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What Questions Should I Ask A Mortgage Lender?

By Ann White

Knowing important questions to ask a mortgage lender can save the borrower money and maybe even financial ruin in the long run.

When seeking money for a mortgage, may people don’t have the slightest idea about what they should ask a mortgage lender. Knowing the right questions to ask can help the borrower know which lender is right for them.

Know Your Credit Score

Borrowers should always know their credit score before dealing with a lender. The better the credit score, the lower the interest rate should be. If a buyer has an excellent credit score, adequate income and low debt, there is no need to accept a loan at a high interest rate. So ask your mortgage lender how your score is affecting your interest rate and the amount that can be borrowed

How much to Borrow

The first thing a borrower should want to know is how much money do they need to borrow. They should take a look at how much they can afford to pay for the house and also the size of the house that is needed. Many borrowers have gone into foreclosure because they bought a big house that they simply could not afford. One way to calculate how much a person can afford to borrow is to use a mortgage calculator which is available on various real estate and lender sites. You type in the essentials such as the price of the house, your down payment and so on. The mortgage calculator will then tell you what your monthly payments will be. This should also be discussed in detail with the lender.
When figuring out the monthly mortgage payment, taxes and insurance must also be figured in to the number. These items can add up to a hefty sum. The borrower should make sure they know if the payments are included in the mortgage payment or they must pay these items separately. The borrower must also remember that closing costs must be paid at the beginning of the loan.

What are the Terms of the Loan

It’s hard to believe but some homebuyers sign the loan papers without knowing exactly what the terms of the repayment of the loan will be. For example, when a borrower signs off on an adjustable rate mortgage, they should realize that the interest rate on these mortgages can change, therefore their monthly payment can change. If a borrower wants to know exactly what their monthly mortgage payment will be for the life of the loan, they should go for a fixed rate mortgage. And in the case of interest only payments at the beginning of the loan, some borrowers are shocked an dismayed when a balloon payment becomes due
Borrowers should also remember that there are closing costs, which are fees for such things as processing the loan, appraisals, etc. A borrower should know what these fees are as they can be expensive.

Related posts:

1. What Questions Should I Ask A Mortgage Lender?
2. What Will A Lender Look At When I Apply For A Mortgage?
3. When Is A Mortgage Lender Required By Law To Redisclose The Loan?
4. How Can I Choose A Lender With Low Mortgage Interest Rates?
5. What Questions Should I Ask Before Signing My Mortgage Loan Documents?