After taking the plunge and purchasing a new home most people are eager to get in and make the home their own. Whether this is your first home or your fifth it is important to have a set of basic questions to ask your mortgage lender or banker. Here are a few questions you should be ready to ask any lender you are thinking about working with.
What are your feels?
For the past years we have seen all kinds of advertisements promoting loans with no fees, no points but this last week the bond market sold off, interest rates rose slightly and now we are still seeing rates at 3-4.4% but most lenders are charging a one point fee. Thus knowing the current fees and knowing how your loan companies or lenders make their money is important to understanding how much a mortgage will cost you.
What programs do you have?
Many lenders including banks, mortgage brokers and credit unions off er diff erent types of mortgages. VA< FHA, fixed rate loans, adjustable loans, rural housing loans, rehab loans, low down payments loans and more that you can take advantage of if you ask. Some local assistance programs may also be available under your county so be sure to ask.
When can I lock in my rate?
Interest rates fluctuate and can change from the time you are initially approved to the time you close on your loan. Knowing when the lender has locked in your loan rate is key to calculating the fi nal cost of your mortgage.
There are so many choices out there today-- take the time to work through the numbers, understand how long you will keep a property as that matters, know what you can afford and whether or fi xed or adjustable rate is the best for you. With the new tax laws know that now you can only deduct up to $750,000.00 of interest on a primary residence only and lines of equity interest are no longer deductible. Also remember that any interest you cannot deduct because you are over the loan limit is not dollar for dollar but will based loan on your average income tax rate. So if you are $50,000 over the limit of the cost to you would be $50,000.00 times lets say 30% ( your income tax bracket) over a twelve month period. So a mortgage is a big responsibility. There are new rules so take the time to do it right.
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