1. How much can I borrow to buy a home?
When determining how much you can borrow, lenders may consider your income level compared with debt, your employment status, and your credit history. It is beneficial to talk to a mortgage lender about getting prequalified for a mortgage before you start shopping for your new home.
2. What types of mortgage loans do you offer?
There are two major categories of mortgage loans. Conventional loans and Government loans (i.e., FHA, VA, Rural Development, etc.) There are different requirements for each type of loan pertaining to down payment, credit score, credit history and debt ratio. It is important to ask your lender which type of loans they offer.
3. Do you offer mortgage points?
Mortgage points are sometimes called “discount points” and they are an optional fee you pay at closing to “buy down” a lower interest rate and save on the overall cost of the mortgage loan. Be sure to ask your lender when it makes sense to buy mortgage points, how much each point will lower your interest rate, and what the maximum number of points you can buy is.
4. How much money do I need to put down?
Your down payment can affect your interest rate, terms, and monthly payments. Finding out what is required for your loan will help you decide what is best for you.
5. What is my interest rate?
You may have already thought about this question, but you will get an idea of an interest rate that you can qualify for when talking to your lender. Your interest rate is determined by multiple factors, including your credit score, the location of your home purchase, the size of your down payment, and your loan type. You will also want to ask about the APR for the loan. The APR includes both the interest rate and the fees that the lender charges to originate the loan.
6. Do I need an escrow account?
An escrow account is a type of neutral savings account that holds onto money for prepaid property taxes and insurance premiums. Escrow accounts are usually established during closing and are often required for government-backed loans and optional for conventional loans. Ask your lender if you need an escrow account and what options are available to pay for shortages and whether you can get a refund If you overpay.
7. When can I lock in the interest rate?
Once you have considered a lender, you will eventually want to lock in your interest rate. Doing this will ensure that you are protected should the interest rates start to rise. Ask your lender when you can lock a particular rate and for how long. Keep in mind that lenders will usually offer lower interest rates for shorter-term locks and higher interest-rates for longer term locks.
8. What will the closing costs be?
Closing costs are fees that you will pay your lender and other third-party vendors to set up, process, underwrite and close your loan. Often times, typical closing costs will include appraisal fees, attorney fees, and title insurance.
9. Are there any prepayment penalties?
A mortgage prepayment penalty is a fee that some lenders charge when you pay all or part of your loan off early. Lenders might charge these fees to discourage borrowers from making extra payments on their loans, refinancing their loans at a lower rate, or selling their home before the loan is due.
10. Are you going to do a hard credit check on me today?
It is always a good idea to know when the lender is going to do a “hard” credit check, which is called a hard inquiry. By doing this, your payment history inquiry will show up on your credit report. Lenders need to do this before they can give you a firm interest rate quote.
Asking your lender a handful of questions ahead of time can help make the purchasing process smoother and less stressful for you. Make sure you are prepared with plenty of questions about income requirements, the types of loans you qualify for, and how much you have to save for a down payment and closing costs. Give Team Lasson a call today to discuss your mortgage loan!
Senior Loan Officer
NMLS #: 493712
4655 B Osage Beach Parkway
Osage Beach, MO 65065
**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.