SolveYourProblem
Home Loan & Home Mortgage Article Series
Before
Signing Any Loan Ask These Questions
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.
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SolveYourProblem.com : 2007
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