How Long Will The Loan Process Take

Category: Finance, Mortgages.

When you sit down with a mortgage lender, you should be the one in the driver s seat. To help you stay in control of the things that are happening as well as stay informed of what you need to do next or if you are dealing with the right lender, here are ten questions you need to ask.

After all, you are the one that will be paying for this mortgage in the coming years. What is the interest rate I will be getting with this mortgage? In order to negotiate for a good interest rate, you need to ask what you will be offered from a number of lenders, keeping in mind that a poor credit rating might be negatively affecting what you can expect. Obviously, this is the most important question that s already on your mind. Can I set up a way to lock in my interest rate? But if this isn t possible in the current market, you might want to choose a loan that has a variable interest rate, keeping you available to lock in the lowest interest rate once it comes up in the market.

The goal of any home mortgage is to get the lowest interest rate. This means that you might have to pay a higher interest rate for a while. Check to see just how long that is and how much it might cost you to lock in your low interest rate. And depending on the lender, you might need to stay in this variable interest rate setup for a certain time period. A good interest rate of about 6 to 7% is something a person with good credit can expect to get, though this does vary from region to region, lender to lender. This question is especially important when you don t have a lot of money to spend during the mortgage process. What are closing costs can I expect?

If you can determine the amount of the closing costs now, you can add these onto your loan to help you move the purchase along. If you ve set up a 30 year fixed mortgage payment plan, but you think you can pay it off more quickly, check to see how much it might cost you to do so. Will I be penalized if I pay my loan off more quickly? Since the lender will be losing money from the interest you won t be paying on the loan, they tend to create a penalty for those that pay off their homes sooner. In most cases, the lender will require that you provide 10 to 20% of the home s value as a down payment. What down payment is necessary?

However, this is not necessarily something that needs to come from your pocket- at least, not right now. Find out what the down payment will be and then if you can create a loan plan that will handle those costs too. You can actually add on the down payment to your mortgage with some lenders. How many origination and discount points will I be responsible for? These points can mean that difference between a high mortgage payment and additional costs and having a very reasonable agreement. If you don t know what points are, read up before you head in to talk with your lender. How long will the loan process take?

What might delay my loan or the approval of the loan? If you have a particular house or moving date in mind, knowing how long the lending process will take will help you choose the best mortgage company. By finding out what the potential problems can be during the loan process, you can make sure you are avoiding them. This is a great question to ask when you re not in the market at the current time. What do I need in order to qualify for this loan? It will give you a change to get your credit and your affairs in order so that you are the best possible candidate for a mortgage agreement. What documents will I have to have available?

Ask the lender to be as specific as they can about what you need to do. Since not all of us are great record keepers, you will want to ask well in advance of your loan process what you will need to find and have on hand for your loan application.