Most homebuyers would agree that the exciting part of the house buying process is when they get to visit their potential new homes and visualize living in them. But before you can get to that point, you must sort out the finances first. It all begins with making some mortgage arrangements. To help you with this basic process, below are some of the important questions that you must ask your mortgage lender.
What Is the Interest Rate and the Annual Percentage Rate?
Inquiring about the interest rate on your mortgage is almost a no brainer; you’ll go for a lender that offers the most competitive interest rate. The annual percentage rate on a loan, however, is not as simple. It’s derived after a series of complex calculations, and many lenders tend to compute it inaccurately, especially for an adjustable loan.
It is, therefore, useful to ask the lender to pin down the adjustment frequency on an adjustable loan. You should also be clear on the things such as maximum annual adjustment, the margin, the index, and the highest cap or rate.
What’s the Required Down Payment?
There is no strict rule as to what the down payment may be on your loan. 20% is what is generally proposed. This rate can be worked around depending on your goals for a monthly payment. So talk to your mortgage lender and work out a down payment that best suits your financial needs. There are numerous loans that offer a 3% to 5% down payment, and if you happen to be an armed forces personnel or a veteran, you’ll even have access to VA loans and will be eligible for further concessions in down payment.
How Long Will It Be Before the Funds Are Made Available?
On average, the entire loan processing period may stretch anywhere from 21 to 45 days. You are required to provide a closing date for a purchase contract, which is confirmed with the lender. Also, do ask if there are any anticipated obstacles that could delay the closing and how long the loan will furnish post the approval of your application.
What Are the Estimated Closing Costs
Closing costs would include a number of factors such as origination fees, attorney fees, appraisal fees, and more. You should ask your lender to provide a loan estimate that outlines the approximate costs. This will assist you a great deal in the budgeting process.
Do You Provide Any Down Payment Assistance Programs?
There are over 2,500 homeownership programs offered across the US. These can assist in bringing down your down payment and other costs, such as the closing costs. Many programs are administered by both local and state housing agencies. Furthermore, some lenders offer their own down payment assistance programs, as well.
Ask your mortgage lender all the right questions, so you have sufficient knowledge when you’re going into the buying process. If you’re looking to buy a house anywhere in Orlando, Florida, you can acquire our dedicated services to make thoroughly informed decisions throughout your house buying journey.