Questions You Should Ask Your Mortgage Lender

When you finally select the mortgage lender that is right for you, there are a number of questions you need to ask the lender in order to make sure you get the terms you are after. Of course, one of the first questions potential homeowners ask is how much the interest rate will be. This is certainly a question that should be asked, but there are many more.

For example, one thing you should be sure to ask your lender about is prepaid mortgage points or others steps you might be able to take in order to decrease your interest rate. Ask how much these points will cost and then find out how much you will save by taking advantage of these points.

You also need to ask the lender about the closing costs involved with the loan. Taking out a mortgage loan involves paying a variety of fees. Find out about these fees beforehand in order to be clear on the additional costs you will be expected to pay. Similarly, you need to find out when you can lock in the interest rate that has been quoted to you and how much it will cost to lock that rate in.

Another consideration that many potential home owners fail to consider is whether or not there will be a penalty for paying the loan early. Some lenders do levy penalties if the loan is paid off early. Some may charge you 1% of the loan amount while other may expect you to pay six months worth of interest. There are a number of other formulas that may be used by the company to determine your penalty, so be sure to ask before signing a contract.