Obtaining Financing – The Important Questions to Ask
When you first set out to obtain financing for a mortgage, it’s important that you shop around and ASK QUESTIONS! You’ll find that mortgage brokers will tell you the best deal that they can get you, but it’s super important to ask the right questions and understand ALL of your financing options before you decide the route you want to take.
Often times people assume that what’s best is that option that requires the least amount down but that may not always be the best.
For example, if you have a 620 credit score you may qualify for 5% down on a conventional loan. At the start that may seem good, however, remember the less you put down, the higher your payment will be. Also, in certain situation where you only put 5% down you may be required to purchase mortgage insurance which adds to your monthly costs (roughly $100+ per month). Here are some sample questions that you should as you evaluate financing options:
- Did I complete the loan application correctly?
- How much house can I afford?
- Do I qualify for FHA or conventional financing?
- What are all the possible options when it comes to down payments?
- Am I required to get mortgage insurance? If so, how will that affect my payment?
- Should I get a 15-year or 30-year mortgage?
- What’s the best interest rate I can get? What can I do to get a better interest rate?
Remember…knowledge is power! ASK QUESTIONS!