Lenders are not the same. So, you must choose the one that fits your needs the most before proceeding with the loan process. Asking questions to a lender should always be your first step, but knowing the answers to these questions makes you more likely to succeed.
Below are some of the questions you should ask when choosing a mortgage lender.
Which mortgage type is ideal for me?
There are multiple programs out there that may be appropriate for you, and asking this question will allow you to know which type of mortgage fits you most. It’s important to discuss your options.
Aside from a mortgage lender, you can also talk it out with your financial adviser Kent. A financial and mortgage adviser who is local to you can clearly discuss the perks and drawbacks of each type of mortgage. The types of mortgages are conventional fixed-rate mortgages, FHA loans, adjustable-rate mortgages, and VA loans.
Am I qualified for any down payment assistance programs?
Make the most out of your search by asking this question. Ask a mortgage lender if you qualify for any down payment assistance programs. If you receive a groan or a chuckle as a response, you may choose to move on. A good mortgage lender knows local, national, and state down payment assistance programs. They will also be willing to help you throughout the process.
How much will I need for the down payment?
The majority of lenders require a 20% down payment, but you can also find those who allow as low as a 3% down payment or none. Of course, every down payment option has pros and cons you need to consider. A good lender will be patient to walk you through all the best options.
What is the interest rate?
It is an important question you should ask a mortgage lender. Be straightforward and ask for an interest rate quote directly from your lender. Aside from that, ask for the loan’s annual percentage rate. This way, you’ll easily compare it with other lenders.
Don’t be shy to look into all your options to find the best one that suits you. In exchange for a discounted interest rate, a lender might accept a fee called a “discount point” at closing.
Do you offer prequalification or preapproval?
Most financial professionals utilise the words prequalification and preapproval synonymously. However, these two terms are different.
Loan preapproval covers the entire loan amount you’ve been approved for and is required to make house bids. The lender verifies your credit file, down payment, financial paperwork, and other facts as part of the preapproval procedure. On the other hand, loan prequalification depends on the information you provide to a mortgage lender that is still to be verified. It includes your credit score, income estimate, etc.
These two are essential steps you should take when applying for a loan. So, don’t miss asking this question to the lender.
Things will be less stressful and difficult if you ask these questions to a mortgage lender ahead of time. Understanding what you will get into can help you determine if an option is the most suitable.