Boca Raton is a beautiful place to live. With nearly two hundred thousand people, a beautiful coastline, and unbeatable weather, if you don’t already live there, you should. Either way, you may be thinking about getting mortgage, refinance, or home equity loan. There are several questions you might want to ask potential lenders before you do so, though.
How do I get the best interest rate? Finding the best rate is important when finding a home loan. The interest rate has a direct affect on your monthly payment as well as the length of your loan. If you can find a lower interest rate, it can make a big difference in the monthly payments as well as the overall cost of your home.
Should the interest rate remain the same or change? An adjustable rate mortgage can sometimes help you to get your new home or lower your payments, but if your interest rate changes, so do your payments. You need to decide if you require a stable monthly payment or you can adjust when the loan does. If you do choose an adjustable rate, find out how often and by how much the rate will change. This will determine how much your payments will change.
What are the total closing costs? Find out exactly what you will be charged for at closing. Ask ahead of time for a detailed list of all fees in writing. If any of these costs won’t be final until closing, ask for a current estimate and find out how much the final amount may be.
What fees must I pay before closing? There may be lender fees, such as application, credit report, appraisal, processing, and document preparation fees. Always ask if you can negotiate any of these fees. It’s important to know exactly what you are paying for, so ask about each fee in advance.
Will I be penalized if I pay off my loan early? Some lenders charge a penalty if you pay off your mortgage early. Ask if there is a prepayment penalty and how much it is. Ask if this applies if you decide to refinance.
Should I lock in the interest rate? Interest rates can vary from day to day. If you think that interest rates may rise before your loan is closed, you may want to lock in at the current interest rate. In some cases you have to pay an extra fee to do this, but you may be able to negotiate this fee or lock in without it.
Is there a guarantee for the Good Faith Estimate? Lenders must give you a written estimate of all fees for your loan called a good faith estimate. These fees often carry no guarantee, which can lead to nasty surprises at closing. Luckily, the market for mortgage, refinance, and home equity loans is competitive, and so some lenders will guarantee the GFE. If you can’t get your GFE guaranteed, ask which fees are subject to change so that you will be prepared.
What is a yield spread premium (YSP) fee? The YSP is a charge that some lenders pay to loan officers as their commission. This is usually included in the closing costs. This is yet another fee that may be negotiable. If your lender charges a YSP fee, ask how much it is and find out if it can be reduced.
How long will the entire process take? Taking out a mortgage, refinance, or a home equity loan is a big step that involves a lot of time and planning. Be aware of how long the process will take with your lender and prepare for how this affects your housing plans. Remember that unexpected delays might arise.
We want to help find the right mortgage, refinance or home equity loan for you. All you need to do to get started is fill out the form below. A lender will be contacting you soon to discuss your home financing needs.
