Before agreeing to a loan, it is important that you are able to ask the right questions to your mortgage brokers. The reason for this is that there should be no confusion and that your needs are being met. However, to ensure that this is being done correctly, you have to ask the right questions.
If you are not sure what kind of information to ask for, don’t fret. Below is a list of questions that you may start off with just to make sure that this loan is for you:
Frequently Asked Questions When Applying For a Mortgage Loan
- What Loan Is Suitable for Me? This question is necessary before you even have a loan agreement. Usually, this question is not something many people get to ask because it is usually the broker who would start prodding and asking questions, then recommend a loan. However, there will be times when we are asked questions, we are led away from the concerns we have. This is why it is better to be a little more headstrong in this situation and try to assert your needs and wants. This way, the broker can find a more appropriate loan for you.
- What Is the Interest Rate and Annual Percentage Rate (APR)? These rates vary from one facility to another. This is why you will always need to ask this to your broker to be sure that it is a rate you agree with. The APR is also calculated differently and has many factors affecting it. Because of this, you will need a basic breakdown and calculation of it just so you can get a basic idea.
- What Costs Will I Pay For? Sometimes, when you’re applying for loans, they do not disclose the full payments and costs. They will show you the basic costs and pricing, but not any other additional fees or service fees. This could raise the price of what you are paying for greatly, which may end up requiring you to adjust your budget accordingly. It is best to be upfront about this and ask for any other fees you will be paying for. These hidden fees could end up making it difficult for you financially, so it is better to receive the full disclosure immediately instead of having to find out later on.
- What Is the Required Down Payment? Commonly, the required down payment would be around 20%. However, there may be some cases where this can be lowered. In some specific loans, if you are qualified, they would only require as little as 3% as your down payment. However, there are some disadvantages to this as well. Lenders may take away some benefits like mortgage insurance if you put a lower down payment, which may give you an additional outside cost. So, it is best that when asking for the required down payment, you can also ask for your options on the down payment if it is possible to lower them or increase the amount so you can have a lower interest rate on it.
Your Experts at Mortgage City Are Here For You!
When taking out a mortgage loan, it is important that everything is clear to you and all your needs are being met. This is why before you come upon an agreement, it is necessary to ask the right questions to see if the loan is suitable for you. The questions above are the most basic questions you will need to ask, but if you have anything else to worry about, do not be shy or afraid to ask your broker.
For a first-time homebuyer, applying for a mortgage loan can be a little intimidating, but Mortgage City is here to help. We are a licensed mortgage originator servicing those in Michigan, Florida, New Hampshire, Indiana, Texas and Ohio. Call us today at (248) 930-8709 to get started.
