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Questions to ask a
lender
If
you have questions on the mortgage process or any of the loans
we offer, we will be happy to answer them and give you the
information you need to make an informed decision. We are
ready to help online, at any of our mortgage offices across the
U.S. or by toll free telephone. Click
here to choose the method that works best for
you.
If
you plan to talk to other lenders, be sure to ask these
questions:
What will the closing costs
be?
These are expenses that must be paid when a loan is
closed, title transferred, and loan money given out. They
include things such as an origination fee, appraisal fee,
credit report, attorney fee, title insurance, recording fee,
survey, termite inspection, etc. Every lender must give you an
estimate of the closing costs within a few days after receiving
your application.
What prepaid items will I
pay?
When you close on your loan, you will have to prepay
some expenses for your home that will occur in the next year.
Taxes and insurance are examples. Interest is another. You may
have to prepay interest on your loan from the day the loan
closes until the end of the month. That's called accrued per
diem interest.
How long will loan approval
take?
This can be very important, especially if you need to
close on a house quickly. Processing and approval times are
different for different lenders. Be sure to ask how much time
to allow.
Is there a prepayment
penalty?
There may be times when you want to pay more than your
scheduled mortgage payments, allowing you to pay your loan off
early. Be sure to ask about prepayment policies. What loans are
offered?Know your choices. If a lender offers you a loan that
you've never heard of before, make sure you learn how and why
it's different.
Is there an interest rate lock-in
policy?
Ask if the quoted rate is guaranteed, and for how long.
Is there a written lock in agreement?
Does the loan have a call
option?
A
call option would allow the lender to require you to pay off
the full loan balance at a time before the full term of the
loan.
What are points?
A
point is an up front fee the lender charges. One point is equal
to one percent of the loan amount. For example, one point on a
$45,000 loan would be $450. The lender determines how many
points are charged. Many lenders allow customers the option of
paying "points" in exchange for a lower interest rate on the
loan. Points are paid at closing, either by the buyer, the
seller, or split between them subject to government guidelines
or your sales contract.
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