Finding a good mortgage lender is as important and as tedious a job as finding the best real estate agent in Newport-Beach. You need to do a little shopping before you pick a lender. Once you have quite a few offers form mortgage lenders, it is time that you start a comparison study of the offers you have received. Ask a few questions and find the best suited mortgage for yourself.
What is the rate of interest on your mortgage?
The rate of interest the mortgage lender offers you will depend largely on your credit score. However, you need to know the interest rate which will determine the amount of money you will need to pay throughout the tenure of your loan. Again, if your credit score is not good enough, you may not be offered the lowest rate of interest. To be able to compare the different offers ask the lenders for the Annual Percentage Rate (APR) because that is normally greater compared to the initial rate that was quoted to you. This way you can make a better comparison.
Do you have to pay for points?
Often time’s lenders may offer you the option to pay for points which means you pay an upfront fee and in return for that your rate of interest is lowered to a certain amount. You could ask the lenders if they offer such options and if yes then how much money you are expected to pay as well as the kind of points you will be paying for.
What do closing costs involve?
A real estate agent Newport-beach may be able to help you with the closing costs by calculation and giving you an approximate figure. However, if you speak with your mortgage lender, he will be the best person to give you the fairest idea about these costs. It may usually be 3.5% of the amount of loan you get approved for. These costs may include items like escrow amounts attached to taxes as well as insurance, fees for preparing the legal documents, application and appraisal fees, loan origination fees, tax transfers, title insurance and a few other miscellaneous fees. Lenders are able to send you a better estimate once you have made an application for the mortgage. However, you can only receive an exact figure for the final costs you need to pay only one or two days before the closing. You will receive this from your Newport-Beach real estate agent.
Can you lock the interest rate?
If you have chosen a flexible rate mortgage, your interest rate will fluctuate in between the time that you apply for the loan and the time of closing. After the introductory period of five years and 10 years, your rate of interest will go up significantly. However, you can lock the rate of interest and prevent it from moving up in a significant manner. You should ask your lenders if there will be a separate fee for locking the rate. You may even like to read some Rate Trend index to find out the trend of rates in the market.
Does this loan have payment penalty?
Your loan officer may not be telling you this but there could be a prepayment penalty on your loan. Although it may be just 1% of the loan amount but there is also other lenders who charge penalties at the rate equivalent to six months of interest. If there is a penalty, then find out how long the period will be and how is it calculated.
What should put down the minimum down payment?
Ask your realtor how much money you have to pay towards down payment. Usually the rate is 3 percent to 20 percent.
How long to get the loan approval?
Unless you get that loan you will still remain anxious about it. So, be careful that you provide all the correct documents. Your lender might give you a window of two weeks. However, make sure the lender has your right home address and the latest financial details to be able to send you the loan amount.