Find the Best Home Mortgage- 5 Important Questions to Ask
In the past, the dream of finding a mortgage for a house started at the ripe old age of 20-something. But according to Experian, the magic age is now 34!
But whether you’re making those baby steps into your first home or you’re a seasoned homeowner who hasn’t touched mortgages for a long time, it’s hard to know where to look.
We’ve compiled a list of 5 questions you should ask to establish whether a home mortgage lender is right for you.
1. What Type of Home Mortgage Can I Qualify For Applying?
Homeowners have three main types of mortgage options to choose from. These include conventional first-time homebuyer mortgages, government-backed home mortgage loans, and unconventional loans. Check out these mortgage lenders for more information on the types of home loans you can get.
Conventional mortgages include the most common home-buying options, such as 30-year fixed-rate mortgages and 15-year fixed-rate mortgages. These help prospective homeowners keep their payments low and stabilize their monthly spending while buying a new home.
2. How Much Downpayment Do I Need?
To qualify for a given mortgage, you’ll need at least 5% of the home’s purchase price saved up in a savings account. This is known as your downpayment. It will cover your closing costs and show your lender that you’re ready to buy.
Lenders will typically want to see a down payment of at least 20% for a home purchase. If you can’t get a downpayment together on your own, consider talking to friends or family or seeking a grant or loan from outside sources.
3. What Are the Home Mortgage Rates and Terms?
Downpayment is one of the most significant factors that affect the rate and terms of a mortgage. Ensure you are comfortable with your downpayment amount, as it will significantly impact your monthly payments.
The return rate on your investment is often inversely proportional to the amount you put down as a deposit. This means that the more you invest in a home at first, the better the rate of return will be for you.
4. What Is My Monthly Payment?
Your monthly payment is how much you would pay to your lender each month to carry the loan. Monthly payment is vital when budgeting for your property to make sure it fits your financial situation.
If you have trouble paying off the mortgage, talk to the lender about making changes. They may be able to lower your interest rate or extend the length of time that you can make payments before refinancing.
5. Do You Charge Additional Fees?
Appraisal and application fees may apply, but they are usually tied to the property’s cost (which can be taken from the proceeds of your loan).
Origination points and/or broker points will be taken as a percentage of your total loan amount. They are usually negotiable, so shop around to see what you can get them lowered to.
Other fees such as commitment and processing fees may apply if you decide to withdraw from a loan before closing. Make sure that you understand which fees might apply for your situation when applying with a lender.
Ask the Right Questions to Find The Right Lender
Once you’ve asked all these questions, you’ll be in a better place to decide which mortgage is right for you. Then you can think about submitting your loan application to the lender.
The lender will most likely want to see some additional paperwork to verify your personal history and other information. Then you can sit back and get ready for the excitement of finding a mortgage for your dream home!
For more top tips, keep reading around the blog!