Questions To Ask When Shopping For A Home Loan

By: Allan Wilson

As you're looking around for a home loan, it's important to be prepared with questions to ask each lender. This set of tips will help you feel better prepared to talk to various lenders.

Is There are Professional Package Discount?

If you're earning $50,000 per year (or $80,000 with a spouse), ask your broker about their professional discounts. You may be qualified to get a lower interest rate, usually 0.5%.

What Fees Do You Have?

Be sure and ask prospective lenders about their fees. Fees for buying a home will be discussed a bit more later, but each bank has their own fees. Make sure you ask your broker to show you all of their fees and what they mean.

Can I Pay Off My Loan Early?

This is a very important question to ask. Believe it or not, some banks will charge you a fee if you pay off your loan early. Ask about this, and find out when the penalty applies.

When is the First Payment Due?

It's important to ask when your first payment on your loan is due. It's easy to get caught up in all of the paperwork and moving, and then miss your first payment. It's important to make that first payment on time.

How Fast Can I Start Building Equity?

It's a good idea to build equity early on so that you can use that financial power to improve your home or finance other purchases or loans. Your lender should be able to tell you how you can use your equity as your loan progresses.

There are some other things that you can do to help you get a home loan. This next set of tips will give you some more ideas.

First Homeowner Grants

Look into first time homeowner grants to help with your down payment. Most state governments offer grants for this purpose. Make sure and do your research and take advantage of everything that's available.

Borrowing Your Down Payment

If you borrow your down payment from a friend or family, make sure you put it in your bank five or six months before you apply for your mortgage. Banks don't want you to do this because they figure if you have to borrow money for your down payment, you can't afford their loan. However, most banks only check your statements for the past three months, so anything that's already in there is safe from scrutiny.

Get the Right Loan For You

The bottom line in getting a home loan is to make sure that you get the right loan for you. We all have individual needs. Talk to your broker and make sure your loan meets all of your needs.

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