The process of getting a mortgage can be long and complicated, causing a need to ask many questions along the way. Here are a few questions you may have for your home mortgage company when getting a mortgage.
What Type Of Mortgage Works Best For You?
It's important to sit down with your mortgage lender and talk about what your needs are for getting a mortgage, which will be used to determine the kind of mortgage that will work best for you. Some people are looking for a loan that doesn't require a high down payment, while others are looking to sell the home within a few years and want to pay as little interest as possible. With there being so many financial products available to you for a mortgage, you may be surprised that the typical 30 years fixed rate mortgage is not the answer.
What Factors Affect The Interest Rate?
Interest rates are always changing, and you won't be able to lock in your rate until you are near the end of the process and everything has been approved. However, you may be wondering what factors actually affect the interest rate of your mortgage. The length of the mortgage, your personal credit score, and the size of the down payment can all play a role in the interest rate. Ask what you can do to get a better interest rate if you plan on staying in the home for a long time, since you'll potentially be paying the mortgage for the next 30 years.
Know that you can also purchase mortgage points, which reduce how much you pay in interest by paying more up front at the time of the home closing. This can be risky if you don't plan on staying in the home long, but can pay off if you know you won't be selling the home for a long time.
What Costs Will Be Paid At Closing?
Be aware that there are closing costs that need to be paid at the end of the home buying process. It is important that you are prepared for these costs at the time, since you typically cannot roll them into the home mortgage. You can see costs for things such as running a credit check, the origination of the loan, and even the home appraisal. If you are tight on cash, you may need to dial back your down payment so that you can cover the additional costs.