6 Questions to Ask Your Mortgage Lender

 

Purchasing a home may seem like an intimidating process, especially if you are a first-time buyer. To ease the stress of buying a home, ask your mortgage lender these six questions: 

• How Do I Determine My Homebuying Budget? 

Before setting your sights on a house, you need to know what you can afford. When setting a homebuying budget, it's important to have a seasoned mortgage lender review your finances including your assets, credit, income, and existing debt. Once your financial evaluation is complete, your lender can determine which loan and rate best fits your needs. More importantly, a good lender will help you determine not only what you qualify for, but what payment amount fits within your comfort level. The lender's goal is to make sure you obtain the house of your dreams while ensuring you do not stay up at night worrying about high payments.

• What Is the Interest Rate? 

Mortgage interest rates can vary based on your credit score, down payment, and the location of the home you are purchasing. Be sure to work with your mortgage lender to find the lowest rate for your particular mortgage program. 

• Which Loan Should I Choose? 

There are a variety of different loans available to homebuyers. Which loan is best for you largely depends on your specific financial situation. Common loan types that you may qualify for include: 

1. Conventional mortgages (fixed or adjustable)

2. FHA loans 

3. USDA loans 

4. VA loans 

Your mortgage lender will consider your loan qualifications and discuss with you each respective loan's terms and interest rate before matching you with a loan that best suits your needs. 

• What Credit Score Is Needed to Qualify for a Loan? 

Credit scores measure the likelihood of your ability to repay your loan. While different loans require different credit scores, the higher your credit score, the better your chances of loan approval. Conversely, if you have a lower credit score, your loan options may be limited. A credit score of 700 or above is considered good for loan approval; however, if you are well below that number, there may still be plenty of loan options available to you. When determining your loan options, your mortgage lender will factor in your credit score and discuss which programs you qualify for.

• How Much Should I Put Down for a Down Payment? 

The amount you need for a down payment can vary depending on which loan you're taking out. Despite popular belief, not all loans require a 20% down payment. With certain government loans, it's possible to put as low as 0 “ 3% down on a home. Your mortgage lender will be able to assist you in determining how much you need for a down payment.  

• What Is a Rate Lock? 

It's not uncommon for interest rates to adjust during the process of buying a home. A rate lock allows you to keep the same interest rate throughout the home buying process, regardless of changes in the market. If you currently have a low interest rate, you can ask your mortgage lender to lock your rate, so you don't have to worry about spikes in the market. 

Butler Mortgage: The Right Answer to Your Loan Questions

For over 25 years, Butler Mortgage has been working hard to find the best loan programs for both new and experienced home buyers in Central Florida. We can help answer all of your questions and determine the best loan for you. Call us today at 407-931-3800 to schedule your free consultation.