Many buyers on the University Hills real estate market secure a loan from a lender in order to purchase their dream home. But, if this is your first time buying a home, you may be confused as to how you can find the perfect lender for you. Take your time when interviewing different lenders and don’t forget to ask these important questions before making a decision:
How much do I have to pay now?
This is one of the first questions you should ask your lender because the answer can vary greatly. Some lenders will ask that you put as much as 20% down on a home, while other lenders can offer loans that only require a 3.5% down payment. If you’re on a tight budget, you need to know the answer to this question upfront, so don’t be afraid to ask it.
Are there any one-time fees?
Some buyers make the mistake of thinking that the only payment they have to worry about is their monthly payment once they move into the home, but that’s not the case. Lenders often have one-time fees that are due at closing, and you should know about them before signing any paperwork. These one-time fees are often referred to as “points” and many lenders will offer you the opportunity to pay some of these fees in exchange for lowering your interest rate. For example, if you pay one fee, or “point,” the lender will lower your interest rate by 1%. Discuss these terms in detail with the lender before you make a decision. Learn more about mortgage points
Will I have to buy mortgage insurance?
If you don’t have enough money to make a down payment of at least 20% of the home’s price, you may be required to purchase mortgage insurance. The price of this insurance will vary, but it tends to be fairly expensive, so it’s another expense that you will need to factor into the cost of your home.
Can I lock down the interest rate?
Interest rates rise and fall over time, so you might want to ask your lender if it’s possible to lock down your current interest rate. Most lenders are more than willing to do this for you, but it’s usually only for a certain period of time. Make sure you understand how long you have locked the interest rate and if there are any fees associated with doing so.
Should I work on my credit before getting a loan?
If you don’t have great credit, you may want to have an honest conversation with the lender to discuss whether you should attempt to improve your credit before taking out a loan. The lender may be able to offer you a better deal if you increase your score, so this is a conversation worth having.
Now that you’re ready to find a loan that fits your needs, it’s time to contact an agent who can help you find your dream home! Contact Elevation Realty
to be connected to a team of experienced real estate experts ready to help you on your home buying or selling journey.