In order to obtain the loan that will be the most advantageous for you, your mortgage broker will need to be able to answer the ten questions below.
1. Do you have a license to practice in this state?
After you ask this question, you may ask which organization licensed your broker. Then, you can contact the organization to ensure that your broker is, in fact, properly licensed.
2. Am I receiving the best interest rate that I could possibly get for my credit score?
The interest rate is a very important figure. If you are charged a rate that is even a quarter of a percentage point higher than is warranted, this will make your loan a lot more expensive.
3. Can we lock in the current interest rate?
If you are offered a very advantageous interest rate, your broker can lock it in for a period of time. Generally, this period can be as long as 30 days. During that time, rates can rise, but if you decide to purchase the house, you will receive the locked in rate.
4. What will my annual percentage rate be?
The annual percentage rate is the total amount that your lender will charge for offering you the loan, and it includes your interest rate and other fees that your lender charges to finance the loan.
5. What fees am I being charged?
You may be able to pay points that will decrease the amount of interest that you will need to pay over the life of the loan. Also, the lender may charge a certain amount for appraisal fees and to obtain your credit reports.
6. What is my loan’s principle balance?
The principle balance is the specific amount of money that you are borrowing.
7. How much will I owe each month?
The answer to this question will let you know whether or not to proceed with the application.
8. When are my payments due?
Once you know the answer to this question, you can set up a budget that will make it easy to plan to make your payments on time.
9. How long will I be paying for this loan?
Loans have different terms. Most loans have a term length of 30 years, but you may also obtain a loan with a 15- or 20-year term.
10. Can I pay my loan off early without a pre-payment penalty?
If you wish to pay your loan in full before it is due, your lender may charge a penalty. Learn the answer to this question so that you can make the appropriate arrangements.