Financing
The single biggest expense in buying a home is the cost of financing. Lenders fees, the terms of your loan, your interest rate, prepayment penalties are designed to benefit the lender, not the borrower, so it's critically important you understand the details of the loan programs available to you before you sign on the dotted line.
Before You Look for a Home
- Review your budget. What monthly payment fits you're needs.
- Review your credit status. Check all three credit reporting agencies to make sure all information is correct and up to date. Resolve any outstanding issues.
- Decide what amount you will use for your down payment.
- Interview lenders including at least one mortgage broker and one direct lender, such as a bank or credit union.
Ask Your Lender These Questions
- Exactly what fees and rebates will you and/or your company receive as a result of my mortgage? How are these fees and rebates paid?
- As I evaluate different loan programs, will you tell me
clearly the difference in costs (including closing costs and
costs over the life of the loan) to me of the various loans I'm
considering?
- What expenses are to be paid in advance? If I decide to use another lender, will I get my original loan package back, and what expenses will be refunded to me?
- What guarantee is there I won't be surprised by junk fees and unexpected expenses at closing?
- If I pay for an appraisal or credit report, how soon will you give me copies of them?
- What is your policy about disclosing sale price to any
appraisers hired to evaluate the property I am purchasing?
- Will you explain the reason for all of my closing costs related to my mortgage?
- Can you provide a list of past borrowers for references?
- Who can pay a portion of my closing costs and are there any limitations on how much they can pay?
- What information will you give to others including the property owner, real estate agents and others?