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Ten Questions to Ask your Mortgage Officer When Applying for a Loan

Posted by  on Apr 16, 2009
 
Buying a home is something that takes a long time. In an effort to speed up the process, many homebuyers attempt to skip steps they feel are unimportant, but this can lead to long term problems. When you are sitting down, you owe it to yourself and to the mortgage provider to ask these ten simple questions:

· What are the exact terms of my mortgage? — Though it may seem like a straightforward agreement, you will want to have everything spelled out for you before you sign the mortgage payments. Have the officer run through the payment plan month by month, year by year.

· What are the penalties for paying the mortgage off early? — You might find yourself in a better financial position in a few years, and you might want to pay off your mortgage. When this happens, you might have to pay penalty fees, so find out if this is the case.

· How much interest will I be paying now and in the future? — When you sign up for a fixed rate mortgage, it will be simple to find out what your interest rate will be now and in the future. However, if you are signing up for an adjustable rate mortgage, you will want to find out what the typical range for the interest rate will be, if they can tell you at all.

· How much of each mortgage payment goes toward the principal and how much is going toward the interest? — When you are paying off this large of a loan, you will want the majority of each payment to go toward the principal because this will help to reduce your overall interest payments.

· What are the closing costs for this process? — In order to be sure you can cover all of the costs of a home purchase, be sure to ask about the closing costs and other fees you might incur along the way.

· Can I qualify for a fixed rate mortgage? — If you would like to know exactly what your mortgage payment for each month is going to be, it might be easier if you ask to see if you qualify for a fixed rate mortgage. While the payments will be higher, the payments will not fluctuate with the future interest rate changes.

· What is the required down payment? — When you are applying for your mortgage, you will need to pay a part of the house's price. Finding how much this is will help you decide whether or not you need to get a specific mortgage that will cover these costs.

· How long is this going to take? — When you begin the mortgage process, you may want to find out how long the process will take. This information will allow you to determine how quickly you need sell your home or to submit your notice of ending your apartment lease.

· What documents do I need to get this process started? — Because this is a major financial transaction, the mortgage lender will probably want to see a number of financial records from you. Be sure to ask in advance about the papers you will need so that you show up ready to work out the mortgage details.

· Is there anything I need to qualify for this loan? — Of course, this question should be asked before you even begin the mortgage application process. You need to find out what kinds of qualifications your loan will require in order to accept your application.

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