Ask basic mortgage questions before you choose a lender

If you want to get a loan to purchase your home, you have to go to the mortgage lenders. You need to shop for different lenders and choose the one that suits you the best. Before choosing a lender, you should ask him some mortgage questions. If the answers are satisfactory, then you can start your deal with him.

The most important mortgage questions that you should ask your lender are:

• What is the type of interest rate on the mortgage and can it be readjusted over the loan period?
• If I can’t afford 20% down payment, is there any offer of low down payment? Do I need to have a PMI?
• What will be my options if I want to go for refinance?
• How much will be my interest rate lowered if I buy discount points?
• What will be the charge towards origination and closing costs?
• Will I be able to pay off my loan before the loan term? Will there be any prepayment penalty?
• What are the things covered (like, principal, interest, property tax, homeowner’s insurance, etc) in my monthly mortgage payment?
• When can I lock-in my interest rate and do I have to pay any charge for this?
• Is there any offer of getting grants or tax-relief or any other benefit?
• Will you give me a detailed break-up costs related to third party vendors, like, cost for appraisal, credit report, taxes, recording fees, lender’s title policy, etc?
• Will the lender guarantee the GFE (Good Faith Estimate)? Will the GFE contain all the costs of your loan?
• Is there any special mortgage for the first time buyers? (You can ask this question if you’re buying home for the first time)
• How much time do you take for processing the loan and get it approved?

You should have satisfactory answers from the lender before you finalize to get the loan from him. You should ask the basic mortgage questions mentioned above to different lenders and after scrutinizing their answers choose the one who is the most suitable for you.