You’ve decided you’re ready to buy a new home. Whether this is your first or your fiftieth, chances are you’ll need to speak to a lender about what is is you can afford, the interest rates that you qualify for, and your target mortgage payment.
These five questions will help you on your path to new home ownership!
1. What is the interest rate?
Your lender will offer you an interest rate based on the loan and your credit. The interest rate, along with the mortgage balance and loan term, will determine your real monthly payment. A loan with a lower balance or a lower interest rate will make for a smaller monthly payment. If you’re not satisfied with the interest rates offered, you can work on fixing your credit.
2. What is the monthly mortgage payment?
As you hone in on the budget for your new home, make sure you are explaining to your lender what you want your monthly payment to be. Oftentimes we forget to include insurance and taxes in your monthly payment- as well as potential home owner’s association fees. Your monthly mortgage payment shouldn’t make you house poor- you should be able to put your money to work for your other financial goals, as well!
3. Is the mortgage fixed rate or an ARM?
Fixed-rate loans are the same rate for the total lifetime of the loan, which can be 10 to 30 years. Adjustable-rate mortgages, or ARMS, have interest rates that change at regular intervals. If you don’t plan on living in your home for the duration of the loan, a hybrid ARM might be a better choice for you. Ask your lender to break down all of the available options.
4. Can you meet contract dates and deadlines?
Most local lenders are excellent at meeting contract dates and deadlines- like the appraisal deadline or closing date. If your lender cannot make the deadlines that are in your local real estate contract, they could potentially lose the home for you.
5. Do you have other mortgage products with lower rates I might qualify for?
Make sure you work with a lender who is capable of creative thinking and who can help you with your current situation. There are a variety of different mortgage products that may fit your needs better than a conventional option.
If you’re ready to buy a home and need to be connected with an excellent local lender, reach out to me. Finding a lender is often the first step in home ownership!
For any other questions, please don’t hesitate to reach out!