Thursday, March 10, 2005

Questions To Ask Your Lender

When a buyer is talking to their Realtor ® they must remember that the Realtor ® is not licensed to give you loan advice or information. They are licensed to act as an agent in the transaction among other duties. Discussing loans and specifics about loan programs is for the buyer to talk about with a lender, not the Realtor ®. You can ask the Realtor ® to recommend several lenders for you to choose from, but it is the buyers decision to choose one. The following are some good questions to discuss with your lender when applying for a home loan. Feel free to print out this information and take it with you when you vist a lender.

  1. Are both fixed-rate and adjustable mortgage loans available?
  2. What is the interest rate?
  3. How long can I "lock-in" the financing at the current interest rate?
  4. Is a float down lock available in case rates drop after I have locked in?
  5. What are the other fees a lender may charge me in conjunction with my loan?
  6. Are funds for a second mortgage available?
  7. On adjustable loans, how often will the interest rate be adjusted?
  8. Is there a maximum limit on each rate change?
  9. How often will the monthly payment be adjusted?
  10. Is there a ceiling on payment adjustments?
  11. Can the term of the loan be extended?
    What is the maximum rate that can be charged over the life of the loan?
  12. Is there any potential for negative amortization?
  13. Is there a pre-payment penalty clause? This involves extra charges for paying off the loan before maturity. About 80% of all loans in the United States are paid off early. What is the "grace" period?
  14. How late can a monthly payment be made before a late charge is assessed?
  15. What will happen if a payment is missed?
  16. If you sell your house, will the new buyer (if he/she qualifies) be able to assume your mortgage at the same interest rate?
  17. Do you have to pay "points" to get your new mortgage? Usually lenders charge points for the cost of giving you a mortgage loan. A "point" is 1% of the loan.
  18. Will the lender require mortgage insurance?
  19. Is the loan serviced locally or is the servicing sold? Ask for a written "good faith deposit".
  20. Did you tell your lender who your exclusive REALTOR is?

Please post any comments or questions about this here or on my website. Thanks for reading.

Ryan Kerzner, REALTOR
Direct: (805) 626.1111
Cell: (805) 509.6333 Fax (805) 648.5584


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