Knowing the right questions to ask your mortgage lender can help you save money and get the best terms on your home loan. Just as they will be interviewing you, it’s a good idea for you to interview them to make sure you’re getting the best mortgage for your new home.
Before you call or meet with a potential lender for the first time, get a notepad and write out your questions. Here are 5 to start your list:
What kinds of loans do you offer?
Conventional loans are just the tip of the iceberg when it comes to financing a home. Many other types of mortgages exist. There are VA loans for veterans and service members, USDA loans for homes in rural areas, and FHA loans for buyers with modest incomes.
Each type of loan has different requirements for qualifications, down payments and repayment terms. Some are available with low or no down payments. Note that if all else is equal, a longer-term mortgage will cost you more overall but have lower monthly payments, while a shorter term will have higher monthly payments but will cost less overall. You could potentially save tens of thousands of dollars by choosing a 15-year mortgage instead of a 30-year one.
Can I get pre-approved?
Getting pre-approved by a lender will give you a big advantage when house shopping. You’ll be in a position to make an offer on a house quickly. Pre-approval will tell you how much money the lender is willing to loan you, which in turn lets you know how much house you can afford.
If you want to get pre-approved, ask potential lenders if they offer that service. Then get all your documents and supporting materials together and submit them in a timely fashion.
How much will I need for down payment and closing costs?
The down payment isn’t the only out-of-pocket expense you’ll have when buying a home. You’ll also have closing costs to pay. These cover the appraisal, title fees, credit check fees and other miscellaneous expenses that go along with home purchases. Plan on about 2-5% of the home’s purchase price, but check with your lender to be sure.
How much will my monthly payment be and what is included in it?
Once the lender has pre-approved you for a loan, ask them to calculate what your monthly payment might be for the amount you expect to borrow. Will the payment work in your budget? Be sure to ask what’s included in the payment. Will you have to pay homeowner’s insurance or property taxes separately? Remember to factor monthly HOA fees into your budget.
Do I qualify for any special programs or incentives?
You may qualify for first-time buyer programs, closing cost assistance or other helpful programs. Some home builders, such as TimberCraft Homes, work with preferred lenders to offer great deals to new home buyers.
TimberCraft Homes partners with preferred lenders that we trust and recommend. Matt Brown at Sovereign Bank offers competitive interest rates and options for several types of mortgages.
The Weston Team, headed by Shelby Weston with backing from The Money Store, also offers a variety of mortgages to get you into the new home you want.
Both lenders work closely with us to offer terms and incentives that you won’t find at other lenders or credit unions.
Make your dream home a reality this year! When your list of questions to ask your mortgage lender is complete, call TimberCraft Homes at 405-784-7245 to get connected to our preferred lenders today!
