November 25th, 2018 7:53 AM by Jackie A. Graves
Before you commit to a
lender, ask these ten questions of your potential mortgage broker. If you don't
like the answers you receive, continue shopping for a loan until you find a mortgage broker/lender
with whom you feel comfortable.
provide you with accurate information, your mortgage loan officer needs to find
out more about you. Don't be afraid to share all of your personal information,
including permitting the lender to run your credit report. Remember, the more
your lender knows about you, the better advice and assistance you will receive.
lenders will find out more about you before throwing out loan options. You
wouldn't expect a doctor to suggest surgery before she assessed your medical
situation, would you? Choose a lender that gathers enough information from you
before recommending a particular type of loan. Don't be afraid to ask a lender
to explain the pros and cons about:
2. What Is the Interest Rate and Annual Percentage
annual percentage rate (APR) is derived by a complex calculation that includes
the interest rate and all the other related lender fees divided by the loan's
term. However, bear in mind that:
your interest rate is adjustable, ask about its:
"point" is equal to 1 percent of the loan amount. Therefore, 2 points
on a $100,000 loan cost $2,000.
the costs of a loan include not only fees that go into the lender's pocket but
also related third-party vendor fees such as:
estimate of these fees constitutes what is now called the Loan
Estimate, which federal law requires the lender to give you.
are required to give you a loan estimate, accurately containing all of the
costs of your loan. Lenders are required to deliver the loan estimate when an
application has been completed. The following six items are typically required
to be received first:
6. Do You
Offer Loan Rate Locks?
rates fluctuate and change daily. If you have reason to believe that interest rates are
moving up, you might want to lock your loan. Lenders
typically charge zero to one point to lock a loan rate and points. Ask your
alternative is to pay the prevailing rate and points on the day your loan
some states, prepayment penalties are no longer allowed, so ask. Typically, prepayment
penalties let the lender collect an additional six months of
"unearned interest" if you pay the loan off early through a refinance
or sale of the property. Be sure to ask:
loans and issue conditions before approving or rejecting a loan.
loan processing time periods fall between 21 and 45 days. To properly write a purchase
contract, you need to include a closing date, and that date should
be coordinated with your lender. Find out:
big issue is closing your transaction on
time. Your purchase contract will contain a date to close escrow,
but that date is generally subject to the lender's ability to close on time. If
the lender cannot close on time, that could mean extra costs or problems for
the buyer, such as: