Thursday, August 14, 2014

Tips on Choosing a Mortgage Lender


Buying a new home is one of the biggest financial decisions families make in their lifetime. Choosing the right home though is only part of the process. It’s important to spend just as much time finding the right mortgage to ensure you are getting the best deal on your new home purchase.

In the points below, we break down the questions into categories from the legitimacy of the company itself, to the breakdown of rates, and where your money is going.

Questions about Lender:
1.    Are you licensed by the state and whom do you represent (bank, lender, finance company, etc)?
2.    Does your company hold loans or sell them to a third party?
3.    What different loan programs do you offer (VA loans, FHA loans, etc)?
4.    What is the average rate of your standard 30-year fixed loan?
5.    What additional fees does your company collect in addition to loan payments?
6.    How do you keep my personal information secure? Do you sell personal information to affiliates and other third parties? If so, what can I do to limit that sharing?
7.    What separates your company from other lenders in the same field?

Questions about the Loan:
1.    What is the interest rate of my potential loan? What determined that rate is right for me? What is the annual percentage rate (APR) of this loan?
2.    Is this rate fixed or will it change during its lifetime? If it will, by how much could it change? What is the average starting and ending rate for loans of this type?
3.    If my rate is locked, for how long is it locked? Are there additional fees associated with maintaining this lock?
4.    Are the taxes and insurance of my home going to be escrowed? Is this method mandatory?
5.    What are the estimated closing costs of this loan?
6.    When are my monthly payments and how much will they total to?
7.    Are there prepayment fees associated with this loan?

Asking these questions to potential lenders will give you a breakdown of each company and their offerings to ensure you can make an informed decision on your mortgage. Talk with our team of experts at Coastal Design Builders who can help you through the home buying process.

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