Five questions you need to ask of your mortgage lender

King bell

VIP Contributor
When you're shopping for a mortgage, it's important to ask the right questions of your lender. Here are five key questions to make sure you get the best deal possible.

1. What are the interest rates and terms?

Of course, you'll want to know what the interest rate is on your mortgage. But it's also important to ask about the terms of the loan, including the length of the loan and any prepayment penalties.

2. What are the fees and closing costs?

Be sure to ask about any fees associated with the loan, as well as closing costs. These can add up, so you'll want to know exactly what you're paying.

3. What is the loan's purpose?

You'll want to know what the loan is for, whether it's to purchase a home, refinance an existing loan, or something else. This will help you determine the best type of loan for your needs.

4. How much can I borrow?

Be sure to ask how much you can borrow. This will vary depending on your income, debts, and other factors.

5. What are the risks?

Be sure to ask about any risks involved with the loan. This includes things like prepayment penalties and interest rate risks.
 

Caramelle

Active member
If you're buying a home, you would also want to find out if the mortgage amount will be sufficient to cover the entire purchase price of the property. If not, what percent or amount would be covered by the housing loan? If the mortgage amount is less than 100% of the price, the home buyer may have to pay a substantial sum of money in order to secure the property. The mortgage amount is determined after considering several factors which may include the assessed value of the property, the borrower's capacity to pay, and some other caps and criteria that a bank may impose.

If there are indications that interest rates will go up in the near future, you may want to ask for a locked-in rate. This could help you save a substantial amount of money. Some housing loan providers will allow locked-in rates for 10 years depending on the loan term.
 
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