3 Questions To Ask When Getting Your First Mortgage

Posted on: 23 February 2016

Stepping into home ownership can be one of the most exciting times in your life. It can also be one of the most confusing. With so many different loan products out there, it can be difficult to choose the right one for your needs. If you are tired of trying to decipher it all and are looking for ways to overcome your confusion, try asking the different lenders some of the following questions. In doing so, you should be able to find one that is going to work the best for your needs.

What type of loan options are available?

One of the first things to discuss is what type of loan options you qualify for. A fixed-rate mortgage is one where you pay the same amount of money each month. Your payments don't go up and neither does your interest. You don't have to worry about guessing how much you are going to pay the mortgage company next month because you will already know what it is. Variable-rate loans are ones where your interest rate can go up or down. One month you might have a payment of $500 and the next month it might be $800 because the interest rate changed. This makes it hard to budget for your mortgage payment.

How much down is required to secure the loan?

Depending on what lender you go with, the amount of money you need down is going to vary. One lender might require nothing down, while another might require 10%. Part of this revolves around your credit score and the other part of it revolves around the specific type of loan you are qualified for. You need to make sure you know what you need down to be successful at saving money ahead of time.

What all documentation do you need to apply for a mortgage?

Mortgage companies are going to need an assortment of information from you. From pay stubs to bank statements, references, proof of residency and so on, you will need to give them as much information as possible to prove you can afford the loan and are credit worthy. The mortgage officer will let you know what all you need to bring with you as well as if there is anything else needed to secure your loan.

By asking the questions above, you can better prepare yourself for the whole mortgage process and make sure you get the loan terms that work for your needs. For more information, contact a company like Commonfund Mortgage Corp.