Congratulations! You’re ready to buy a new house.
Whether this is your first home or you’re upgrading, a mortgage lender is necessary for your big purchase. You want the right lender who will be there to answer all your questions and work to get you the best deal.
But finding that right lender isn’t always easy.
Before you choose a mortgage lender, there are some questions you need to ask them. Read on to learn the top six questions to ask.
1. Which Loan Is Right for Me?
There are a number of different mortgage loans available and it can be overwhelming to find the right one for you.
The best mortgage lenders understand different loan options and will consider your qualifications and needs. Based on their research, they can easily suggest a few options.
Some of these options include:
- Conventional loans
- FHA loans
- VA loans
- USDA home loans
Once your lender supplies you with their recommendations, you can learn more about the different options best for you.
2. What Is My Interest Rate?
Once you decide on the right mortgage loan, ask your lender about the interest rate.
The interest rate can heavily impact your monthly and overall payment amounts. Your lender will provide an interest rate after considering your credit score and financial history.
This is also the time to find out if your mortgage is a fixed-rate or adjustable-rate loan.
3. Will I Pay Mortgage Insurance?
You’ll likely pay mortgage insurance if you make a down payment of less than 20 percent.
Most lenders will add this insurance payment to your monthly mortgage payments. So if you don’t want the extra charge each month, talk to your lender about making a larger down payment.
4. How Much Is My Down Payment?
Speaking of your down payment amount, this is an important question to ask before you agree to a mortgage.
Unless you’ve got large amounts of money sitting around, odds are 20 percent is a large down payment. Sometimes that amount is just not feasible.
Different mortgages come with different down payment requirements, some as low as 3.5 percent.
5. What Is My Monthly Payment?
If you calculated your monthly payment based on your purchase price, odds are you’ll get sticker shock when your first payment is due.
Ask your lender for a final monthly payment amount. Don’t forget that interest, mortgage insurance, property taxes, and even homeowners insurance are commonly added to your payment.
6. What Closing Costs Are There?
On top of the down payment, most mortgage lenders also require you to pay closing costs.
These are third-party costs that come with the home-buying process. Think appraisals and title work. Ask your mortgage lender ahead of time what costs to expect so you can save for the expense.
Choosing the Right Mortgage Lender
Now that you know what questions to ask your mortgage lender, you can choose the right lender for you.
When choosing your lender, also keep in mind their location, experience, and mortgage lender reviews.
If you’re looking for a mortgage in central Indiana, request a quote today and quickly move into your new home.