Questions You Should Ask Your Mortgage Lender
Spring is a great time to buy a home at the Lake of the Ozarks. You may be searching for your first home, looking to move to a new home, or maybe you are looking to buy a second home. Before you start your house hunt, you should contact your lender and ask them some questions. Team Andy Gibson are your most trustworthy, ethical, and reliable real estate agents at the Lake of the Ozarks. We are here to help you through all aspects of your home buying process. Today, we would like to share with you what you should ask your lender before you start your house hunt.
Compare Lenders, You Have Options!
Buying a home can be time-consuming. Allow plenty of time, so you can get the best deal on your loan. You should always talk to multiple lenders before you decide who to go through. You would be surprised how much loan conditions can vary from lender to lender. Purchasing a home can have a big impact on your financial portfolio, so make sure you are getting the best deal.
How Much Can You Afford?
Getting pre-approval before you start your house hunt can save you a lot of trouble down the road. When you go through the pre-approval process, your lender will tell you how much you can take out on your loan. There is nothing worse than finding your dream home and when you go to put an offer in, you find out you can't get a loan for that amount. A lot of sellers require a pre-approval letter before you can make an offer. If you take the time to get pre-approved first, it often speeds up the process.
What Is the Interest Rate?
The interest rate you receive on your mortgage impacts your loan in a big way. The lower your interest rate, the lower your monthly payment will be. Even a small variation in your rate can take thousands of dollars off your loan over an extended period. Your interest rate is based on the type of loan you take out and your credit.
What is Your Estimated Monthly Payment?
Finding out what your monthly payment will be is important. Just because the bank will lend you a certain amount of money doesn't mean you have to take out the full amount. Look at your budget and decide how much you can afford each month. You may be trying to save up for a vacation or new car. Make sure your house payment won't make it to where you can't reach those goals.
Is Your Interest Rate Fixed or an ARM?
If you have a fixed rate, your interest rate is locked in for the life of the loan. ARM (adjustable rate mortgage) interest rates can vary. If you are not planning to stay in your new home long-term, sometimes you can get a lower interest rate initially. However, make sure you understand the terms. Find out when your rates will go up and by how much. Make sure that when your rates go up, you can still afford your monthly payment.
Is There a Prepayment Penalty?
You can take years off your loan by adding extra money to your principle. If this is something you are planning to do, ask your lender if there is a penalty for paying your loan off early. This could change your mind on what lender you go through or what type of loan you take out.
What Will Your Down Payment Be?
The type of loan you take out will determine how much you will need to have for your down payment. Typically, you need 20% down. However, there are loans you can get such as an FHA, that you may not have to have a large down payment for. Sometimes if you do not have a full 20% down payment, your lender will require you to take out private mortgage insurance. Talk to your lender to decide what type of loan is best for you.
Team Andy Gibson is excited to help you find your dream home! Whether this is your first time going through the home buying process, or you have bought several houses before, you should still ask your mortgage lender questions before you start your home search. Knowing your budget is an important step. When you are ready to buy a home at the Lake of the Ozarks contact Team Andy Gibson, the most trusted real estate agents at the Lake of the Ozarks!
Keller Williams Lake of the Ozarks Realty
858 Hwy 42
Osage Beach, MO 65065