Will it Cost Extra to Pay Early?

That's not a question you'd expect to hear yes to...but you might.  It's time to bend your lender's ear!

Does the idea of talking to a lender about borrowing money to buy a home intimidate you?  Having a list of questions can help.  Even if you are not sure what some of these questions mean,  your lender will.  It can open up a conversation about important aspects of your home loan that you may not have thought of, or may not be aware of. What you are trying to do is get the best loan for YOU and the type of home you plan to purchase.  These days there are many different types of loans and they each have different features, benefits and downsides.  Your potential lender should be excited to talk about these things and be open to discussing different scenarios.  They will be asking lots of questions of you and so it's a good idea to have some of your own.  Here are some good ones:


1. What are the most popular mortgage loans you make? Why?


2. Which type of mortgage plan do you think would best for us? Why?


3. Are your rates, terms, fees, and closing costs negotiable?


4. Will I have to buy private mortgage insurance? If so how much will it cost and how long will it be required?

NOTE: Private mortgage insurance is usually required if you make less than a 20-percent down payment.


5. Who will service the loan? Your bank or another company?


6. What escrow requirements do you have?


7. How long is your loan lock-in period (the time that the quoted interest rate will be honored)? Will I be able to obtain a lower rate if they drop during this period?


8. How long will the loan approval process take?


9. How long will it take to close the loan?


10. Are there any charges or penalties for prepaying the loan?


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