If there’s
one rule that dominates in the home mortgage industry
it is this: That you never go solely according
to the mortgage interest rate. Instead, it makes good
sense to take a close look at the jargon surrounding
a mortgage program. You could even check back with lenders
or a mortgage broker or shop on the Web for comparative
rates. While you shop around, be armed to ask your mortgage
lender a few key questions given here. The answers that
you get will help you decide which loan is best for
you.
How soon can I expect my mortgage loan application
to take?
Typically, a loan application for a home mortgage takes
about 45-60 days to come through. Of course, there have
been times when they’ve taken just 30 days too!
But really the time taken depends on how soon the lender
can get the property appraised, a credit report and
employment details and bank accounts verified.
Which documents will I have to furnish?
A certificate proving your income and assets will be
necessary to get a home mortgage loan. However, lenders
ask for different documents, so it depends on whom you
meet.
What would qualify me for a home mortgage loan?
Your lender will look at your credit history, income,
employment status, assets and debts before granting
you a home mortgage loan. If you’re a first time
home buyer, you stand a better chance of being granted
a loan.
How much would I have to pay as a minimum down
payment?
First, finalize the down payment amount on your home
mortgage loan. Based on this your lender can offer you
a range of interest rates, loan terms and perhaps even
refuse to consider private mortgage insurance. While
some loans demand a 20 percent down payment; others
are lower than that.
How much mortgage interest would I have to
pay annually?
To compare well against different lenders’ rates
on your home mortgage loan, ask them for their annual
percentage rate or APR of the mortgage interest.
How much would I have to pay by way of origination
fees on the loan?
Origination fees are usually paid as prepaid mortgage
interest on your entire home mortgage loan. Your lender
might ask you to pay this in points at closing time
just so that you get a lower interest rate on your home
mortgage loan.
Can the interest rate also be locked in?
The interest rate of your home mortgage loan is variable,
so it could rise or fall before you closing time. So,
it would be wiser to lock in the rates for a specified
time period rather than have a floating rate till closing.
Ask your lender for any fee for locking in a rate and
if you could lock in points.
What is meant by the “good faith estimate”
of closing costs?
Mortgages, including home mortgage loans, are accompanied
by a whole litany of fees. So, ask your lender to show
you the whole list of estimated closing costs before
you actually apply for the loan. And bear in mind that
certain fees must be paid upfront, for instance the
credit report, property appraisal and loan application
fee.
Will I also be asked to pay a prepayment penalty
on the loan?
This is a matter for mortgage home loan shoppers to
consider. You would need to know the duration of the
penalty period and how the fee will be calculated. While
some penalties stand at one percent of the loan amount,
others aren’t that simply calculated.
Can I expect any setbacks in my home mortgage
loan being approved?
Everything on your home mortgage loan can go like clockwork
if you provide the lender with complete and accurate
information about your financial status. However, there
could be a delay if the lender finds credit problems
in your financial statement. To avoid such an eventuality,
notify your lender on your personal or financial status
if there is a sudden change after you have sent in your
application. For instance, if you have changed jobs
suddenly, got an increase or decrease in your salary,
have had a windfall, or if you have a change in your
marital status, inform your lender.
MT |
