Ten Questions to Ask your Mortgage Officer When Applying for a Loan

Finding financing for a home is very much a time-consuming process. In an effort to speed up this process, many homeowners often skip important steps. However, doing so can lead to many problems in the long run.  When sitting down with your mortgage provider you need to ask the following questions in order to ensure that everyone involved is on the same page:

• What are the exact terms of my mortgage? – Though it may seem like a straightforward agreement, you need to make sure that everything is explicitly in writing before signing a mortgage contract.  Perform a detailed run through of the payment plan with the loan officer so that you know what is expected from you month by month, and year by year.

• Are there any penalties for paying the mortgage off early? – In the future, you might want to pay off your mortgage should you find yourself in better a financial position. When this happens, you might have to pay penalty fees, so find out if this is the case.

• How much interest will I be paying now? In the future? If you sign up for a fixed rate mortgage, it will be simple to find out what your current and future mortgage rates will be. However, if you are signing up for an adjustable rate mortgage, you will want to find out what the projected ranges are.

• How much of each mortgage payment goes toward the principal and how much is going toward the interest? – When you are paying off this large of a loan, you will want the majority of each payment to go toward the principal as this will help to reduce your overall interest payments.

• Are there any closing costs? - In order to ensure you can cover costs associated with buying the home, inquire about all closing costs and other fees that you might incur.

• Can I qualify for a fixed rate mortgage? – If you would like your mortgage payment to be a set amount each month it would be beneficial to see if you qualify for a fixed rate mortgage.  While the payments might be higher, they won’t fluctuate.

• What is the required down payment? – When you are applying for your mortgage, you will need to pay an upfront portion of the total cost of the home.  Finding how much the down payment is will help you to decide whether you need to get a specific mortgage that will cover it.

• What documents do I need? – Since applying for a loan is a major financial transaction, the mortgage lender will probably want to see a number of financial records from you.  Be sure to ask in advance about what papers you will need so that the process goes smoothly.

• Is there anything I need to qualify? - You should ask this question before you even begin the application process.  It is important to find out what kind of qualifications your loan will require in order to accept your application.