According to homes.com buying a new home is one of the most stressful experiences in modern life. Luckily, working with a great loan officer can go a long way in reducing that stress. Below are a few questions to ask your loan officer so you can prepare yourself prior to making that big purchase.
1. What type of loan is right for me?
There are a plethora of mortgage products available to every homebuyer and determining which one best suits your needs can be a challenge. Down payment, loan term, interest rate, and closing costs can all vary from one product to another. Because of this, it is important to explain all financial goals to your loan officer, that way, they can help you determine which type of loan is best for you.
2. How much can I afford to pay each month?
How much you qualify for and how much you can really afford are two important topics and often they get confused with one another. You may be approved for a larger loan than you would feel comfortable paying and understanding how much it will cost each month to cover all expenses is extremely important.
3. How much will I pay each month?
Make sure you ask your loan officer what your starting monthly payment will be and if any aspects of your payment can change and if so, why. Will your property taxes increase? (they might) Can mortgage insurance go away? (it can) Will you have a separate payment for HOA dues? (yes) All of these questions are important and understanding how your monthly payment works is crucial when making this important financial decision.
4. How much money do I have to bring to closing?
Your down payment is not the only thing you have to bring to the closing table. Closing costs, typically ranging from 2-6% of the purchase price, are an additional expense that cannot be overlooked. Also, make sure you ask your loan officer what you can do to lower closings costs before you present an offer to buy a new home.
5. What can I do to make sure I close on time?
Closing on time is important, not just because it keeps your earnest money deposit safe, but because it makes planning your move less stressful. It is important to share any timelines with your loan officer so they can make sure delays do not get in your way. Also, make sure you avoid these Five Common Mortgage Mistakes.