Questions You NEED To Ask A Lender When Getting A Mortgage Loan
Purchasing a home is a big step, and you want to do everything right. For most people, buying a home will be the single biggest purchase they make. When you looking for homes for sale in Long Beach, you want to know what questions to ask your lender.
Why the Lender You Choose is Important
You want a lender that is easy to talk to, can explain the process to you, and will help you get the best deal possible. Paying off a home is a marathon, not a sprint, so you want to work with someone you trust and have confidence they will be around if needed.
You are not obligated to work with the first lender you approach. Feel free to talk with more than one until you find someone you are comfortable with.
When talking to each lender, there are some basic questions to ask.
1- Are loans approved in-house?
The answer to this question is particularly important if you have some obstacles that make getting financed a challenge. A lender that approves loans in-house is more likely to take personal circumstances into account and work to get you approved. It is rare to find outside underwriters who will go the extra mile for clients.
2- Can you explain the best loan for me?
Lenders work with mortgages all day, every day, so it is easy for them to forget what a big deal buying a home can be. You want a lender that can talk to you about the different financing options, such as VA loans, FHA loans, and traditional mortgages, and explain which would best fit your circumstances.
3- What type of documentation do I need?
Applying for a mortgage is a paperwork-heavy endeavor. Find out the type of documentation you need to bring with you to save time and stress. Generally, you are expected to provide official identification, proof of income, information on existing property if applicable, and paperwork showing balances for your various spending and savings accounts.
Depending on your particular situation, you may be expected to produce paperwork related to any divorce settlements, a letter of explanation for any credit issues, or a gift letter if you are receiving financial help from your family with the purchase.
4- How much should I have available for a down payment?
The traditional wisdom is that you will need 20 percent of the purchase price as a down payment on your property. While a larger down payment is always nice, it isn't necessary. You can often find lenders who provide financing as long as you have at least 3 percent of the purchase price to put down. If you are a first-time homebuyer purchasing a qualifying house, you may not need a down payment at all.
The option of a smaller down payment is nice, but if you have the funds, you may benefit from using them. Smaller down payments mean taking out private mortgage insurance, which is tacked on to the mortgage payment each month.