It is always suggested and advised to get thorough knowledge of the entire loan process and essentials by asking potential mortgage questions to the lender before committing to a loan. Your entire life would be affected by the loan you would take, thus anticipating fees, the right type of loan and everything related to it must be the answers you get from the mortgage lender.
Always remember that your broker must have a piece of complete knowledge about you to suggest the best loan and to answer your questions perfectly.
The questions to ask your mortgage broker are mentioned in this article. So, read on.
Which Type of Loan Is Best for You?
It is essential for your brokerage lender to have complete information about you before recommending a particular type of loan. The lender should be in a position to explain the following details to you:
- Fixed-rate Loans
- Adjustable-rate Loans
- Interest-only Loans
- Negative Amortization Loans
Based on these above points it will be easy to analyse which kind of loan would best fit as per your personal circumstances.
What Is the Interest Rate and Annual Percentage Rate?
The APR that is the annual percentage rate of the loan is retrieved through a complex calculation that includes the interest rate and all the other related lender fees divided by the loan’s term. Calculating the APR is different and unique to individual brokers and there’s no way to calculate an APR rate for an adjustable mortgage accurately. If there are early payoffs then an APR does not account for it. In case your interest rate is adjustable, your broker can pin down the adjustment frequency and the maximum annual adjustment along with the highest rate, index, and margin.
How Much of a Down Payment Is Required?
Generally, it is a 20% down payment that is demanded by the financial organizations, although it’s not mandatory as you can pay as little as 3% with some types of loans if certain factors are satisfied. Lenders tend to offer the lowest interest rates when you have at least 20% equity in your home.
What Documents Will I Need to Get a Loan?
The most basic question that one tends to ask what documents they will need. Generally, a good mortgage officer would tell you before you even ask. Depending on the loan program you end up you’ll more than likely need these things:
- Identification – either a driver’s license, passport or official state/federal ID.
- Income – including 30 days of pay stubs, your previous two years of federal tax returns, proof of any additional income.
- Accounts – such as bank statements for the last two cycles, investment or retirement accounts.
- Property – a statement showing the settlement of your prior home if you had one.
- Additional documents – forms such as a gift letter from a family member helping financially, landlord contact info (if applicable), letter of explanation for such problems as credit issues and divorce-related documents (if applicable).
It is quite known that these are just a few questions and any loan aspirer would have lots up his sleeve for questions. At APW Finance we are here to help you with any questions that pop into your mind. Talk to our experts about what to ask a mortgage broker.