Questions to Ask Your Mortgage Lender

If you're a first-time buyer, it might be difficult to know what questions to ask your mortgage lender. We have put together a few questions to help get you started.

What fees and what are my payments?

When you're looking for a house, your budget is an important factor. You need to determine how much you can afford in order to narrow down your search and establish realistic expectations. To help you estimate the cost of a house, your lender will need to examine your income and credit.

Your financial situation will be reviewed by your mortgage lender. They will then provide you with an estimate of your monthly payments. The information you receive will include your interest rate, closing costs and property taxes. You also have to pay any fees. The mortgage lender will help you decide how much down payment is necessary.

It is easy to calculate your mortgage payments using the mortgage calculator. The calculator will help you estimate how many houses you can afford, and calculate your monthly payment. The mortgage calculator will help you to get a better idea of your budget.

What types of mortgage terms are you offering?

There are many mortgage loans available that might be right for your needs. You may be eligible for multiple programs. Discuss your options with your mortgage lender. These types of loans can be discussed with your lender:

Conventional fixed rate mortgages

A 30-year fixed-rate, conventional mortgage loan is the most popular. Monthly payments will be lower because the term is longer. Rates are fixed and will remain the same throughout your loan's term. The longer the term of your mortgage, the higher interest rate you will pay. A 20-year or 15-year term might be an option if you are able to afford higher monthly payments.

Variable-Rate Mortgages

ARMs offer interest rates that can change over the life of the loan. This is in contrast to fixed-rate mortgages. An adjustable-rate mortgage is available. After the end of the fixed period, your interest rate can change in response to market fluctuations.

This could mean that your monthly mortgage payment may differ from month to month. Budgeting can be difficult. This loan type has limitations that restrict how much you can pay each month and what your interest rate can rise over the course of time.

FHA Loans

Federal Housing Administration (FHA), is more attractive to borrowers who have lower credit scores, incomes and savings. FHA loans are less risky than conventional loans and require lower down payments. FHA loans are limited in terms of how much you can borrow. A premium will be charged for mortgage insurance.

VA Loans

The U.S. Department of Veteran Affairs supports VA loans. These loans are available only to veterans and active military personnel. VA loans have lower interest rates and require no down payment. These mortgages have some restrictions and fees. Eligible applicants must expect to pay funding fees and have enough funds.

What credit qualifications are you required?

Lenders can use your credit score to determine how likely you are to repay the money borrowed. If your credit score is above average, a mortgage loan will be easier. Even if you don't have perfect credit, you can still purchase a house. You may have to pay more for your loan.

Each lender has its own criteria for acceptable credit scores. Asking questions to your mortgage lender about credit qualification is a good idea. Your lender may have special rates and offers for people with good credit. Click here to find the best mortgage lenders.

Can You Offer Mortgage Points?

Mortgage points are an optional charge you can pay at closing in order to "buy" lower interest rate mortgage loans and reduce their overall cost. Each mortgage point is 1% of the loan amount.

You might be eligible to buy mortgage points at closing for $1500 if you borrow $150,000 Mortgage points are a benefit to homebuyers who plan to stay in their homes for many more years. They could save thousands on their loan term.

Ask your lender whether it's a good idea for you to buy mortgage points. Learn how each point reduces your interest rate and how many you can purchase.