1. What is the interest rate on this loan?
Your interest rate is an important number. It defines how much you’ll pay over the course of your loan and it can make or break a housing payment. To prepare yourself for buying a home, you’ll need to know your interest rate and understand whether it is variable or fixed.
2. Are there closing costs with this sale?
The likely answer to this question is yes, and if that’s the case, you’ll need to know how much you can expect it to be. Closing costs are used to pay or reimburse third parties like title companies, and are a virtual guarantee with all sales. In some sales, the seller pays the closing costs, but it’s much more common for the buyer to absorb them. Talk to your mortgage broker about this reality before you proceed with the sale.
3. How much will you make on this loan process?
This is a critical question to ask. While it may seem overly personal, it’s essential. The reason for this is that mortgage lenders often get paid on the size of the loan, which may mean that they’ll make more if they can talk you into taking out a larger or less efficient loan. To protect yourself and your assets, ask this question before you proceed.
4. What will monthly payments be?
To plan your financial house accordingly, you must know how much your monthly payments will add up to. Ask this up front to get it out of the way as soon as possible.
5. Does this loan include prepayment penalties?
Some loads include a prepayment penalty that will penalize you if you pay the loan off before its deadline. Ensure this doesn’t apply to you by taking to your loan officer about it in advance. If there are prepayment penalties, you’ll need to take note of what they are and how much they add up to.
Know What to Expect from Taking Out a Mortgage
Buying a home is fun and frightening all at once. To ensure you have a positive experience, be sure to come prepared with these five questions to ask a mortgage broker. In addition to protecting you and your best interests, these questions will also help you prepare adequately for the upcoming purchasing process and repayment period.