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Questions To Ask Your Mortgage Lender

In a newsletter we mailed to our clients, we provided 4 questions to ask your mortgage lender before signing their documents. These are the basic questions that help you determine if you are working with the right lender.

1.  Do you have a variety of loan programs to fit my cash flow and expected length of ownership needs?

If you’re going to live in your new home for less than five years, you may want to consider an adjustable rate mortgage or “ARM.” With an ARM your payments will be lower, but they will go up according to the terms of the loan. If you’re going to live in your new home for over five years, a traditional fixed-rate mortgage may be a better plan.

With whatever lender you choose, you should have the ability to have multiple options to fit your lending needs. If you are a first time home buyer and need down payment assistance, be sure to ask your lender what down payment programs are available. The most popular is the 3.5% down payment with the FHA loan. An experienced lender will give you options to discuss what will be in your best interest.

2.  Do you offer written mortgage pre-approvals, not just pre-qualifications?

A pre-qualification is usually a Lender’s 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.

At Stateline Funding Corp., we issue pre-approvals. We never let our buyers make offers without have the guarantee that they qualify for the loan.

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 won’t help you.  Make sure your lender has reviewed and received approval for you and your specific credit history.

If you have credit issues, ask your lender what steps you need to take in order to be qualified to purchase a home. If they give you steps, make sure you follow them so you can be able to purchase sooner than later.

4.  Is the rate you quoted me the rate I’ll get at closing?

Many Lenders advertise their rates in the paper and in homes magazines.  These are called “teaser rates” in the industry.  The name says it all. After they’ve got you committed to using them, many lenders then tell you what the “real” rate will be.  By this time, it’s too late for you to do anything about it.

This happens all the time in our industry. At Stateline Funding Corp. we monitor real time rates. We are able to understand what affects the interest rates and changes them on a daily, even hourly basis. We have even had prospective clients experience this teaser with other company’s, but they are too involved in the process to back out.

We always deliver on whatever we promise. We are not in the industry to manipulate home buyers, we are here to help. You should be working with a mortgage lender that cares about you as an individual, not a number.

So remember as you are looking for a mortgage lender to ask these 4 important questions before you begin the process.

Tips on Buying a Good Home

1. Buy a Home You Can Afford

Make sure when choosing a home that you are comfortable with the mortgage payment. You do not want to purchase a home in a price range that will leave you scrounging for money each month just to make the payment. You need to keep in mind the other payments you still have obligations towards, such as a car payment, student loans and other expenses that add up.

A certified mortgage planning specialist analyzes your debts and will inform you on what a reasonable and realistic house payment is based on your scenario.

2. Make Sure You Can Stay Put

You don’t buy a home with the intention of moving right away. You should only purchase if you are planning on staying put for a few years. A home is an investment. If you are not able to make the commitment of staying in the home for a few years, then you may want to reconsider purchasing at that moment.

3. Get Pre-approved Before Looking

Without a pre-approval from a mortgage broker, you really are not in any position to look at homes. A pre-approval secures the fact that based on your income, assets, debts that you will qualify for a specific price range of homes. You should always seek a pre-approval from a lender to ensure you are not wasting your time, or a realtor’s time in looking for a home.

4. Know Your Credit

If you have issues on your credit report, you want to start getting those fixed before trying to buy a home. You need to also make sure you are current on all credit line payments and not maxing out your credit lines. Also, when you are in the middle of purchasing a home, DO NOT open new lines of credit. You do not want to open any new lines of credit, because that can affect your ability to purchase a home.

5. Do Your Homework

More often than not, homebuyers fall in love with a neighborhood but haven’t done their homework. You need to find more information about the taxes for that area as well as if there is an HOA (Home Owner’s Association) fee. These two things can really increase your monthly payment and you need to be aware of the full cost of the home. You not only have the mortgage payment, but you will also have to pay taxes, insurance and possibly an HOA fee.

A certified mortgage specialist has access to this information for any home on the market. Ask them to research a home in that area to find out what exactly you will be paying.

 6. Choose an Area With A Good School District

If you are just purchasing a home and have small children, or planning on having children, you want to make sure you choose an area that has a good school district. Since a home is an investment, you should only purchase if you are planning on staying a while. You will want a good school district, so do some research on the area before purchasing.

7. Start Saving Your Down Payment

Depending on what loan program you are able to purchase under, you will need to bring in a different down payment. Majority of homebuyers tend to put down anywhere between 3.5 percent to 20 percent of the home price. Start saving the down payment so when it’s time to make an offer on a home, you have the strength of a solid down payment.

8. Work With Respected Professionals

Buying a home is not a simple process, so you need to make sure you are working with the best people to help you through the process. This should be a fun and exciting time, but there will be some stressful moments. Do your research, read reviews, and choose a mortgage professional that knows what they are doing, and has the history to prove it. If you don’t have a real estate agent, your mortgage broker will more often than not guide you to a great real estate agent that will meet your needs.

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