Deciding to buy a home is an important decision. Many soon-to-be homeowners start thinking about their dream residence before they have done any of the required financial work. Often, this can lead to disappointment once they realize just how much needs to be done before move-in day.
If you have found yourself in this situation, The Reichert Mortgage Team understands. It is much more exciting making a new-house-checklist than it is locating a Colorado mortgage company. However, finding a reliable mortgage broker is one of the first steps toward homeownership. By picking a mortgage broker early-on, you are taking a big step toward owning your dream home. Our team has generated this list of top mortgage questions so you know what to ask a potential mortgage loan broker.
- What Type of Loan Is The Best for My Situation?
There are a plethora of different loan options available for homebuyers. Any reliable mortgage broker will ask follow-up questions to get a better understanding of your situation. From here, they will give recommendations based on the information you provide.
- Do You Offer Conventional or Government-Backed Loans?
Asking which types of mortgage types a broker offers will help you understand how many options are available to you. Most people are used to hearing about conventional loans, but in some cases, you may be eligible for federally insured options like USDA or VA loans. Not every mortgage broker has the correct qualifications to offer both varieties.
- How Much Am I Required to Pay for a Down Payment?
The amount you put towards a down payment can shape the future of your mortgage. The more you are willing to put down, the better. Plus, if you decide to pay the standard 20%, you cancel the PMI (private mortgage insurance), which can result in a lower monthly cost.
- What Is the Turnaround Time to Close on My House?
Since there are so many complicated steps involved in the approval and finalization processes of a mortgage loan, it can take up to 40+ days for you to close on a house. This is dependant upon the financial situation, any possible delays, and your contract.
- What Is the Difference Between Preapproval and Prequalification?
Many people use these terms interchangeably, but they are very different. A prequalification is a face-value assessment where you answer questions and get an estimate on the loan amount you may qualify for. Preapproval is more in-depth with verification of income, assets, and credit. These are all considered to generate the loan you can receive.
- Are There Any Prepayment Penalties?
In some cases, prepay penalties may apply to your mortgage. These are fees that will charge you more money if you try to make extra payments towards your loan. If you feel that paying off your mortgage early is something you are looking to do, it is essential that you ask about these penalties.
- Can the Homebuying Process be Delayed?
Yes, delays can occur. Delays are a normal part of the mortgage process. Generally, these types of halts are minimal and do not result in major disruption. Stay involved as you go through the various stages. The more proactive you are about providing up-to-date documents, the less likely unforeseen obstacles will hinder your progression.
- How Much Will the Closing Costs Be?
Depending on the size of the loan and any applicable fees, you can expect to pay anywhere from 2-6% of your total loan value to cover closing costs. Ensure that you account for this to avoid expensive surprises.
- How Will My Interest Rate Affect My Mortgage?
Out of all the mortgage loan aspects, the interest rate is the easiest to understand. The higher your interest rate, the more you will pay over the course of the loan. With a lower interest rate, you save money over time because you pay less. To get a good rate, it helps to have a good credit score.
Empowering Buyers With Free Mortgage Education | The Reichert Mortgage Team
If you ask a mortgage broker at The Reichert Mortgage Team any of these questions, you will get straightforward, thorough answers. As mortgage brokers in Colorado Springs, our team dedicates itself to providing free mortgage education to the El Paso Community. We specialize as VA mortgage brokers, but also provide conventional loan options as well. Do you have more mortgage topics to discuss or additional mortgage questions to ask? We have you covered! Contact our team today to get started!