April 22nd, 2016 5:50 AM by Jackie A. Graves, President
ready to buy a home? Make sure you ask these 10 key questions at mortgage
for the lender's loan estimate, which breaks down the interest rate and fees.
It will include the annual percentage rate, or APR, which accounts for the
interest rate, points, fees and other charges you will pay for a mortgage.
may charge discount points, origination points or both. One point is equal to 1
percent of the loan amount. For example, if you get a $162,000 mortgage and pay
one discount point, you'll pay a fee of $1,620, because that's 1 percent of
$162,000. (Divide the loan amount by 100 to calculate 1 percent.)
pay fees at closing for services provided by the lender and other parties, such
as title companies. Lenders are required to provide a written estimate of these
costs within three days of receiving a loan application.
rates might fluctuate between the time you apply for a mortgage and closing. To
prevent getting a higher rate, you can lock the rate, and even the points, for
a specified period. Fees may apply, but not always. To keep tabs on rate
movements, read Bankrate's Rate Trend Index.
lenders charge a penalty if you prepay on the mortgage. Some apply only when
you refinance or reduce the principal balance by more than a certain
percentage. Find out the penalty specifics and see if your lender will lower
the rate on loans with one.
bigger down payment might mean a lower interest rate and better loan terms.
With a down payment of less than 20 percent, you will probably have to get
mortgage insurance, increasing your monthly payment.
about requirements relating to your income, employment, assets, liabilities and
credit history. Qualifications for first-time homebuyer programs, Veterans
Affairs loans and other government-sponsored mortgages are typically less
require proof of income and assets, including bank statements, tax returns, W-2
statements and recent pay stubs. More may be needed to show your down payment
and ability to pay closing costs.
on how busy the lender is, it can take as little as two weeks or as long as 60
days. Be patient and forward any requested documents quickly to speed up the
job change, an increase or decrease in salary, a new debt, a change in your
credit history or change in marital status could delay your loan approval. The
best way to avoid that is to put your financial life in a holding pattern until
you reach the closing table.
Janna Herron - To view the original article click here