Many people these days decide to buy their own house instead of renting from someone. However, not everyone has this type of money to spend in their account, so they apply for a mortgage. As you can read on The Mortgage Broker website – “Most people recognize a property is the largest and most expensive thing they will buy in a lifetime”.
People who are applying for a mortgage are usually so stressed about whether they will get approved or not, that they tend to forget to ask some of the most important questions. It is especially the case for those who are doing it for the first time but not only. Some people are like this in general – when they stress, they tend to forget things.
So if you are one of those people, here is a list of top 4 questions that you should never forget to ask the mortgage lender. If you feel like you will forget them, just write them down and take them with you. Without further ado, let’s get to it!
1. What documents will I need to get the loan?
This is one of the most important questions that you should ask your mortgage lender or broker. Remember that if the person and what they do is legit, they will tell you about it without you even having to ask. Depending on what type of loan you’ll choose, you will most probably need:
- identification – could be a passport, ID card or a driving license
- income – documents such as the tax return documents from the last two years, thirty days of pay stubs or any other document that will serve as a proof of additional income.
- accounts – if you have any retirement or investment accounts; bank statements from the previous two cycles
- property – if you had a property before, you need to have a statement showing its settlement
- additional documents – for example, a gift letter from a family member that is willing to help you financially or landlord contact info
2. What type of loan will be the most suitable for my needs?
Buying a house is probably one of the most significant investments in your life. That’s why it’s important that the loan you take will suit your needs. A good mortgage lender will study your documents and find the best option for you, as not every loan program might be suitable for your financial situation. They will also go over everything with you and tell exactly why it is the best option for you.
Watch out for those mortgage lenders who will try to overwhelm you with available options without even listening to you, or studying your documents. There’s a big chance that they will try to scam you or persuade you to choose a loan program that is not suitable for you at all. Also, if you rush into making a decision, you might end up with very bad financing terms.
3. Do you approve loans in-house?
Getting a mortgage loan is a process in which there are more people involved than you might think. The person you will probably interact with the most is the loan officer. However, there is also, for example, a mortgage underwriter who will determine whether you’ll get the loan or not.
It’s important to choose a company that approves the loans in-house, as they will be able to solve problems that might occur better than a company that approves the loans out-of-house. For example, if there happens to be a problem with your credit report, the mortgage underwriter can talk to the officer, and together they can solve the problem. When it comes to the out-of-house mortgage underwriters, they will probably deny the loan without giving it a second glance.
4. What kind of down payment will I have to make to get a loan?
Some people think that to get a loan, you need to have 20% down. However, nothing could be further from the truth. Even though the loaners prefer it, it is not a necessity. Furthermore, there are programs available thanks to which you can get a loan even if you have 0-3.5% down. That’s why, before getting a loan, you should always ask what the requirements are.
Also, keep in mind that if you have the possibility of putting the twenty percent down, you should do it. This will spare you from having to pay the private mortgage insurance, which tends to be expensive. You can ask those who had to deal with it – they probably did everything to pay it as soon as possible.
Applying for a mortgage loan can be very stressful, especially if it’s your first time doing it. While in stressful situations, people tend to forget things. If you are one of those people, it’s important that you write down all the questions that you want to ask before meeting with a mortgage lender. And don’t forget the ones written above – you might be surprised by how much you can find out just by asking them. Good luck!