Mortgage Professionals are not all the same! Do your homework before you commit to one!
Many buyers make a huge mistake when they select a Mortgage professional. They make the decision based on Interest Rate. But that is only one aspect of your decision.
Questions to Ask
Before you commit to a Western New York lender, here are a series of questions you should ask them. Next to selecting your Real Estate Professional, the most important thing you need to select is your Mortgage Professional.
There are the obvious questions:
- Do You Offer Loan Rate Locks?
- Is There a Prepayment Penalty?
- Are You Equipped to Approve Loans In-House and will you guarantee the Good Faith Estimate?
- How Much Time Do You Need to Fund?
Read Also: How do I know if that mortgage rate just quoted me is good?
But let’s talk about some questions you should ask potential Western New York lenders before you commit to working with them.
Which Type of Loan is Best?
A great Western New York Mortgage Professional will want to discover more about you and your goals before throwing out loan options. The options are very dependent on what you plan on doing over the next couple of years. One loan is better in certain situations and another loan is better in another. Your financial health will also affect your options. Just think about it, you would not want a doctor to suggest unnecessary surgery before they take a complete medical history?
A great lender will want to explain the pros and cons to you about:
- Fixed-rate loans
- Adjustable-rate loans
- Interest-only loans
- Negative-amortization loans
Read Also: How to Keep Your Mortgage Approval
What Are All the Loan Costs?
Each “point” is equal to 1 percent of the loan amount. Therefore, 2 points on a $100,000 loan cost $2,000. Sometimes lenders charge origination fees in addition to points. Points “buy down” the interest rate, meaning the more points you pay, the lower the interest rate. Points are also tax deductible, even if the seller pays some or all of the points.
Your lender will explain all the costs of a loan. This will include not only fees that go into the lender’s pocket but also related third-party vendor fees such as:
- Appraisal
- Credit report
- Lender’s title policy
- Pest inspection reports
- Escrow (where applicable)
- Recording fees
- Taxes
An estimate of these fees constitutes the Good Faith Estimate or GFE, which the lender is required by federal law to give to you. Ready to speak with a lender before you start your home search in Western New York? Give me a call at (716) 743-5297 or fill out the form below.
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- Loan Application Checklist for Buyers
- What is a Real Estate Appraisal?
- Is the economic slowdown done?
- Documents to gather before meeting with your Mortgage Professional.
- Buyer Assistance Programs in Western New York
- Earnest Money Deposit on your new WNY home purchase
- Do You have the Credit Score Blues?
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