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6 Important Things to Ask a Mortgage Lender

By Mike in Home Buying Tips with 0 Comments

When buying downtown San Diego real estate for sale, you’ll need to find a reputable mortgage lender who can assist you with getting financing. Before you settle on a specific lender, you need to meet with the lender and talk a little about your options. Instead of getting a mortgage broker who rushes you through the process, you need one who will focus on meeting your needs. Take the time to ask your mortgage lender these six questions because he or she can provide valuable insight and prepare you for the lending process.

1. Can You Guarantee Closing on Time?

When you sign a contract to purchase a home, it will include a date you are supposed to close by. However, many buyers end up going past that date because their lender is not closing on time. To avoid extra fees or other problems, select a lender who can guarantee a closing date.

2. Do You Charge a Penalty for Prepayments?

In some areas, lenders may include extra fees if you manage to pay off your loan earlier than expected. Ask about whether the lender charges a penalty, and if they do, check to see if the penalty still applies if you refinance through the lender or pay off the loan within a certain time frame.

3. What Costs Are Included in the Loan Estimate?

Keep in mind you will not just be paying the lender back for the price of the loan plus the interest rate. When the lender gives you an estimate, ask about other additional fees associated with the loan, which may include costs for credit reports, house appraisals, taxes, recording fees, and house inspections.

4. Which Loan Would Work Best for My Situation?

A good mortgage lender should try to figure out a little bit about your unique situation and create a plan customized to your needs. Ask the lender to walk you through options like fixed rate, adjustable rate, negative amortization, and interest-only loans to get suggestions for loans that would work for you.

5. What Are the Discount Point Options?

Mortgage lenders should give you the option of paying points. Each point costs one percent of your total loan amount, and buying a point lowers your interest rate. Since paying points could end up saving you money in the long run, make sure to discuss what interest rate deduction the lender is offering.

6. Can You Lock in the Interest Rate?

Interest rates are constantly fluctuating, so the rate discussed initially could change by the time your loan funds. Ask the lender if he or she is able to lock in the interest rate. Some lenders will do this free of charge, while others require a small fee, but it may be worth it if interest rates are rising sharply.

Always work with a trusted mortgage lender when buying condos, lofts, or penthouses for sale in downtown San Diego. You should also work with a reliable real estate agent to find the properties you want. Contact 92101 Urban Living today at 619-649-0368 to schedule an appointment.