Knowing your financial options is necessary before you buy your home.
Buying a home is one of the most time-consuming aspects of adult life that you will come across. Before you even start searching for your potential home candidates, you’ll need to spend hours with mortgage lenders to understand which changes you’re going to have to make your new budget. Here are 4 questions to ask your lender to make sure you are getting the best interest rate.
- What’s the monthly mortgage payment?
Developing your new budget for your new home is crucial for both your short- and long-term goals. Be sure to include insurance and taxes in your monthly payment calculations. Your new mortgage payment shouldn’t be so high that you’re left with $0 after all is said and done.
- What’s the interest rate?
Lenders will offer you an interest rate based off of your loan and credit score. The interest rate will determine your real monthly payment. If you’re not pleased with the interest rate that was provided to you, take some time to clean up your credit score so that you qualify for a lower interest rate.
- Are there any prepayment penalties?
This may sound silly, but you could actually get penalized for paying off your mortgage early. Don’t forget to ask about any prepayment penalties.
- Is the mortgage fixed or an ARM?
Fixed-rate loans keep the same interest rates for the duration of the loan—which can range from 10 to 30 years. ARMs (Adjustable-rate mortgages) have interest rates that will change after an initial period and in regular intervals. If your loan is an ARM, make sure to know the “grace” period, and how many times the rate will change.
Knowing your mortgage like the back of your hand is something that a responsible homeowner should do. Choose the one that’s right for you! For all of your home buying needs throughout the Solana Beach, California area, contact the professionals at Ranch & Coast Mortgage Group Inc.
