making the right decision.
The first thing you will want to know is how long the mortgage application will take. It usually takes 45 to 60 days. Sometimes it may take only 30 days and sometimes much longer.
Next, you will want to know what documents you will need to process the mortgage. “A certificate that verifies your total income and your assets will be necessary to get a home mortgage loan. However, lenders ask for different documents, so it depends on which lender you choose.”
You should know how much your down payment will affect your mortgage loan. “First, finalize the down payment amount on your home mortgage loan. Based on this your lender can offer you a range of interest rates, loan terms and perhaps even not require private mortgage insurance. While some loans demand a 20 percent down payment; others are much lower than that.”
One of the most important things you will want to know is the how much mortgage interest you should expect to pay. Ask your lender for their annual percentage rate (APR), do the same for at least two other lenders, and compare.
The next question you should ask your lender is about the expected amount of origination fees. “Origination fees are usually paid as prepaid mortgage interest on your entire home mortgage loan. Your lender could ask you to pay this in points at closing time just so that you get a lower interest rate on your home mortgage loan.”
You should ask if the interest rate can be locked-in at any time during the application process. You may be charged fees to lock-in an interest rate, but if it is an available option, you should do it.
Even if interest rates stay the same or even drop, you would be paying for piece of mind, because if the rates rose and you were not locked-in, you would end up paying thousands more on your mortgage.
“Are there prepayment penalties on the mortgage? This is an important matter for mortgage home loan shoppers to consider. You need to know the duration of the penalty period and how the prepayment fee will be calculated. While some prepayment penalties stand at only one percent of the loan amount, others aren't as easily calculated.”
Finally, you should ask if you should expect delays during the approval stage. Incorrect or missing information could significantly delay the process.
These are just basic questions to ask. But you may be surprised to find that the answers you receive will lead to other questions and maybe lead you to a different lender.