Applying for a home loan…some great questions to ask potential lenders

The following are some good questions to discuss with potential lenders when applying for a home loan:

Are both fixed-rate and adjustable mortgage loans available? (see adjustable rate mortgages below)
How long can I “lock-in” the financing at the current interest rate and what is the “lock-in” policy?
Is a float down lock available in case rates drop after I have locked in?
What are the other fees a lender may charge me in conjunction with my loan?
Are funds for a second mortgage available?
Is there a pre-payment penalty clause? This involves extra charges for paying off the loan before maturity. About 80% of all loans in the United States are paid off early.
What is the “grace” period?
How late can a monthly payment be made before a late charge is assessed?
What will happen if a payment is missed?
If you sell your house, will the new buyer (if he/she qualifies) be able to assume your mortgage at the same interest rate?
Do you have to pay “points” to get your new mortgage? Usually lenders charge points for the cost of giving you a mortgage loan. A “point” is 1% of the loan. Or can you buy down points by selecting a slightly higher interest rate. If you do this and end up with negative points, the bank actually gives you money back at closing. 5% vs. 4.75% is no biggie if you aren’t planning to keep the home for a long time and would prefer to come to closing with a little less money.
Will the lender require mortgage insurance?
Is the loan serviced locally or is the servicing sold? Ask for a written “good faith deposit”.
What will the total closing costs be?

Hope this helps!

Happy Saturday!

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Kfoley Homes by Kristen Foley, REALTOR®