Building a home doesn’t come cheap. And, unless you have substantial savings, you will need financing support from a mortgage lender. As a smart borrower, however, there are some questions you ought to ask your lender before signing a contract. It will not only enlighten you about the deal at hand but also go a long way in helping you make an informed decision. Below, see some of these must-ask questions.
Which loan program is the best?
It’s worth noting that there is a myriad of loan programs that are available in the market. Each one of them is different and suits different people depending on the needs and qualifications. Therefore, ask your lender the type of loan that suits your needs. A reputable lender will break down all the programs to you. They will also listen to your needs before they can go ahead and recommend to you one that suits your needs.
What is the interest rate?
It will be wrong to assume that the interest rates of mortgage companies in Phoenix are standardized. Several factors, such as the type of loan and your credit status, affect the interest rate. Knowing your interest rate will also help you determine your monthly payments. Ask for the breakdown of the mortgage rate, the loan term, and the balance thereof. This way you will be able to plan yourself financially.
Are there prepayment penalties?
It’s always prudent to ask if there is a prepayment penalty. And, as much as this may vary from state to state, it’s still good to be on the light. If it’s there, seek to know how much it is and the terms thereof.
Understanding your financing options will help you make informed financial decisions. Asking your lender the above questions will not only help you understand the more profound terms of your mortgage, but they also help you take advantage of the real estate openings in the market.