Working with a mortgage lender to buy your home is an exciting process. However, it’s easy to get caught up in the excitement of purchasing your first home and forget to ask critical questions. Not knowing the answers can leave you in a bind in the long run. Instead, make sure you ask your mortgage lender these critical questions.
What Will My Payments Be?
Before shopping for a house, you must know how much you can afford. Once you determine how much you can afford, ask your mortgage lender what your payments can be. Mortgage lenders don’t know all of your additional expenses, such as if you have student loan payments. Because of that, they may think you can afford higher payments even if you can’t. When you don’t ask your lender this one question, there’s a chance you wind up with higher payments, and that puts you at an increased risk of foreclosure.
What Types Of Mortgages Do You Offer?
There are various types of mortgages available. A fixed-rate mortgage is standard. These give you a fixed interest rate, meaning your payments won’t drastically increase. An adjustable-rate mortgage is not as typical as a fixed-rate mortgage, but these are often available through lenders. In this type of mortgage, the interest rate changes. Because the interest rate can go higher, most people don’t opt for these. FHA loans are designed for people with lower incomes, savings, and credit scores. The terms are more flexible, making these appealing to low-income families that want to own a home. VA loans are loans that are offered only to veterans. Speak with your mortgage lender to determine the types of mortgages available and which will be best for your situation.
What Are The Necessary Qualifications?
It’s important to understand that different mortgage lenders have different requirements. This varies depending on the type of mortgage that is offered. Most require a minimum credit score and income level. Some require a minimum down payment as well. This fundamental question will help you determine whether you can work with a mortgage lender or have to find another one.
What Is The Interest Rate?
An interest rate determines how much you pay and your borrowing money for the house. While most lenders tend to fall into the same area depending on market conditions, there are always exceptions. Take the time to ask several different mortgage lenders what your interest rate will be to ensure you are not being taken advantage of.
What’s The APR?
Most people think about asking about the interest rate, but inquiring about the APR is equally essential. APR stands for annual percentage rate. This is the total amount you will be charged annually, including interest and any fees the lender might charge.
Experienced mortgage lenders are prepared to answer your questions about payments, interest rates, and more. However, keep in mind that this will often depend on your qualifications. Contact us today to learn about the best mortgage rates in New York and beyond!