Fusion 360
For those unfamiliar with mortgage companies’ practices and procedures, buying a home can lead prospective borrowers into scary and unfamiliar territory. Having a basic list of important questions to ask borrowers can provide nervous borrowers with some much needed confidence.
The first question borrowers should ask their lenders is what the interest rate is on the mortgage. Prior to visiting the lender, borrowers should do some quick research and investigate the current, average mortgage rates.
It’s an automatic deal-breaker should a lender offer an absurd mortgage rate.
Another detail borrowers should be sure not to overlook are the closing costs. On average, mortgage companies require between two and five percent of the amount borrowed for the home.
Borrowers should inquire upfront what the mandatory minimum down payment for their home will be. The industry average ranges from five to 20 percent, depending on the circumstance and lender. However, an important factor to keep in mind is the bigger the down payment, the better the interest rates.
A prepayment penalty occurs when a borrower pays off the mortgage before the end of its term. Some mortgage companies charge a fee if this occurs, while others do not. Borrowers should ask the lender their policy on this issue.
Prior to meeting with a lender, either call or comb the lender’s website for the necessary requirements in qualifying for a home loan. Knowing this prior to meeting with an advisor helps speed the process and showcase a degree of responsibility.
Mitchell Reber is a finance writer. Information provided by Castle & Cooke Mortgage (NMLS# 1251). He writes for Fusion 360, an advertising agency in Utah. Find him on Google+
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