Four Important Questions To Ask Your Mortgage Lender Before You Sign Any Of Their Documents
1. Do you have a variety of loan programs to fit my cash flow and expected length of ownership needs?
If youíre going to live in your new home for less than five years, you may want to consider an adjustable rate mortgage or ďARM.Ē
With an ARM your payments will be lower, but they will go up according to the terms of the loan.
If youíre going to live in your new home for over five years, a traditional fixed-rate mortgage may be a better plan.
2. Do you offer written mortgage pre-approvals, not just pre-qualifications?
Jennie Shook's Buyer's November 2016 Newsletter
Four Quick Tips That Could Save You ThousandsÖ
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A pre-qualification is usually a Lenderís opinion of your eligibility for a loan. If you ask to be pre-approved, the Lender will actually submit your job and credit history to an underwriter and get a conditional approval for a loan and a loan commitment.
The advantage of having a pre-approval is that it will make your offer to buy a home stronger and it will usually allow you to close on the home faster.
3. Do you have the ability to handle difficult credit history?
Many Lenders will only work with you if you have perfect credit, and if a problem comes up, they wonít help you.
Make sure your Lender has reviewed and received approval for you and your specific credit history.
4. Is the rate you quoted me the rate Iíll get at closing?
Many Lenders advertise their rates in the paper and in homes magazines. These are called ďteaser ratesĒ in the industry. The name says it all.
After theyíve got you committed to using them, many Lenders then tell you what the ďrealĒ rate will be. By this time, itís too late for you to do anything about it
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You can use this list as a scorecard to rate each property you see. The one with the biggest score wins! This helps avoid confusion and keeps things in perspective when youíre comparing dozens of homes.
When house hunting, keep in mind the difference between skin and bones. The bones are things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan. The skin represents easily changed surface finishes like carpet, wallpaper, color, and window coverings. Buy the house with good bones, because the skin can always be changed to match your tastes. I always recommend that you imagine each house as if it were vacant. Consider each house on its underlying merits, not the sellerís decorating skills.
4. Donít Be Pushed Into Any House.
Your agent should show you everything available that meets your requirements. Donít make a decision on a house until you feel that youíve seen enough to pick the best one. Review the Multiple Listing printout with your agent to make sure that you are getting a COMPLETE list.
In the late 1980s, homes were selling quickly, usually a few days after listing. In that kind of market, agents advised their clients to make an offer ON THE SPOT if they liked the house. That was good advice at the time. Today there isnít always this urgency, unless a home is drastically under-priced, and youíll know if it is.