What to Ask When Considering a Mortgage on Your Home

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When buying a home, considering home loan or mortgage is a common practice. When you wish to purchase a place, ensure that you know the answers to some important questions about the mortgage to make a smart choice.

Here are FAQ’s and some tips in response from AltiusMortgage.com on mortgage loans in Utah.

What is the interest rate on the mortgage?

A home loan or mortgage is one of the important things we apply for during our lives, and the interest rate is what determines how much customers need to pay every month. Be sure you clarify the percentage of interest and whether it is a fixed or floating interest mortgage beforehand.

What are discount and origination points payable?

When considering a mortgage, buyers need to consider discount points and origination points. The discount points determine the interest rate and are prepaid as well as tax deductible. Origination points refer to the lender fees which are charged and will cover the costs of the loan origination.

What are the closing costs in the loan?

For many people this is an important question, you can close the loan at one go or in increments but be sure you check with the lender regarding the closing costs. Within days of receiving a loan, application lender have to provide written estimate of these costs according to the law.

Is a prepayment penalty applicable?

Find out if there are penalty specifics, some lenders charge a penalty on prepaying a mortgage, others when refinancing of the loan is done or if principle balance is reduced beyond a certain percentage. Check the particulars clearly with your lender to avoid unpleasant surprises.

What is the down payment required on the loan?

The down payment on a loan is an important factor to consider. For some loans, higher down payments may be applicable but this may also mean lowered interest rates as well as better loan terms. Ensure you know the down payment applicable beforehand.

All you need is enough knowledge when applying for a mortgage, to be sure that you get the best deal. Hopefully these tips equip you to get just that.