5 Essential Questions to Ask When Applying for Mortgage
Who isn’t excited about the idea of buying their next home? Home is your biggest investment, and you must look into every detail before buying one. Not everyone can afford to pay in one go, but that doesn’t mean you do not have other options to buy your dream home. from a reliable mortgage company. Do your research before hiring a mortgage broker, and prepare a list of questions. Asking questions to your mortgage agent is important because years of your life can depend on the answers you get. The more your broker knows about you, the better advice and assistance he can provide you. Here is a list of potential questions for your mortgage agent before you commit to a loan-
1) If your credit score is not good, will you still get your loan approved?
The first thing an agent will check is your credit card score. So, it is better to clear off all the debts before you apply for a mortgage. Even if you have a low credit score, let your agent know since he can provide various solutions and loans that will accept borrowers with a low score. If your card score is low because of errors that don’t exist, then be ready to present the financial history.
2) Being a first-time home buyer, how much do you need to pay as a down payment?
In the case of a mortgage, aim for at least 20 percent of the down payment. That will get you better loan terms, and you can avoid paying for Private Mortgage Insurance. If you cannot afford to pay 20%, do not put it down below 10% since it will cost you extra interest and fees.
3) What documents will you be asked to provide?
Your mortgage agent may ask you to show bank statements of your accounts, two years’ worth of work to be done on time or as early as possible, then collect all the documents to represent it to your agent., or two to three months of consecutive pay stubs apart from your credit score. If you want your
4) Are property taxes included in your monthly mortgage?
Lenders often roll property tax into borrowers’ monthly mortgage payments, but many private lenders calculate your annual property tax burden to estimate your tax payment. If you are paying more property tax, then you may get a refund. If you underpay your property taxes, you will be asked to pay additional.
5) What are the closing costs?
Closing means you are on the verge of completing the mortgage process.who can provide the breakdown of the following costs-
- Title insurance and Home Insurance
- Escrow accounts and Private Mortgage Insurance
- Recording and transfer costs
- Flood certification fee
- Survey fee
- Discount points to get a low interest rate.
- Loan preparation fee
- Title search fee
- Attorney costs for closing the loan.