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Make sure you have all the facts before you sign for your loan..."
When you sit down with a lender please be sure to get the answers to these 10 questions before you go any further in the loan process.
1. What is the interest rate on this mortgage?
Ask for the annual percentage rate (APR) of the loans interest, this is usually higher than the originally quoted rate because of the addition of fees involved procuring a loan. You must beware of APR found in advertisements. Often these are used in bait and switch schemes to get customers in the door. Always ask for an itemized list of rates, points and fees. When the rate is quoted ask if the quote is a 30/21/12 or even 7 day quote/lock as the rate can increase or decrease depending on the type of quote. For example a 30 day rate quote/lock could be 6.125% and a 7 day quote/lock could be 5.875%. Keep this in mind when speaking about or obtaining rates.
2. What discount and origination points will I be charged?
Often lenders may charge prepaid mortgage interest points. Find out the kind of points they will be and their effect on your loan.
3. Will you give me a good faith estimate of my closing costs up front?
There are fees that are a part of every loan for services provided by the lenders and other companies involved in the loan process. Have the lender give you a good faith estimate within a week of receiving your loan application. Experts advise to be wary of any lender that refuses to supply you one.
4. What are the fees if any, involved in locking in an interest rate?
Interest rates are constantly fluctuating, and it is possible that it could change between applying for a loan and its closing. Often you can “lock in a rate” that will keep your interest rate the same from the day you apply. Please make sure that you find out if there are any fees involved with this.
5. What is the minimum down payment of this loan?
A typical down payment is between 5 to 20 percent of the loan, and the more money you can put down, you may be able to lower your rate and improve the loan’s terms. Often if you do not have enough for the minimum down payment you are required to private mortgage insurance (PMI).
6. Is there a prepayment penalty on this loan?
Often prepayment penalties are added to lower the loans interest rate. There are many types of prepayment penalties that can be added to a loan. Make sure that if your loan has a prepayment penalty on it that you know exactly what they are.
7. What documents will I need to have?
Usually you will need to show proof or income and assets though there are “no-doc” loans that do not require any documentation. These types of loans are only open to those with excellent credit and require a larger down payment and can carry higher interest rates.
8. What qualifying guidelines are included with this loan?
These requirements relate to your income, employment, assets, liabilities and credit history. First-time home buyer programs, VA loans and other government-sponsored mortgage programs typically offer easier qualifying guidelines than conventional loans.
9. How long does it take to process a loan?
It can take as little as two weeks to 60 days or more. Be sure to have the mortgage lender give you the most accurate guess they can so you can determine how long to lock in your loan.
10. What might delay approval of my loan?
If you provide complete and accurate information to the lender the process usually runs smoothly. Be sure to tell your lender immediately of any changes to your income or any new debt or marital status while your loan is processing. There could be delays if the underwriter discovers any undisclosed credit problems so be sure to be as accurate as you can.
+1.Why are you charging me an upfront fee? - Some mortgage companies will tell you the fee is to cover cost they incur to open your mortgage file, the fact is they charge you a fee to keep you loyal to them. Their thinking; you're less likely to go to another mortgage company if you paid a fee to them. Our thinking; with the service, fees, and upfront honest approach you needn't go anywhere else.
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Why do I offer this report free of charge? I am offering this free of charge because I want to be your mortgage advisor. I offer more than simply a loan: I'll personally advise you on how to use and apply the principles contained in this report. Worried that you can't remember all of what is contained here? Call me. I want to earn your business.
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