14 Questions To Ask About Your New Mortgage
The mortgage loan process can be very confusing and stressful, so I thought I might take this opportunity to share some good questions to discuss with your lender when applying for a home loan:
- What kind of fixed-rate and adjustable mortgage loans available?
- 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 mortgage loans 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.
- Will the lender require mortgage insurance?
- Is the loan serviced locally or is the servicing sold?
- What will the total closing costs be?
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